Thursday, September 28, 2006

It's the handsets, baby

One message at the MVNO Strategies & Markets Conference this week is that the handset has become perhaps the most important aspect of a wireless service.

Time was, people took whatever phone their carrier offered free. Then came the Sidekick and especially the Motorola RAZR and all of a sudden the phone ceased to be a tool and instead became an object of desire. DP Venkatesh of mPortal pointed out that the RAZR was the first Motorola phone that didn't have a techie name (like StarTAC, V810, etc.). Now we have the Pearl, the Kickflip, the Chocolate and the Q.

And we want one.

This causes a problem for MVNOs. They typically don't have access to the best handsets (or even the second-best). The carriers serve their own retail operations first, then offer handsets to their MVNOs. Hamilton Sekino of Diamond Consultants asserted that the RAZR was partially responsible for the slow growth of MVNOs launching over the past year.

Mobile ESPN has the best data user interface in the industry, but launched with a single, low-tech Sanyo model, and look what happened to them?

Helio, by contrast, has sourced their own custom handsets, at great expense, from VK Mobile and Pantech. And they're pretty cool. Perhaps this strategy will prove successful for Helio. And then other MVNOs will follow, regardless of the price.

(picture: the Hero model from Helio)

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