This year’s CTIA was certainly more upbeat than 2003 even though it lacked the spark of the 3GSM conference in February. A positive short-term outlook for the wireless equipment market that expects to see single-digit growth in 2004, and a global handset market that expects to see 5 and 7 percent increases in handset sales in 2004 and 2005, support this.
Update on Devices
Device capabilities are expanding commensurately, and we don’t foresee terminal support for given services and features as a barrier to adoption. The exception to this is push-to-talk/message functionality, where the multi-vendor brouhaha over standards and the need for client software to be embedded at manufacture will have a delaying effect on both interoperability and the broad availability of P2T/PoC—capable handsets. The paucity of EDGE-capable handsets—evidence of delayed development cycles in the terminal silicon community—was also apparent.
The profusion of 1 to 1.3 megapixel cameraphones launched the most headlines. However, we view the cameraphone revolution, and much of the more visible hardware integration momentum, as a fait accompli. More attention must be paid to client-resident middleware that enables applications extensibility as well as cost-effective device customization. Otherwise, many of the growing number of value-added handset features never get used. Openwave’s Phone v7 platform, Motorola’s MotoJUIX, and Esmertec’s JCAP platform are standout examples of the logical approach to turning standalone hardware and software applications into more meaningful, revenue-generating service enablers. It is here that the wireless data revenue rubber meets the road.
Symbian continues to expand its vendor portfolio, with LG and Panasonic putatively demonstrating support. NTT DoCoMo’s Symbian-licensed suppliers Fujitsu, Sanyo, Mitsubishi, and Panasonic will also drive the platform on DoCoMo’s FOMA WCDMA service. A revamped one-hand-operated UIQ will exacerbate the awkward new ownership structure by competing directly with Nokia’s own Series 60 U/I.
Microsoft has reconstituted the CE group with the PocketPC Phone Edition and Smartphone groups, which should enable more continuity in Microsoft’s approach to the market, and the implementation of the .NET Compact Framework. New MPx devices from Motorola were innovative form factors, if somewhat rudimentary prototypes.
Qualcomm’s Mobile FLO (Forward Link Optimized) content delivery solution is timed to coincide with Verizon Wireless’ nationwide 1x EV-DO deployment, and has the potential to enable this 3G technology beyond the enterprise to mass-market featurephones.
Chinese, Taiwanese, Korean handset vendors and OEMs continue to increase their presence at the major shows. Haier, Telson, Sewon, Bird, TCL, exhibited on their own and in major handset vendors’ booths in various guises. The increasing presence of these vendors at 3GSM and CTIA shows, as well as CES, is a harbinger of the handset landscape in 2006.
The Falcon platform that runs the next-generation of Motorola’s iDEN handsets was well represented. The new portfolio is well represented across segments ranging from Mil-Spec ruggedized clams and monoliths, to the flagship i730, and the impressively elegant forthcoming i830 defies the blue-collar ethos of its brethren.
Value-Added Service Platform Update
Service providers and vendors were particularly positive towards the growth of messaging services, push-to-talk, and demand for content downloads such as polyphonic ring tones and ring back tones.
Vendors like Ericsson are positioning their push-to-talk solutions more broadly to offer content and voice messaging capabilities—in line with our report published in August 2003 (Next Generation Push-to-Connect Provides Simple User Interface for Instant Communication). On the other hand, NG P2T vendors are partnering with mobile conference equipment vendors such as Polycom to enable PTT users to switch half-duplex calls into full-duplex conference calls. Kodiak demonstrated this feature.
It was evident from the CTIA show that the content market in the US is still in its infancy and supported largely by service providers with walled-garden solutions that are similar to those being offered by operators in Europe. As this market evolves, it will be necessary to open the garden to third parties. This will create opportunities for vendors that can provide solutions to efficiently support the management, aggregation, and delivery of content and services and the settlement processes with third parties.
On the MMSC vendor front, two noticeable trends are evolving: LogicaCMG continues to emphasize the importance of high throughput of its MMSC. Comverse and 724 are proposing dedicated MMS alert system to meet burst and time sensitive MMS alert traffic, which probably requires carriers to make changes to their existing MMS infrastructure configurations. However, A2P MMS traffic is expected to take off in Europe and Asia area first.
Color-ring-back-tone (CRBT) was another hot topic at this year’s show. This handset agnostic, network-based solution has gained a lot of traction with U.S. carriers after creating a successful story in Asia. Most of the interest seems towards the deployment of IN based solution because of its relatively low-cost structure and time-to-market advantage. We expect in 6 to 12 months timeframe, this service will be offered in U.S. market. Strangely enough, although CRBT is a handset agnostic technology, and can be deployed even in fixed line networks, we have not heard of any deployment from a fixed carrier. We believe CRBT is an opportunity in both wireless and fixed network environments.
Network Infrastructure Update
Verizon announced more contracts for its nationwide rollout of a 1xEV DO network. This has raised the bar for network speeds. Sprint has opted for 1xEV DV, which is currently available in a Release C version from vendors like Samsung and Nokia. Its incumbent vendors, namely Nortel and Lucent, and Qualcomm are not supporting Release C, but rather are opting for Release D, which will be commercially available in the 2006 timeframe.
Cingular did not provide any capital expenditure guidelines should its acquisition of AT&T Wireless be successful. We expect their expenditures will decline dramatically over a 24-month period as it consolidates the two networks. The availability of radio spectrum from AT&T Wireless and Verizon’s 1xEV DO launch increases the likelihood for Cingular to implement WCDMA sooner rather than later. However, it is still unclear how network consolidation activities will impact this implementation.
There was some discussion at CTIA about technology alternatives such as 802.20 and WiMAX that might be used by operators to challenge 1xEV DO. There was a general hum throughout the conference regarding WiMAX and whether it completes with or complements 3G. We believe WiMAX is complementary to 3G, and service providers that need the extra performance to compete might consider its use in hotspots so long as the devices are readily available and priced appropriately.
Nextel discussed its trials with Flarion Technologies stating that it needed to confirm that Flarion’s flash-OFDM is sufficiently scalable. Nortel’s Pascal Debon came out in strong favor of OFDM as a solution beyond 3G.
The Yankee Group originally published this article on 21 April 2004.