Analysts: Users Installing Software A Threat To Operator Revenue

[David McNamee]

<div class='os_post_top_link'><a href='http://www.electricnews.net/frontpage/news-9413961.html' target='_blank'>http://www.electricnews.net/frontpage/news-9413961.html</a><br /><br /></div>This article specifically discusses Symbian 60, but applies equally to Windows Mobile devices. A consulting firm, Mako Analysis, has released a report highlighting the potential revenue risk of selling handsets that allow users to *gasp* install software themselves!<br /><br />"Savvy users can use devices running on Symbian's Series 60 operating system (OS) to completely bypass a range of services that are normally charged for by their mobile operator, the UK-based consultancy warned on Monday. While the threat is currently minimal, the loophole has the potential to cause major headaches for operators. "<br /><br />It seems that Mako Analysis is concerned that kids will install their very own MP3 players and then put music and ring tones on their phones without the kind - and expensive - intervention of the carrier. This is one of the most short-sighted things I've read in a while. While Mako Analysis was having this Chicken Little moment over potentially lost revenue from MP3 revenues, I wonder if they considered that users installing applications could actually <i>increase</i> revenue? Applications are increasingly taking advantage of the network connection to enrich the user experience. I'm writing a review of an application from Handmark that goes out and brings all sorts of data down to the phone. There are also games and media players that can take advantage of the network connection. All that data traffic will generate at least a couple of dollars for the carriers.<br /><br />Instead of wringing their hands about "loopholes," Mako Analysis ought to do something productive. Like telling carriers how they can create an environment friendly to users who want to move a lot of data over their networks, and how they can make money doing that.

[nirav28]

I swear..if mobile operators ever lock down phones to prevent customers from installing third party applications..I will swtch back to my 1999 version , monochromed , no frills nokia 5160!!!!

I have a nokia 3650. It might be a large phone in comparisions to other smart phones. But one of the key factors in why I still use it, is because the flexibility it provides for installing third party applications.

I have over dozen applications installed on it that perform all sorts of functions. From connecting to a bluetooth gps receiver, voice memo recorder. Uploading pics to a online gallery ,Remote Syncing (SyncML) etc.

This is the type of (ir)rationality that has prevented good technologies from prevailing. (cough*XBOX*cough)

P.S -- Oh did I mention VERIZON with their crappy BREW implementation!!!

[Ben]

I found this report frustrating, as well. The positioning of corporate giants and people with capital to shackle their customers, rob them of their dignity, and force them to pay for things that ought to be free reveals an abhorrent mentality that has run rampant in this industry. Corruption and greed inspire overly inconvenient "proprietary" technologies, phone locks, application locks, and general refusal to form joint ventures to get the very best technology in to the hands of the customer.

There is tremendous financial incentive to develop a new system that is not really a "better" or "more efficient" system, but just a proprietary one that lets the company squeeze a few more regular fees out of people. In the end, though, the observation of "short-sightedness" is exactly right. AOL taught us that you can refuse to make email accessible anywhere, force upgrades, and just generally make your customers miserable for a short term profit, but ultimately in this new information age, customers wise-up and competitors show up who are willing to give people what they actually want, which really has the greater financial incentive in the end.

There are companies in this world that I greatly admire, but the prevailing mentality is completely wrong. All of these technologies that put their shareholders and themselves above their customers don't seem to understand that in the end there are potentially a LOT more customers than there are investors, and that by giving the customers the very best deal possible, the shareholders, a fortiori, are better off as well. Look to Wal-mart, which is hated for other reasons, of course, but still puts its customers first (even above its employees, which is why people dislike them), but at least the shareholders have sure done well. People's main complaint about Wal-mart is that they can't compete!

If any of you out there reading this rant ever become chairmen of the board of directors, CEOs, etc. of these major international corporations, please remember to take care of those customers, and not go out of your way to make their lives difficult!

[DubWireless]

here's the full original comment by Mako Analysis:
High End Handsets – A Potential Threat (http://www.makoanalysis.com/news/news_item.asp?NewsID=18)

the operator's "walled garden" approach (i.e. only providing users on a kind of intranet) has failed before - sure they are scared of becoming 'dumb pipes' (i.e. simply providing the connectivity) but then they need to provide engaging, competitive and reasonably priced quality content and services not impose restrictions on handsets - we've also seen how much grief and bad feeling is generated when a Smartphone's capabilities are locked down by an operator (e.g. Orange/SPV and 3UK/MotoA920)

i use far more data services on my smartphone devices with third party apps than i would if my handset couldn't install any (i.e generating more revenue for the operator)...

do they really think that the operators didn't know the capabilities of the devices already - apparently they think they are "the first to publicly highlight this potential threat" :roll: have these "Mako Analysis" people been asleep for the last year or so 8O

there is a very good response to this Mako Analysis commentary on Mobitopia:
Are high end phones a threat to operators? (http://www.mobitopia.com/20040602.html#165715)

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[Phoenix]

Good grief. These ANALysts are a bunch of idiots.

Yeah, good luck doin' that and tickin' off every known customer around. That's never gonna happen. This would be like Microsoft saying we can no longer load our own programs. Uh, yeah, right.

These guys need to go back to doing what they do best - shovin' their thumbs up their...