Google has a led a group of 34 companies, which includes T-Mobile, HTC, Qualcomm and Motorola, to develop a fully open platform for mobile devices called Android. Each of these companies has a stake in providing what this platform promises to bring: an open platform that will provide better interfaces, less restrictive access and better mobile experiences to end users, as well as an easier, richer and more differentiable platform for developers. The end goal for most usage on the mobile Internet is to drive traffic, sell services, advertise and sell hardware.

It is expected that a handset for this service will be rolled out in the second half of 2008. HTC has committed to this time frame. Operators are likely to offer a couple of handsets with this new platform. The platform will need to deliver on its promise of better user experience and access to content. How the applications tie to the communication capability of the phone will also be a key to success.

Developers will be taking a risk at the beginning using this platform, but some of that should be mitigated by easier development capabilities and the support of large companies such as Google to get the ball rolling. If the platform can deliver on its promise in a tangible way so that user interactions with the phone are greatly enhanced, then the platform should grow and has a chance to become an industry standard. If it cannot differentiate, then it is likely to be one of a handful of OSs in the market.

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It has been six years since the first two UMTS licenses were awarded to France Telecom's Orange and Vivendi's SFR. One year after that the terms were redesigned, and only one more application was attracted - from Bouygues Telecom, which was awarded the third license in September 2002. Now, the French regulator ARCEP has rejected the bid by Iliad's Free Mobile to get the last remaining UMTS license, leaving the launch of a fourth 3G network out of the question for an indefinite time.

The tender for the last UMTS license ran to the end of July 2007 and only attracted one bidder, Iliad's Free Mobile. Iliad already has a presence on the Internet, in telephony and in the TV market in France, under the brand Free, second only to Orange. The idea of pursuing a mobile 3G license was to develop its own mobile offering and probably make use of the innovation Free is known for to launch converged fixed and mobile services, as seen by many players in Europe.

The main reason behind the push-back by ARCEP is that Free Mobile's application failed to commit to a payment requested by ARCEP: a one-off fee of €619 million, to be supplemented by a tax worth 1% of the annual UMTS service revenue. This €619 million fixed fee, payable at the time of award, seems to be where Free Mobile wanted to negotiate.

Two things strike me in the French mobile market so far:

• The lack of enthusiasm for the 3G licenses then and now. This might be due to the overall tepid success of 3G in the region.
• The sheer enthusiasm with which mobile virtual network operators (MVNOs) have been launching over the past three years, though not all have been successful. They are all delivering GSM-GPRS-EDGE services and have not yet tried to get involved in typical 3G offerings.

The French market is full of contradictions, and there is no simple answer to them. On the one hand, mobile players, French and foreign alike, lack interest in the French 3G market. On the other hand, retailers, media and new players (for example, Auchan, Carrefour, M6 and Virgin) are keen to participate in the market via an MVNO. In terms of local competition, the mobile market has been under the thumb of three network operators that, at some point, were found guilty of price-fixing agreements. The fixed broadband market is very competitive, with many active players all battling for the home market for Internet, TV and unlimited telephony. The French mobile market still has more potential than its neighbors - penetration rates are the lowest in Western Europe, at 86% in 2Q07 (see "Market Share: Mobile Connections, Western Europe, 2Q07"). In addition, its data revenue share - estimated at 15.6% at the end of 2006 - is one of the lowest in the region (see "Forecast: Mobile Connections by Technology, Western Europe, 2002-2011").

With so many conflicting positions and contradictions, the one sure fact is that the consumer will be losing out.

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Nokia will acquire Enpocket to speed up its emergence as a worldwide mobile advertising enabler. Its goal is to bring the marketplace of carriers and publishers together with brands. This is a bold move, but the marketplace is still fragmented among a number of Internet-based players, including Google, Microsoft, AOL, the carriers themselves, and a number of new, smaller players. Nokia certainly brings trust to many operators, and the company is likely to focus on operator portals as Enpocket has done with Sprint. The advertising piece from Nokia represents less of a conflict with carriers than other services Nokia has brought out, such as games, VoIP clients for some models of Wi-Fi-enabled phones, ring tones and videos, as the wireless carriers will need to partner to effectively run ads on their portals. Nokia's strength will be its familiarity and reputation in the mobile space, which it will pit against the scale and momentum of some of the leading Internet portals looking at a lateral entry into the mobile space.

Like Apple, Nokia seeks to change the balance of power between carriers and manufacturers, under which carriers have traditionally been calling the shots on what features and functions to enable on mobile devices. Although carriers still represent the manufacturers' most important customers, by diversifying their customer base to include content providers and advertisers, Nokia with Enpocket can now try to establish a more balanced partnership and exert more influence over the design of handset experiences that leverage their core competency in user-centric engineering. Carriers, fearing the incursion of Internet giants into their space, may well decide to embrace these newly empowered manufacturers as allies. But doing so will still mean accepting something less than total control of the handset platform for content and advertising.

Perhaps most importantly, Nokia represents the strongest claim that the mobile channel is not merely a third-screen destination for Internet ads. Nokia has no experience or claims on PC-based content or advertising, nor on next-generation TV platforms, so it will try to develop the handset as a unique, premium-priced medium with its own deep capabilities. This positioning, if successful, may be the carriers' best hope of securing a favored position in the emerging value chain of mobile ad-supported content.

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On 3 May 2007 in New Delhi, India, Nokia renewed its commitment to emerging markets with the launch of seven new mobile phones, including a thin device originally code-named Barracuda:

• Nokia 1200 and 1208. These are basic phones with features like call tracking and multiple phone books. They are aimed at first-time mobile users, especially those who share a phone.

• Nokia 1650 and 2660. These two phones are targeted at the "style followers" segment.

• Nokia 2505. This is a CDMA clamshell destined for markets in Asia/Pacific, the Middle East, Africa, China and Latin America.

• Nokia 2760. This clamshell design has a camera and Bluetooth.

• Nokia 2630. The company released a few details on this device, code-named Barracuda, in 2006, and it has been much talked about since then. It is the company's thinnest handset, at 9.9 mm, and features a camera, Bluetooth and FM radio.


Full details of the new phones are given on Nokia's Web site.

As we anticipated, the Nokia 2630 is not an ultralow-cost phone, though some observers speculated it would mark Nokia's entry to that market segment. Motorola's ultralow-cost Motofone is aimed at first-time users in rural areas of developing markets such as India, but has not sold as well as expected. Its thin and stylish design is perceived as too delicate for rural environments, and problems with the screen and usability of the phone have not helped.

The Nokia 2630 will be available from the third quarter of 2007 for 85 euros before tax and subsidies. It therefore addresses a different consumer segment from that targeted by the Motofone. It will attract users replacing their first handset, and as more and more people in emerging markets trade up to better phones, Nokia has a potential winner. We expect the 2630 to do well in mature markets, too. Despite the huge push on 3G services, there's still a big market for basic voice phones.

These seven new products - especially the 2630 - raise the bar for phone makers like Sony Ericsson and Samsung, which have started to look at emerging markets and have stated an interest in selling more phones to people replacing their initial handset in those markets. Our research has highlighted the strength of Nokia's brand in emerging markets and its winning distribution strategy (see "Vendor Rating Update: Nokia"). A stronger portfolio that adds style to the equation will make it even harder for Nokia's competitors to measure up.

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We're seeing reports on the Web and from blogs that AppForge has stopped trading.

For those unfamiliar with AppForge, it was a mobile development tool company with a neat product called Crossfire, which allowed you to write an application using Visual Studio and Microsoft Compact .NET, and then run it on non-Microsoft platforms. This allowed people to use their existing Microsoft mobile development skills but target Palm, Symbian and even BlackBerry (up to a point). It's hard to know precisely how many mobile devices using Crossfire are out there, but we wouldn't be surprised if it was a couple of million, with some individual application deployments of several tens of thousands. There are going to be some disappointed mobile developers and users in the world today.

We think the technology is still promising, even though AppForge's licensing model was a bit of a challenge, so we hope someone picks up the pieces. Possible buyers include multichannel application gateway vendors or maybe other mobile tool companies. Nokia, RIM and Palm ought to consider how they can help Crossfire survive, because it helped them a lot. It allowed organizations to use their platforms even if they didn't like their development tools. Also, Crossfire was one of the few cross-platform mobile alternatives to J2ME. If Crossfire disappears, people will have to make some difficult decisions, which would likely benefit Microsoft because the path of least resistance for current developers is to move to Windows Mobile.

If you're an AppForge customer, don't panic (yet). Watch the news, and hope that someone acquires the technology. But in the meantime, develop a contingency plan for what you'll do if AppForge ceases to be viable, and be prepared to activate that plan some time in the next three months.

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On Monday at CTIA, Sprint Nextel announced the launch of its latest mobile music device, as well as new pricing for its full-track music downloads.

On the device side, Sprint Nextel has teamed up with Samsung and upped the ante with the Upstage. As the name implies, this device is meant to upstage the competition on numerous fronts, including design, usability and pricing. The device is a bar phone with a twist - it has two fronts. One side is primarily for phone and text messaging functionality, with the standard phone keypad, while the backside caters to music and multimedia with dedicated keys and a larger display. The device boasts 16 hours of music playback and 6.3 hours of voice thanks to a device wallet that also serves as a backup battery.

The device launch comes at an opportune time - as handset vendors in North America strive to deliver the next iconic mobile device. The device capitalizes on the popularity of thinner devices, but also brings form-factor novelty (dual-sided) and expanded functionality (dedicated multimedia side/keys) to the table. Moreover, the device will launch in April (well before the much-anticipated Apple iPhone launch) - which could potentially take some wind out of Apple's sails/sales. Launching at $149, it will be a very competitive price point. Price erosion is also expected to bring the price down to an even more consumer-friendly price toward the end of the year.

To complement the launch, Sprint Nextel is also introducing $0.99 full-track, dual-delivery music downloads - replacing the previous $2.49 pricing. Sprint's announcement to provide $0.99 downloads is also expected to drive additional competition to the industry. This will bring the pricing in line with the already popular iTunes service and will be an improvement over its previous $2.49/track service and competitors' music offerings.

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Sony Ericsson and Sagem Communication announced on 26 March that they have signed licensing and original design manufacturing (ODM) agreements for entry-level GSM, GPRS and EDGE mobile phones. As part of the agreements, Sagem will license certain hardware and software platform technologies to Sony Ericsson and supply Sony Ericsson-branded mobile phones from its overseas manufacturing plants. In addition, the two companies will conduct joint development activities.

After much speculation about the future of Sagem, including a potential acquisition by Motorola, this is one of the least expected outcomes. Most vendors considering outsourcing the design and manufacturing of mobile phones would look at Taiwanese, Chinese or South Korean ODM firms, and there's no shortage of those (see "Dataquest Insight: Outlook for Asia/Pacific's Mobile Device ODMs in 2007").

But as key ODM companies in Southeast Asia are busy closing deals to supply network operators with phones, Sony Ericsson's choice makes a great deal of sense. First of all, Sony Ericsson is not trying to go for ultralow cost, which is the reason for many agreements with "typical" ODM firms. I think Sony Ericsson's brand is enough to guarantee a healthy markup on the phones manufactured by Sagem. Second, Sagem has a great track record in entry-level phones, as the success of devices in the Vodafone Simply portfolio proves. Third, Sony Ericsson needs to maintain the high quality that characterizes its phones, and some ODM companies are not renowned for their quality.

Sony Ericsson has been smart to look for a reliable partner to help it tackle a market that is not its core competence. The joint development activities with Sagem should mean that the new devices will not look out of place in its portfolio and damage its precious brand. Sagem might have found a way to give its business a steady injection of cash, relieving parent company Safran of this duty. It will be interesting to see if this is where Sagem is heading altogether.

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BenQ announced its mobile handset unit BenQ Mobile's annual shipment in 2006 only reached 1.7 million. The shipment had significant decline in the second half of 2006. Mobile phones accounted for 4% of total revenues in the fourth quarter, compared with 42% a year earlier (see "Market Share: Mobile Devices by Region, 4Q06 and 2006"). Besides that, the possible insider trading by executives is under investigation, which jeopardizes BenQ's potential as a business partner. Among all the business units of BenQ, the mobile handset unit kept losing revenues and hence was the trigger for the withdrawal of all further investment in BenQ Mobile.

Under such constraint and pressure, BenQ Mobile restructured its organization to cut costs. It closed down the China R&D center and put all its resources back into the Shanghai and Taiwan teams. The BenQ-Siemens inventory can hopefully be cleared in the first half of 2007, spelling an end to the BenQ-Siemens brand. BenQ Mobile plans to release 12 new models under its own brand, BenQ, in 2007. As Gartner anticipated, BenQ Mobile has decided to move back to an ODM business (see "Report Highlight for Dataquest Insight: Outlook for Asia/Pacific's Mobile Device ODMs in 2007").

The final goal for BenQ Mobile is to increase its handset shipments and revenues in the short term. BenQ's own branded products will target China, where it receives better brand recognition. BenQ will also aggressively seek out operator partnerships to grow its ODM business. This move by BenQ - to depend on its ODM business to improve its revenues quickly - will be a real challenge. In the past two years, there have been several ODMs building up their own positions in the market, while BenQ Mobile focused on its own brand business. For BenQ to regain presence in the ODM market, it needs to reposition itself to enhance its product portfolio and rebuild some of the bridges that it might have burned when departing from the ODM business.

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After Nokia introduced its free navigation service smart2go a few weeks ago, Navigon, a European navigation software provider, announced at CeBIT that users can download the beta version of MobileNavigator 6 Java Edition for free from its Web page. The software package can be downloaded to the PC and then transferred via Bluetooth or USB to the mobile phone. It is an off-board solution that includes a European map and is available in 18 different languages. The software for the maps and the navigation are both free, while with smart2go users have to pay for the turn-by-turn voice navigation. Besides maps, the MobileNavigator 6 also provides points of interest (POIs), including restaurants, bars and tourist sights. The software is compatible with a variety of Nokia and Sony Ericsson phones.

The main difference between the two products is that the MobileNavigator is an off-board solution while Smart2go is a hybrid system that enables users to save maps and routes on the device. The advantages and drawbacks of either one are obvious. The on-board solution requires a certain amount of storage capacity, but costs can be minimized because data must be downloaded only once, making the connection to a server unnecessary. Navigon's solution is most suitable for users who have signed up for a data flat rate with their operator. However, in light of recent announcements by mobile MVNO Simyo, to offer data services for 0.24 EUR/MB, this could be an option for cost-conscious users as well.

The mobile devices market with integrated GPS in Western Europe has been far behind other mature markets (see "Forecast: GPS in Mobile Devices, Worldwide, 2004-2010") - the main reason being the lack of commitment from operators to launch location-based services. However, we see now that other players have the potential to push this type of service and bring it to a wider audience. Nokia has bigger plans in this area with regard to its gate5 acquisition and having GPS as a standard feature in all S60 devices going forward. With different services and pricing offerings to accommodate different users' needs, we think that the Western European market is definitely ready for more services like these. The question is when the European operators will realize that.

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On 31 January, Sony Ericsson announced plans to make mobile phones in India through manufacturing agreements with Flextronics and Foxconn, its global outsourcing partners. Initially, the focus will be on basic color-screen phones and midlevel music-enabled phones for local distribution. In addition to competitive pricing, these phones will offer features specific to the Indian market, such as local content and customized keypads (see "Emerging Markets: Ultra-Low-Cost Mobile Handsets").

In 3Q06, Sony Ericsson held the No. 3 position in the GSM market in India, after Nokia and Motorola (see "Market Share: Mobile Terminals by Region, 3Q06"), but slipped to No. 4 in the overall Indian market because it lacked devices that support CDMA technology (see "Market Share: Mobile Terminals by Technology, 3Q06"). To improve its overall market position, it needs to ensure its GSM portfolio can cater to as wide an audience as possible, which means adding to its midlevel and high-end offerings.

As India prepares to move away from CDMA to GSM, Sony Ericsson has a great opportunity to grow market share. Sony Ericsson's brand has become synonymous with quality and usability, and it's paramount that the Japanese-Swedish joint venture maintain its high standards, even when moving into the lower end of the market.

After Sony Ericsson delivered strong sales in a couple of quarters and consolidated its position as the No. 4 player in the world, company president Miles Flint talked of Sony Ericsson's aspiration to become No. 3. To do so, the company needs to widen its low-end portfolio (not necessarily with ultralow-cost phones) and build on the recent growth in sales of WCDMA phones. And it would make sense for Sony Ericsson not to limit this new offering to India but to work on a platform that could easily be leveraged in other emerging markets. Never say "no" to economies of scale!

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Björn Steiger Stiftung Services, a German company that specializes in emergency services, has introduced something special this Christmas for the German mobile market: the i-Kids phone featuring the so-called "LifeService Kids." This service is based on GPS technology that enables parents to locate their children anytime over Internet or WAP service. In addition, parents can determine a "safe zone" for their offspring and will be notified via SMS should the child leave this preselected area.

Björn Steiger Stiftung Services has exclusive rights to the device provided by Australian-based company mobiles2go throughout Germany. One of its most important security features is the "panic button." When this button is activated, the phone automatically dials the four predetermined numbers one after the other. If there is no answer, a connection will be established to an emergency service center, or - and this is the light version of the service - the four contacts will be informed via SMS.

The device is very basic and allows full cost control for the parent. The phone has no number keypad but comes with four buttons, which enables the child to speed-dial four numbers. Text messages can be received but not sent, let alone any other fun stuff such as music downloads and ring tones. We are not certain which age bracket this phone is geared to, yet the features and the design suggest that this handset is targeted at a very young user group: 5- to 7-year-olds. When customers order the device with a T-Mobile contract, the hardware is free. The service costs to bear are 30 euros (or 9.99 euros for the light version) per month, and voice service will go on top of that (5 cents per minute with a T-Mobile contract).

The i-Kids phone was presented to us at the 3GSM World Congress in Barcelona this year (see "Event Summary: 3GSM World Congress 2006"), and we predicted that one will see more services and handsets addressing either the very young or elderly user groups. Even though we think that the idea of constantly tracking someone is a bit disturbing, it supports the trend that operators must and will tap into new user groups in order to stay competitive. We have seen this service already in the Netherlands and, most recently, in the U.K. There are probably more to come as well as variations to the service, and we believe this is a good strategy for mobile operators to obtain new revenue streams. Björn Steiger Stiftung Services is one of several companies that have developed services specifically for elderly people to help in emergencies. Various companies offer GPS tracking devices for pets, too (which we can relate to more easily than tracking people).

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LG Electronics and fashion house Prada have announced an exclusive partnership to develop a mobile phone. The initial launch is planned for early 2007, with distribution starting in Europe (first in Italy, the United Kingdom, France and Germany), followed by Asian markets such as Hong Kong, Taiwan and Singapore. The Korean version of the phone is scheduled to launch in the second quarter of 2007. The focus will be on the software, user interface and music as well as design and packaging. The two companies promise that the phone will be "unique" and "sophisticated," with an advanced touch interface that "eliminates the conventional keypad." This sounds suspiciously similar to LG's KG800 Chocolate phone.

Partnerships between phone manufacturers and designers have become more common since the fashion side of devices has grown in importance. Siemens with Escada, and Motorola with Dolce & Gabbana are the most prominent examples.

Given LG's presence in the Italian market, thanks to its relationship with network operator 3 Italia, and the successful design of the Chocolate phone, we can see why Prada has teamed up with the Korean vendor. For LG, the partnership will help drive brand awareness. The phones might not grow market share, but this is not the point of this kind of partnership. The benefits are an increase in the perceived value of its brand and, perhaps more importantly for LG, high margins.

As competition in the mobile market gets tougher, phone manufacturers need to reinvent themselves and their products to stay in the game and, above all, maintain margins - something LG is desperately striving to achieve.

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The ITU Telecom World event is currently taking place in Hong Kong. This is the first time the event has congregated outside its traditional home of Geneva. This fact did not go unnoticed during the opening forum session, where key representatives of the Chinese Ministry of Information Industry, the government of Hong Kong, the ITU, the European Commission, APT and Cisco outlined their perspectives on "Living the Digital World."

Not too surprisingly, there were some common themes - the strongest being the need to address the digital divide, be that in the form of access to services or usage restrictions (see "Emerging Markets: Growth Prospects for Telecoms"). While the economic benefits to individual countries from reducing this divide were not discussed at length, this was a clear message and major consideration for governments and policymakers. However, the impact on areas such as education, healthcare and rural communities as a whole was highlighted as having larger implications for countries that drive this forward. There was also emphasis on the need to encourage research and development investment through partnerships - though, interestingly, the necessity to protect intellectual property was something drawn out by those on the panel involved in government or policymaking.

The role of mobile was emphasized as offering a means for delivering voice (see ""Emerging Markets: Ultra-Low Cost Mobile Handsets"); in addition, with future enhancements, mobile technology will help with the drive to broadband adoption. Here, standards and spectrum issues need to be addressed, something the EU Commissioner was particularly keen to promote.

The fact that the session was heavily influenced by the desire to reduce the digital divide is in itself not too surprising. However, the need to highlight the issues like protection of intellectual property rights and spectrum allocations was surprising.

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Four of the U.K.'s five mobile network owners - 3, Orange, Telefonica and Vodafone - have announced a technical trial of another mobile TV format, TDtv. The trial is scheduled to run to the end of 2006. Base stations, provided by IPWireless, have been deployed on 12 cell sites covering parts of Bristol. They will work with TDtv-enabled smartphones with a client application from MobiTV. This company will also help with the mobile content and getting the trial up and running.

This trial sounds like an extension of the one Orange and IPWireless announced back in February at 3GSM. While operators in Italy are coming to terms with relatively low numbers of subscribers to the DVB-H services they launched earlier this year (3 has reported about 150,000 subscribers so far), the U.K. does not seem to want to wait for DVB-H spectrum to become available. Virgin Mobile has launched a mobile TV service using BT Movio's DAB-IP solution, broadcaster BSkyB is trialing FLO technology in collaboration with Qualcomm's MediaFLO, and now we have TDtv.

TDtv operates in the universal unpaired 3G spectrum bands that are available across Europe and Asia at 1,900MHz and 2,010MHz. It allows 3G network operators to further utilize their existing spectrum and infrastructure to offer subscribers attractive mobile TV and multimedia packages without affecting other 3G voice and data services. We're sure this is a good thing for operators that have spent considerable sums on 3G licenses, especially if they're not using these bands at the moment. But is it good for mobile TV as a whole? Are all these technologies simply fragmenting the market, making it almost impossible to turn any one of them into a mass-market product?

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Innovations aren't necessarily useful or sensible. And I fear that Samsung's recent announcement of a mobile handset with a 10-megapixel camera fits into this category. Why would I want 10 megapixels on a phone? There are lots of reasons this is a bad idea:

1. You can get a perfectly good A4 print from 3 to 6 megapixels, and in real life, very few people print mobile photos bigger than postcard size.

2. More megapixels won't necessarily produce a better picture. Many other factors, including image processing algorithms and optics, contribute to the end result. And there are situations when having more megapixels actually makes things worse - for example, low-light images tend to be "noisier." So your pictures taken in a night club might actually be better on a lower-resolution phone.

3. Surveys suggest most images never make it off the phone and are viewed on the handset screen. What's the point of a 10-megapixel image on a QVGA screen with a resolution of under a 10th of a megapixel?

4. More megapixels mean more money if and when you do transmit the image and you're paying for cellular data by the megabyte.

The number of people who will be able to use 10 megapixels on a mobile handset is tiny, and there are technical and financial reasons why more megapixels are bad for most of us. It's time to stop the handset megapixel wars because consumers are the losers.

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BenQ has decided that the money it was pouring into the mobile handset division it created from the acquisition of Siemens' mobile phone business was never going to pay back (see "BenQ Will Struggle to Profit From Siemens' Mobile Phone Arm"). In the words of the BenQ board of directors, the losses had become "unsustainable," and they resolved to "discontinue capital injection." The combined BenQ-Siemens mobile handset division was hemorrhaging market share, dropping from around 4.5% of the global market in 4Q05 to 3.3% in 2Q06 (see "Market Share: Mobile Terminals by Technology, Worldwide, 2Q06"). Siemens must feel that the 300 million euros it paid to rid themselves of the ailing handset division in 2005 was money well spent.

BenQ may remain in the handset business using R&D and manufacturing assets from Asia, but it seems likely that BenQ-Siemens operations in Europe will now cease, because the company will probably file for bankruptcy. It's hard to imagine anyone wanting to buy it as a functioning business, given its tiny market share, poor track record and high cost base in Germany.

This event illustrates just how competitive the mobile phone business is, and how you need to have massive volumes to support the research and development necessary for a broad consumer product range. This is an industry where it's likely the top three (Nokia, Motorola and Samsung) will grow stronger. This isn't the end of consolidation; it's very probable we'll see further changes in the market landscape around the smaller Tier 2 and 3 manufacturers such as LG, Sharp, Sagem, Panasonic and NEC.

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Not even a year after introducing its Mobile ESPN service, the company has decided to close shop. The company faced a number of challenges, including limited distribution, limited handsets, low margins on voice calls and lack of compelling must-have content. Mobile ESPN did a very nice job of framing and providing a good user interface on the mobile phone for sports information, but it always lacked the "pull me in" characteristic of a successful service.

The company will continue to be on portal decks and have Java applications, as well as engage in additional licensing agreements. With hindsight, we believe this is the strategy it should have pursued in the first place, because the mobile phone business was not ESPN's core competency. The mobile phone service business is competitive, and it takes size and scale to meet the various customer needs and price points. Plus, the carrier wanted to be at the center of the end-user content experience. The next struggle will be how content providers get the best access to customers with or without the carrier, and that is already beginning to shape up, as the mobile virtual network operator (MVNO) model for these content providers seems to be dimming.

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This week, the future .mobi mess gets closer as the first .mobi domain names go on general sale. I've said it before in Gartner research notes, and I'll say it again, .mobi is a really bad idea. It will waste time and money and confuse consumers. We really do not need a new domain for mobile Web material. Some of the many reasons include:

1. There is no technical need for this. The latest mobile phones have Ajax-enabled browsers; they can already access "real" Web applications like Google, Flickr, and MySpace. The advance of mobile technology is fast eroding the technical differences between mobile and fixed Webs. Web 2.0 should be one Web, not several fragmented Webs. Search engines can easily work out what dialect of HTML a Web page uses, and if users want only a mobile variant, then they can filter their results accordingly. The solution to the problem doesn't require a new domain.
2. This will be a cybersquatter's paradise. Organizations will be forced to waste time and money registering new .mobi domain names just to protect their brand.
3. It will confuse consumers, not help them. They could now face multiple domain names for some sites - a .com and a .mobi.
4. I expect the guidelines for mobile usability that are mandated by .mobi will be weak and ineffectively enforced. The free market is the best way to decide mobile usability; people are smart enough to avoid sites that are difficult and select those that are easy. Worse still, who is the .mobi registrar to decide what is "usable" and what isn't? Most innovation happens because it changes the recognized paradigm. This could stifle innovation, not assist it.

If you're a commercial organization with a valuable brand: Congratulations - you've just been blackmailed. You can't afford not to register a .mobi domain name, because future handset browsers may default to .mobi if the user omits a suffix. So if you don't have a domain, your customers could end up in some cybersquatter's backyard. If you do register, you'll have to waste money maintaining content you don't need and following guidelines you probably don't care about.

Further reading, see "Why the .mobi Internet Domain Is Still a Bad Idea."

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The U.S. Federal Communications Commission's (FCC's) first advanced wireless service (AWS) auction closed on 18 September 2006 with 104 bidders offering a total of nearly $13.9 billion - net of bidding credits for small entities - for 1,087 licenses. The 35 unclaimed licenses will be made available in a future auction (see FCC News Release: Word | Acrobat).

The final top five bidders, based on net total high bids, were:

1. T-Mobile License with a $4.18 billion bid for 120 licenses
2. Verizon Wireless with a $2.8 billion bid for 13 licenses
3. SpectrumCo - the Sprint Nextel cable operator venture - with a $2.38 billion bid for 137 licenses
4. MetroPCS AWS with a $1.39 billion bid for 8 licenses
5. Cingular AWS with $1.33 billion in aggregate high bids for 48 licenses

By total number of provisionally winning bids, AWS Wireless led the bidding with 154 licenses, followed by SpectrumCo with 137 and T-Mobile with 120. The auction went 161 rounds, with no new bids in the final round, causing the FCC to close down the auction.

The FCC said that all winning bidders must make down payments on their licenses within 10 days of the release of the Wireless Telecommunications Bureau's Public Notice announcing the close of the auction. Winning bidders must also file their long-form applications (FCC Form 601) with the FCC within the same period.

The auction went pretty much as expected. The surprises were that the satellite TV groups dropped out very quickly and that SpectrumCo was aggressive in the bidding. This was the cable companies' effort to have some leverage with Sprint in their joint venture and to have a fallback plan if the venture does not materialize as planned. In terms of increased competition, MetroPCS is gaining a Northeast license, which will allow it to operate in Boston, New York and Philadelphia. Leap Wireless is obtaining licenses in Baltimore, Washington and Philadelphia. These companies offer all-you-can-use voice and Short Message Service in the $40 to $45 range. T-Mobile was the top bidder because it needs many licenses to offer UMTS/HSDPA service. Verizon beefed up its spectrum position in the Northeast, Southeast and Great Lakes Region, as expected. Cingular also used the opportunity to increase its spectrum position in Chicago and on the West Coast.

There were no new large market entrants resulting from this auction. The expectations of the satellite TV players to enter this market and gain inexpensive spectrum did not materialize, and expectations were most likely overinflated. There was also the additional cost of building and maintaining the network, which also impacted their decision to pull out of the auction. The 700MHz auction is just around the corner and may be bid on more aggressively, because the propagation characteristics are better at 700MHz than at 1,700MHz and 2,100MHz, and it will be the last big spectrum auction for the foreseeable future.

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Nokia opened one of its Flagship stores in New York on 9 September 2006. It is true that the company has Flagship stores around the world and in Chicago, but it now has a store in the international capital of the world, on what many consider the world's premium shopping street - Fifth Avenue. The store is stylish in Scandinavian chic and has three floors: the first for its typical consumer phones, the second for its Nseries phones, and the third for the ultra premium phones, which start at $4,800.

This is a brand-building move by Nokia to create a more upscale image with American customers who have only been able to see a few Nokia models via the carriers. Nokia has not been able to get wireless service providers to carry some of its more exclusive lines, so this is one the few options open to Nokia. Given the location of the store down the street from Tiffany's, it may not seem that outrageous for someone to pay $600 to $700 for an Nseries phone or $4,800 for an ultra high-end customized phone. The store employees will also be about to answer questions about Nokia phones and carrier applications, so it can be an education center and help bring customers closer to Nokia.

If you're ever on Fifth Avenue, it's worth a visit - and by the way, it's just down the street from the 24/7 Apple Store.

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