Sunday, 17 December 2017

MWC: less tech glitz, more economic debate

By Jason Sinclair, Dow Jones Newswires
Friday 20 February 09

Attendance at key trade show thought to be down by around 25%.

This year's Mobile World Congress won't be remembered for flashy presentations or spectacular and aggressive new product launches. Indeed, if the 2009 version is remembered at all, it will be for its subdued tone. Mobile operators, handset makers and software and content providers gathered here are all trying to figure out just how much the economic crisis is going to affect their business. Operators can rely on their solid cash generation to ride out the economic storm, but are getting squeezed out of many of the new service-based innovations, and tight regulation is hitting revenue. Handset makers face a contraction in global sales and shrinking margins, while network equipment suppliers are suffering as operators rein in capital expenditure. Attendance at this year's event, according to Nomura…

This year's Mobile World Congress won't be remembered for flashy presentations or spectacular and aggressive new product launches. Indeed, if the 2009 version is remembered at all, it will be for its subdued tone.

Mobile operators, handset makers and software and content providers gathered here are all trying to figure out just how much the economic crisis is going to affect their business.

Operators can rely on their solid cash generation to ride out the economic storm, but are getting squeezed out of many of the new service-based innovations, and tight regulation is hitting revenue. Handset makers face a contraction in global sales and shrinking margins, while network equipment suppliers are suffering as operators rein in capital expenditure.

Attendance at this year's event, according to Nomura, was down 25% compared with last year, with cab drivers and hoteliers grumbling about the loss of trade. Queues to catch a glimpse of the hottest new handsets, grab lunch or a drink, part and parcel of previous years, were noticeable by their absence, as were any truly game-changing hardware launches or major software innovations.

More like Davos
Several attendees here felt that the event, with its focus on economic and financial concerns over the usual razzmatazz, was more similar in mood to the recent World Economic Forum gathering in Davos, Switzerland, than an industry trade fair.

"We cannot afford the luxury of not making the telecommunications industry the main driver of economic recovery," said Telefonica SA Chairman Cesar Alierta in his opening remarks.

Carl-Henric Svanberg, chief executive of Ericsson, the world's largest network gear company, noted that his part of the industry is starting to feel the pinch."Last year, our infrastructure business was hardly impacted at all, but it would be unreasonable to think that that would be the case also throughout 2009," said

Svanberg's call for governments to use telecom-related infrastructure spending to stimulate investment in an attempt to restart economic growth looks hopeful, however.

Vodafone Group PLC Chief Executive Vittorio Colao, meanwhile, called for more industry cooperation and less government regulation, while stressing the need for the industry to work out how to make money from new mobile content and applications that are proliferating rapidly as phones get smarter and faster.

Capital expenditure plans for costly new networks are delayed, with the majority of operators focused on extending the life of existing third-generation mobile networks rather than splashing out on upgrades to ultra-fast next-generation solutions such as Long-Term Evolution, or LTE, which observers say could still be up to 10 years away from wide adoption.

To be sure, network traffic is on the increase because of the rise in data traffic spurred by the success of Apple Inc.'s iPhone, the industry trailblazer. Its popularity has pushed 3G - wireless data services such as Internet browsing, music and games downloads and location-based services - right into the mainstream, and companies right across the industry are trying to get a bigger slice of this growing market.

The implications of that growth, and the switch of focus to usability and service delivery for mobile users, formed the bedrock of the key announcements here.

The iPhone's touchscreen, so innovative when it was launched, has been widely replicated, but its user-friendly interface and the success of its App Store have been more of a challenge for rivals.

Focus on applications
Application stores, which let mobile users wirelessly download software from independent developers directly to their handsets, have been a key focus this week.

Most operators are rushing to create their own versions to add interactivity and personalization to the user experience, improving customer loyalty and providing operators with a new source of revenue.

Monday, Nokia Corp., the world's largest handset manufacturer, unveiled the launch of its version, called the Ovi Store. Microsoft Corp., meanwhile, unveiled its Windows Marketplace for Mobile.

Such developments, while blurring the distinctions between rival offerings, are set to give a further boost to the growth of wireless data.

To keep pace, the GSM Association, which represents the interests of the global mobile communications industry, this week called on governments and regulators in Europe to set aside for 3G networks 25% of the spectrum released by the move from analog to digital TV.

Open-source operating systems, which allow third-party companies to develop programs for mobile phones without paying royalties, are also shaking up the industry.

Vodafone and Taiwanese handset maker HTC Corp. Tuesday said they will launch a new mobile phone, dubbed the 'Magic,' that's powered by Google Inc.'s Android operating system.

Samsung Electronics Co. Ltd., Motorola Inc. and LG Electronics have also said they are developing phones that use Android.

But considering the flurry of excitement the advent of Android created last year, the dearth of device launches at this year's MWC - there was only one - merely added to the subdued tone.

Symbian, the world's most widely used mobile platform, and up to now controlled by Nokia, is also in the process of transformation to an open-source model through the not-for-profit Symbian Foundation, which Nokia set up with its industrial partners. The foundation is expected to launch in the first half of this year.

Microsoft, meanwhile, will launch a new version of its mobile software at the end of the year, but the Ovum consultancy said the new version lacks any real "wow" factor.

Analysts have long said that Windows Mobile, which runs on a wide range of phones from manufacturers including Samsung and HTC, needs a facelift to appeal to users beyond Microsoft's core business fans.

Windows Mobile 6.5 will feature a new look home screen, shaped as a honeycomb, to make it easier for users to find the applications they're looking for, but it won't ship until the end of the year.

The success of these ventures and how quickly global economic conditions start to improve are key for an industry at a crossroads, and will dictate whether attendance at next year's event is up, or falls further.

(Kathy Sandler and Jethro Mullen contributed to this report.)

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