Pings & Packets - August 2, 2001

by Derek Kerton 

Marconi Stock Plummets, 

Trading Halted Palm Strikes OS Deals With Major Chip Players 

Toronto Indy Broadcast on WAP 

Hey. N-i-c-e P-a-n-t-s 

Bits and Bites

 ******************************************************** Marconi Stock Plummets, Trading Halted 

Marconi is a British-based wireless infrastructure provider, competing with the likes of Ericsson, Alcatel, and Nokia for contracts to install carrier-class telco facilities. Early in July, Marconi joined the ranks of victims of the economic downturn when they announced an earnings warning. 

Marconi stock took a 54% nosedive before trading was halted on July 4 after the company announced expected annual sales to drop 15% under last year, and operating profits down about 50%. In addition to the 8% of staff already laid off this year, an additional 8% (4000) of staff would soon joint their ranks. 

I include this story mainly as a lead in to the observation that the phone carriers and their suppliers all drank the same kool-aid. They all had somewhat flat projections for their sales of wireless services, but believed that wireless data would rescue the situation, and create the demand needed to justify the size of their businesses. 

What happened was a one-two punch combination. The left jab was the general economic downturn, and the right knockout uppercut was the lackluster consumer acceptance of the wireless Internet. The result of the lost bout is that most of the players in the wireless industry are re-structuring, laying off, and outsourcing in order to meet the more realistic timelines of slow consumer acceptance. ******************************************************** Palm Strikes OS Deals With Major Chip Players 

In the race for dominance among mobile OSes, Palm took a leap forward this week. They announced PalmOS license deals with Intel, Motorola, and Texas Instruments. 

Palm also announced that they would be separating their OS division into an independent company. Although there is no operational or financial motivation to do this, the reason for the move is still clear: Palm has had a hard time licensing the OS to other firms while at the same time operating as a competitor on the hardware level. Hardware firms shopping for an OS seldom want to buy it from their strongest competitor for fear that the OS group will play favorites with their brethren. The move to spin off the OS group will likely ease some of these concerns, and win the OS even greater acceptance. 

Palm itself was spun off from 3Com just last year. 

As I've discussed before, Palm, as a manufacturer, has had some serious inventory problems from which they have yet to fully recover (the last quarter lost ~$90 M on ~$165M in revenues), but the OS has proven to be a winner. You may hear the PocketPCs are now outselling Palm devices, but check the data carefully. Although significant, that data refers to total sales by revenues. It does not refer to units sold. The PocketPCs, costing up to five times the price of their Palm brethren, quickly rack up revenue. But the two most important metrics are i) market share in units, because this tells us who is winning the customers, ii) and profit, because in the end, that's what really matters. ******************************************************** Toronto Indy Broadcast on WAP 

Meanwhile, in the wilds of Canada, BellMobility created a short-lived event-based app to offer fans of the Indy car racing series. The app, available from their "What's New" and "Sports" categories, offered up-to-the-minute stats on race standings, and other background information about CART, the race organizer. 

According to a BellMobility spokesman, 15,000 people accessed the site from both on the racecourse, and from further afield. Applications like this are a great way to allow an audience to drill down into stats and details while in the stands of an event. Other ideas which could enhance the application include polls, tips, chat, messaging with event staff or participants, and even audience participation in judging for results. ******************************************************** Hey. N-i-c-e P-a-n-t-s - Dockers Targets Geeks 

I wrote almost a year ago of a Levi's garment that was designed to accommodate a cellphone. Well, the impetus has trickled down to the Dockers division. The San Francisco based clothier, has upped the ante with their so-called "Mobile Pant". The pants were designed for the mobile professional, who overfills pockets, purse, and belt with PDA, phone, pager, Blackberry, and such. Co-marketing the pants with Motorola and Compaq, Dockers will illustrate the benefits in real lifestyle situations. The seven-pocket wonders will surely be a hit among my crowd. Our belts have been overloaded 'til the point we look like techno-Rambos with buzzing bandoliers. I'm convinced I'm going to have a ring of tumors around my belt in ten years... at least that's my excuse for my growing waistline. http://www.mobileinfo.com/News_2001/Issue30/dockers_pants.htm  ******************************************************** Bits and Bites 

The gross value and overall percentage share of wireless ventures in Europe is rising. Some sources show that more than 7 percent of all ventures funded on the Continent and in the U.K. were wireless start-ups. The total value of the deals for those start-ups exceeded 19.2 million euros (US $16.96). 

OnStar, the GM-backed telematics firm recently reached the 1 Million subscriber March. Telematics is access to data in vehicles. The 1 Million users point is extremely significant, in part because it is a big milestone, but more importantly because it gives them the numbers they need to stage a march on Washington. They also recently signed a deal with ESPN for voice-based sports content.

Telematics is pushing the envelope with respect to our available attention span, and will play a big role in determining exactly what types of data are allowed in vehicles, and which user interfaces will be permitted.