Friday, March 11, 2005

The benefit of GSM-why europeans get Smartphones first

Recently, a new Licencee called ITM Technology entered the Palm OS market with a-well-rebranded version of GSPDA's XPLORE M68. Palminfocenter commentators immediately began to bicker about why europeans get the stuff first-most thought that europeans have more cash or are more willing to spend it on mobile phones.
While the latter may definitely be true(180Million€ for ringtones) for Germans, this is not really valid for mobile phones. Rather, one should blame the provider architecture of the US. Europe is an all-GSM continent, the continent of the US has multiple different systems. And not systems with a different transfer frequency-entirely different aspects of bandwith management, network structure, communication protocols, transmitter hardware etc. There is Mobtex(yes, I know that it is for pagers), GSM, CDMA, ... .
Now think about smartphone sales. Smartphones sell best when subsidized by a carrier. Without carrier subsidies, a phone may sell well-but the mainstream goes for the carrier's stuff! And most smartphones try to target the mainstream!
So here we are at the neuralgic point of the US market. If you optimize for a non-GSM network, you limit your choice of carriers-sometimes even just to one or two. And what happens if this carrier says nay and refuses to subside the machine-lots of R&D cash wasted, and you have a few thousand units to scrap! However, when targeting GSM you literally have hundreds of carriers-and there is a high chance that a few of them will take your device! Less risk involved for the licencee->business plan looks better->share prices raise - you know what I want to say, don't you?
Concludingly, I feel that the US is a less attractive market for a smartphone manufacturer. So, move to europe or get a GSM version imported. What do you beleive?


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