A roadblock to Apple’s integrated business model

A good way to educate a kid (or a dog?) is behaviourism: when the kid behaves the way you want you give him a reward.

It’s exactly what seems to have happened recently with Apple’s project to embed programmable SIM cards in its next generation of devices. This project was for Europe which is always seen as a complex market from the other side of the atlantic ocean: many operators and different languages.

The idea was to simplify and by the way to by pass operators and make more moneyin the process. In other word, to climb up one step in the value chain and gobble up some (most?) margin from the operators.

Apple has apparently dropped the project under operators’ pressure (Orange, Vodafone, Telefonica) as they are the main sellers of the iPhone. And here comes the reward: iPad will soon be subsidized in the main EU5 markets! That’s a nice treat that will push higher tablet sales.

Orange UK & iPad teaser

Orange UK & iPad teaser


The future of telephone booth: Orange view

Orange / France Télécom is trying to give a new life it its telephone booth in an Internet world. Orange is currently testing a brand new category of booth for both calling and surfing in Paris.

Orange new booth in Paris

Orange new booth in Paris

Orange idea is to offer a big 17” touch screen for Internet surfing on top of classic voice usage:

the screen

the screen

The result is pretty impressive and robust: I haven’t spotted any big scratch as this kind of ‘device’ is put under huge strain in public places. I’ve found an interview on the orange website in French with English subtitles. > watch the Orange-innovation.tv video

Pretty interesting when your phone is out of battery or if you are roaming.

Audio quality: a differentiating basic

Here is a funny video which has been around for quite some time.

Due to the poor audio quality of mobile phones, this (not so) poor lady cannot make the difference between her husband and a stranger.

With the switch to data, many manufacturers neglect the audio quality of their devices, or as they are coming from the IT world they just don’t have the know-how to make voice sound good.

The move from Orange and other operators to offer HD voice is an interesting one. Voice is still their milk cow and good audio can really help them to differentiate.

Femtocells vs WiFi

Femtocells enable to expand the coverage in-door at the very place consumers use their device: their home. It enables to offload the radio access network. I mentioned in a previous post the Sure Signal service from Vodafone UK. I was not convinced by the benefits of this offer. According to The Register it isn’t an easy task to integrate these Femtocells into the global 3G network as many Vodafone UK customers are complaining.

> Article from The Register

Users who have paid £50 to buy the box aren’t satisfied by the service that should connect the unconnected.

In some countries it will be hard to sell the Femtocell concept. In France some associations have compelled operators to remove their stations from school roofs. Parents fears that their kids get high levels of radiation. I don’t think the “get a BTS in your living room” will be very appealing for these people.

Wifi is still a viable and inexpensive solutions especially for Fixed-Mobile players. Wifi has been so largely adopted that it doesn’t make people raise an eyebrow about radiation.

Orange has been pursuing this WiFi route with Unik for fixed mobile converge since 2005. It is still limited to voice services, but it seems a promising solution for data off-load too. Let’s keep an eye on it.

Unik Ad

Orange France Unik Ad

Cheap mobile devices in high demand

Last October the Alcatel OT-203 was sold in partnership with Carphone, The Sun newspaper and Orange in the UK.

Alcatel OT 203

Alcatel OT 203

The device is a very basic one for voice and text with very limited features:
no GPRS,no Java, a small colour 1.5 inch screen of 128×128.

According to Carphone Warehouse the Alcatel OT-203 was its fastest selling prepay handset ever. The £9.50 handset, with £10 free credit on Orange went on sale on 14th October and was available to customers who had collected four tokens printed in the newspaper.

Carphone sold 14,000 handsets in the opening two hours with queues forming outside some stores. 47,000 phones were sold over the three day promotion. Carphone said the handset is the fastest selling prepay device in its history.

The Sun Website

The Sun Website

Carphone CEO Andrew Harrison commented: ‘The speed at which this handset flew out of our stores was simply staggering. We saw an extra 100,000 customers over the three days the promotion ran, which just goes to prove that customers still love brilliant value handsets. We shouldn’t forget that for every customer who wants an iPhone, there is another customer looking for the best value on the high street.’

The smartphone segment, even if its growing fast, accounts roughly for 20% of the global device shipments. Even if the iPhone will be on sale at Tesco, most people need a mobile phone to … do phone calls and texts. Given the tough times most people are going through this kind of promotion is just smart and efficient in wooing new customers.

These days the handset market seems polarized between the two extremes: the high end devices and the entry level ones with no space in between.