Phones vs. Alternative Mobile Devices

Everyone raised their collective eyebrows when Nokia first came out with the 770 “Internet Tablet.” I also thought it was strange there was no phone (although it’s WiFi-enabled and can thus become a phone). Then there are smartphones with big displays and keyboards like the Treo or the “Crackberry.” But almost on cue people complain that these are not all around devices. You hear things like, “It’s great for email” or “It’s great for the web, but it sucks as a phone.”

Many people routinely carry two devices: a phone and a mobile email device. While the “email device” may also be a phone many people just use it for email.

What if the future isn’t the perfect “converged” mobile device but a mobile phone and another device for mobile web surfing? This piece on portable navigation devices, which are relatively expensive, ran in the NY Times (reg. req’d) last week:

With more than a dozen brands of portable global positioning system devices now sold in the United States for $300 to $1,500, manufacturers are competing by adding features like audio, video, photography and language guides rather than becoming tangled up in price wars.

Most of these enhancements are for entertainment, supplementing AM/FM radios and CD players and capitalizing on the portables’ existing features. For example, portables have sound systems so users can hear directions, have storage for extensive map data and have some means of downloading map updates via home computers. So it was not much of a leap to make devices that could also play downloaded audio.

What if devices like the ones described or the 770 or the Sony PSP become the dominant mode of mobile web access for people and so-called “feature phones” (traditional cellphones) remain the dominant mode of mobile voice communication? I’m suggesting two separate devices, hypothetically, with most mobile web surfing on the non-phone. People who can’t afford two just have a phone.

In all probability there will likely be a highly segmented mobile audience out there. Affordability will be the biggest driver of adoption, both of phones and data services. And each user experience will have its own ad model:

  • Radio like ads for DA-like services (Jingle, Infreeda, etc.)
  • Text ads for SMS uses (Miva/II8 118’s PPText)
  • Web-like sponsored links for mobile web pages
  • Sponsorships/CPM (spans categories)
  • Video ads for mobile video viewing (pre-roll, etc.)
  • PPCall spans a range of use cases

What will be the dominant user experience? It remains to be seen, but price will be a big driver.

If smartphone prices come down adoption will go up. That’s what’s somewhat “revolutionary” about the Motorola “Q.” It lists for $299 or $199 with a 2-year contract. That’s hundreds less than the Treo. But it’s only available from Verizon. Sprint is selling the Blackberry 7100 for the same $199 price.

In Europe, consumers are not held captive to the carriers and can go into the open marketplace and buy whatever phone they please. Here I can’t even see Sprint’s available inventory until I plug in my location on its website.

Here’s last week’s post citing a WSJ article on how carriers don’t want to work with Yahoo! and Google (Yahoo! has a big deal with handset maker Motorola) but rather with smaller companies “they can control.”

What consumers care about is the phone, the monthly cost and the quality of services they receive. But in the end, the carriers control none of these. That’s why Verizon is trying to do things like lock up the Q as an exclusive.

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5 Responses to “Phones vs. Alternative Mobile Devices”

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