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September 26, 2005

Smartphone industry eyes VoIP, enterprise email

Enterprise e-mail and mobile VoIP were among key topics at yesterday's SmartPhone Summit in San Francisco.

By CBR Staff Writer

In her keynote speech, Marit Doving, executive VP of marketing for smartphone OS maker Symbian Ltd, said there is significant opportunity to develop applications that mobilize some 331 million business e-mail boxes currently online worldwide.

The mobile e-mail market remains huge and unsaturated, she said. To go to mass market, e-mail needs to be cheap, easy to set up and universally available.

Symbian is working with software developers and others to develop mobile e-mail in a meaningful way, Doving said. The aim is to develop mobile e-mail applications that are easy to set up and to open attachments, have high levels of security and are cost-effective.

What we really need is already in place, she said, referring to the Symbian OS being push e-mail ready and support all key e-mail vendors. So it’s about the solutions.

Currently, smartphones represent roughly 10% of the global mobile phone market. IDC predicts by 2008 that will grow to 15% with more than 130 million smartphones sold annually.

Mobile e-mail is expected to be a major driver of that growth. It’s safe to say that mobile e-mail has already shown it is a killer application, Doving said. It’s probably the biggest killer application [in smartphones] after voice.

Doving cited two examples of successful e-mail on smartphones: Vodaphone push e-mail, in which e-mail and changes to contacts and calendar, for instance were automatically pushed to the phone in real-time (thanks to the Visto Mobile 5 platform); and Intellisync Nokia push e-mail, which she said was easy to down and install, as well as having attractive bundle pricing for mobile professionals and SMEs.

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Mobile VoIP on smartphones is another ripe application for the industry, said Gerry Purdy, a venture partner in Diamondhead Ventures, a VC firm based in Menlo Park, California, and principal analyst of independent mobile researcher MobileTrax LLC. Dual-mode smartphones, which have both WiFi and cellular capabilities, are a vehicle for VoIP mobile.

The world of mobile VoIP is still in front of us, Purdy said during a panel discussion. It’s on the verge of about to happen and it’s going to happen in a big way.

He even compelled, half-jokingly, the audience to bring their next mobile VoIP application idea to Diamondhead Ventures first so we can make money together.

However, for mobile VoIP to become pervasive in the enterprise, at least in the US, WiFi networks need to be more pervasive, to have a good business case, said panelist Patrick Tao, VP of marketing at Kineto Wireless Inc, a Milpitas, California-based provider of mobile cellular/WiFi convergence applications (based on UMA technology).

I think it’s a lot easier to start in the home, Tao said. Because of the ease of pushing it out there and that cost isn’t going to be an issue … plus the marketing muscles of major carriers … will mean the consumer market will come first [for mobile VoIP].

However, Tao’s fellow panelist Robert Brown disagreed. Brown, who is with the largest provider of WiFi hotspots in the US, WAYPORT INC, said he thinks mobile VoIP starts on the enterprise side.

Brown pointed to enterprise VoIP applications that Texas-based Wayport currently is supporting, such as authenticating mobile VoIP connections between McDonald’s (Wayport’s customer) and its suppliers. As long as we can make the authentification available at all the McDonald’s and it’s consistent, I think this would be [adopted] faster than if we offered subscription-based VoIP, Brown said.

One thing seemed certain: Mobile VoIP will change the mobile carrier landscape in the US.

Right now, for a mobile carrier who has believed that over time everyone would be on their mobile network, the VOIP crowd has put a crimp in those plans, Kineto Wireless’ Tao said.

After all, mobile carriers in the US currently heavily subside mobile handsets in order to attract subscribers to their network services. With dual-mode phones, however, users roam between networks, so the revenue proposition for carriers disappears.

Purdy, the venture partner and analyst, said carriers may see greater traffic by partnering with enterprises to provide mobile VoIP calls within the enterprise (as a fixed phone replacement). Outside the enterprise building, the calls would be handed off to other networks.

Alternatively, there is the opportunity for other companies to extend VoIP to the enterprise mobile client and do away with the carrier altogether, Purdy said.

Looking ahead to the future of the smartphone industry, other industry insiders agreed that the relatively high cost of smartphone devices is a major challenge to adoption.

A panel of several executives from companies including Action Engine, Hewlett-Packard, i-mate, Symbian, VoiceSignal and UIQ Technology concurred that device cost was the No. 1 challenge facing the industry.

Another key challenge is ease of use. The faster we can solve that problem, the more rapidly we’ll see the adoption of smartphones, said Rick Geruson, CEO of VoiceSignal Technologies Inc, an embedded voice-recognition software maker based in Woburn, Massachusetts.

While most of the day’s panels and discussions were focused on the enterprise market for smartphones, Johan Sandberg, CEO of UIQ Technology, a subsidiary of Symbian pointed out that in Europe consumers will drive the bulk of the market. We need to think what does the consumer want? he said, referring to functionality and ease of use.

The panel also agreed that because of the relative high cost of smartphones, the market in five years’ time and beyond will not represent 100% of the total mobile market. The cheapest phones are not going to be smart phones, Sandberg said.

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