Shaping Up for Things to Come?
by Nicki Hayes, February 28, 2002
Is Nokia's move to drive IP standards a precursor to market consolidation?
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One of the most widely covered of the many stories and non-stories to seep out of Cannes last week is
Nokia's promise to "share" core mobile technologies with its competitors in a drive for "de facto
standardization." Such standardization, it claims, will help stimulate the development of easy-to-use
wireless data applications, thereby generating user demand for 3G services. This is a shrewd move by
Nokia, according to Nicki Hayes, WDN's European correspondent, albeit one that was forced upon them
by the need to shape up for the future.
So, Nokia wants to lead the move towards open IP architecture then. Its ambition certainly seems to have
captured the media's imagination at the 3GSM World Congress in Cannes this year, even though the
resultant coverage seems a tad fragmented. There's talk of extending its Open Mobile Architecture (OMA)
initiative from the handset to the network. There's talk of creating a new division to drive open interfaces
within network elements; such a division will develop modular products and sell them to Nokia's own
systems business and to competing vendors and customers. There's talk of a new open IP base station
architecture. And there's lots and lots of talk about partner support from the likes of Siemens, Telecom
Italia Group (TIM), Openwave, Motorola, IBM and Genie, using terms such as "sharing", "cooperating",
and "interoperability".
Very altruistic, don't you think? Of course not. There's no such thing as altruism not even in the real world,
let alone in the cut-throat world of emerging technology. It is, however, shrewd:
Shrewd because the IT/ telecom convergence thing we read so much about is forcing the traditional closed
telecom industry structure wide open. Gone are the days of vertically integrated suppliers. Market forces
are making restructuring inevitable. In such a situation the best strategy is to jump first. And Nokia has
jumped first, ahead of both its peers and other potential industry beneficiaries, such as carriers. Indeed,
there is a strong argument that such beneficiaries ought to be taking the lead in this move towards open IP
architecture, as they did during the successful deployment of GSM (Global System for Mobile
Communication). Unstrung's Dan Jones was present at a roundtable about this at 3GSM and makes some
very good points in his report (see http://www.unstrung.com/server/display.php3?id=764&cat_id=2).
Shrewd because the much-maligned Microsoft is offering end-to-end solutions for carriers, enterprises and
consumers and Nokia needs to compete by maximizing the market potential for end-to-end integration of
wireless Java platforms in order to maximize the potential to sell its software, hardware and services.
Shrewd because the mobile industry needs to shape up quickly before the money runs out. Wireless's
current topography, with its myriad of acronyms, devices, platforms, providers, standards and protocols is
too sprawling, too complex and too confusing. Carriers have already wasted too much money (European
carriers alone spent $100 billion on 3G spectrum last year) in a market where margins are as thin as newly
formed ice and globalization is the only way forward. Such globalization can not be achieved alone.
Convergence is inevitable and, in the words of Ovum's Mike Doherty "This year everyone's going to be
testing the waters, seeing who is compatible. You're starting to see them flirt with each other."
Yes. Convergence is the only way forwards and the word on the street here in Europe is that there will
eventually be just four carriers and substantially less than the current seven major mobile infrastructure
vendors. The money is on Vodafone, Deutsche Telekom's T-Mobil, Orange and Telefonica in the carrier
world. Bets are spread wider in the infrastructure vendor world, but two things are for sure: Weaker
vendors will be looking for ways to streamline costs - such as downsizing their R&D budget and buying
components from third parties, such as Nokia. Stronger vendors, such as Nokia, will be looking for
potential acquisitions with which a wee bit of pre-nuptial flirtation will do little harm.
Regardless of Nokia's over-riding motivation to open internal architectures, their prudence is to be admired
and the consequences to be welcomed. Innovation and competition will flourish, functionality of handsets
and networks will increase, and costs for operators will be reduced allowing new networks and services to
take shape faster than would otherwise be possible.
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About the author:
Nicki Hayes is The Wireless Developer Network's (www.wirelessdevnet.com) European correspondent and the part-time judge part-time jester of its new online debate -
Holding Court. Nicki also takes on freelance writing and corporate communication projects relating to business to business internet and wireless issues and has
contributed editorial to a number of publications including Unstrung.com, Wireless Business & Technology, Guardian Online, Financial Times, Banking &
Financial Training, eAI Journal and Secure Computing.
About the WirelessDevNet (www.wirelessdevnet.com):
The Wireless Developer Network is an on-line community for information technology
professionals interested in mobile computing and communications. Our mission is to assist
developers, strategists, and managers in bridging the gap between today's desktop and
enterprise applications and tomorrow's mobile users communicating via wireless networks.
We are interested in supporting the deployment of these evolving technologies through
high-quality technical information, news, industry coverage, and commentary. This
information is provided within a true on-line community that supports developer/vendor
dialogue through message boards and user-submitted tips, articles, links, and software
downloads.
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