Weird is the new normal in cellular

02 Mar 2006

If last week's news is any indication, cellular is at a very weird stage.

Here's a sample of just some of the items that landed last week:

Mobile operator Orange UK goes into the fixed-line business.

Qualcomm decides to make DVB-H chips to compete against its own FLO technology.

LG launches a white chocolate phone.

Vodafone writes down as much as $49 billion dollars of market capitalization.

OK, some of these are more important than others, but they all point to new and frankly disconcerting directions for the industry.

Taking them in reverse order: The goodwill write-off is stunning because of its size. It is a hangover from Vod's controversial acquisition of Mannesmann - the world's biggest ever takeover - five years ago.

But it is also about the world's largest cellco cleaning up its balance sheet to prepare for testing times ahead.

The company has trimmed its revenue growth forecast from 5%-6.5% in '07, compared with 6%-9% in '06. As goes Vodafone, so goes the mobile industry.

You may not have heard of the chocolate phone concept, but be assured it's a smash, at least in Korea.

The white chocolate phone is LG's follow-up to the dark chocolate model, which sold 300,000 units in its first three months. (Lee Ki Tae, president of Samsung Telecom, reportedly threw a tantrum - and a phone - over the fact that his team had allowed a chocolate phone gap to open up between them and LG.)

Lifestyle statement

The point is that phone marketing is becoming less about the utility of the handset, and more about the device as a lifestyle statement. The choc-phone keypad is scented lavender, for heaven's sake.

Now it's routine for tech companies to hedge their bets. But Convergence is still surprised by Qualcomm's planned move into the DVB-H space.

Qualcomm is not known for its love of non-Qualcomm technology, and DVB-H has pretty much zero Qualcomm IPR.

Meanwhile the San Diego vendor is investing $800 million on its MediaFLO business, building out a dedicated mobile TV network coast-to-coast across the US.

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