Without the support of telecom operators, handsets cannot expect to be sold well.
[+] Can VoIP be taken along with you?
Pretty soon, Skype is going to affect the landline sector, as ADSL is already available in almost every household. Like traditional phone calls, VoIP calls can be made at home, too. It is relatively easier to cultivate the consumption habit of making VoIP calls at fixed spots.
However, Skype is also clear that it would be impossible to become a popular service around the world if it could not break away from the tie of computer screens. The most important thing to achieve the goal of "Skype, you cannot do without it anytime" is to allow the use of the service on mobile devices.
With the spread of WLAN and hotspots (the base station for accessing WLAN), it seems VoIP can be used in the mobile environment. With a notebook or PDA connected to a WLAN hotspot, a consumer could run the Skype program and use the VoIP service.
Now that the dream is about to become true, handset manufacturers around the world are beginning to make the so-called WLAN/Cellular dual-network handset. Particularly, the Taiwan government has identified the dual-network handset as a powerful weapon to upgrade the industrial competitiveness.
The dual-network handset is actually a handset embedded with both GPRS (3G) and WLAN modes. The user can access the Internet through a WLAN in hotspot locations, or through a 3G/GPRS network outside the coverage of WLAN.
That seems to be a complementary to each other. WLAN has high speed but small coverage and poor mobility, while GPRS has much larger coverage but lower speed. The problem is: if all handset users shift to WLAN and Skype for the VoIP service, wouldn't it be a tremendous loss for mobile operators?
[+] Sales of dual-network handsets requires the support of mobile operators
In October 2004, the first dual-network handset was launched in Taiwan. With an appearance like a PDA and an embedded Microsoft operating system, the smart phone was bound with Skype. If you had gone to the market you would have found that the product was sold at a price as high as USD 850.
A handset that cost nearly USD 850 and no telecom operator was willing to provide subsidy! Of course, it is understandable that the handset is so expensive because of the dual-network feature. Even if a subsidy was available, it could be still expensive. However, the subsidy means a cut in the retail price and more consumers' willing to buy it.
The fact that mobile operators could control the handset sales through the subsidy has a terrible impact. If a handset manufacturer has the support of an operator, it could easily achieve sales goal. Without the "favor" of operators, otherwise, a manufacturer would have to depend on itself and pray for good luck.
Telecom operators have all reasons not to support VoIP enabled handset. How could they support some little brother that could grow up to be their terminator? As the mobile communication industry depends to a large extent on the handset sales, it will not be impacted immediately like the fixed landline sector will.
[+] Telecom operators, the enabler and the terminator
Japanese mobile operator NTT DoCoMo introduced its dual-network handset not long ago. Of course, it was a handset integrated with 3G and WLAN modes. The question is: was NTT DoCoMo not afraid of being replaced by VoIP?
The primary target of that dual-network handset, which is coded as N900iL, is corporate users. An Employee can use the handset to access the Internet through WLAN of his/her company. Of course, he/she can use it to make free VoIP calls too, so long as the other party is also an employee of the same company.
Once the employee gets out of the coverage of the company WLAN, the VoIP service becomes unavailable immediately. He/she can still use the 3G network to access the Internet and get linked to the mainframe of the company for data inquiry, but cannot dial VoIP calls through the 3G network.
You see? NTT DoCoMo smartly limits the biggest threat of VoIP within the scope of corporate service. They also know that VoIP is the trend. Therefore, they have chosen the corporate market to test water. With that strategy, they are putting WLAN expenditures of corporate clients into their own pockets.
In addition, the handset manufacturers in Taiwan have received orders for dual-network handsets from telecom operators in the United States and Europe. The point is: all those operators offer their own WLAN service. For example, the largest mobile communication operator in the United States Verizon Wireless offers the WLAN service across the country.
Whether to make mobile phone call or access the Internet through WLAN with notbook computers, subscribers have to use Verizon Wireless service. Therefore, it is nothing strange for that telecom operator to buy dual-network handsets and sell them to its subscribers. After all, the money eventually will fall back into its own pocket!
[+] Wireless bandwidth is not an unlimited resource
One of the distinct identities of mobile communication is the scarcity of frequency bands. As communication frequency bands belong to the public, governments issue licenses to allow competent ones to run mobile communication companies. Once a frequency band is issued, no others are allowed to use it.
Also, the base station resource is limited too. Once the capacity of a base station is full, other people will not be able to access it, whether they want to make phone calls or to access the Internet. Otherwise the connection speed of each computer would be extremely slow, because each person could get only a tiny portion of the bandwidth.
Because of that identity, a comparatively low monthly fee to allow as many calls as you want would be hardly possible, even if VoIP through handsets would become a reality in the future. With so many people squeezing for the limited wireless resource, communication rates for mobile VoIP will not be as cheap as you expect. To mobile operators, the threat of VoIP is much smaller.
As we talk about VoIP, we should never forget that traditional telecom operators are still powerful. In face of the inevitable trend of VoIP, the way traditional telecom operators react will re-shape the landscape of the entire telecom industry.
2004/12/19 - By Digitalwall.com - Way to
China Internet/Telecom )
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Internet and Books (2) the Supply for Content Exceeds the Demand - 2005/12/11
VoIP (4) Dual-network Handsets Will Die of Subsidies - 2004/12/19
VoIP (3) Phone Number Is Vital - 2004/12/12
We can see clearly what a small group it is. Most smart phone uses are those with experience of using PDA, whose number has grown at a very slow speed during the past years. How many users, then, can we expect for smart phones? From the above figure we can see that, despite its small market size, the smart phone user has been a target of both PDA and mobile phone manufacturers. For the latter, which have accustomed to catering for the mass market, this small segment could mean additional customers anyhow. Yet for PDA manufacturers, who have far less customers (than mobile phone manufacturers), smart phone user could mean a great loss if it is pulled away. Therefore, PDA manufacturers' drive in the smart phone market seem to be an offensive strategy for new customers, but in essence, it is a defensive move to prevent the loss of existing customers. Under the attack from both the handheld PC and smart phone, PDA is loosing ground continuously. Manufacturers that only produce PDAs might start to consider making smart phones or full-functioned handheld PCs (as discussed in previous sections). For consumers, that means more options of portable devices. In addition to PDA, they can choose handheld PCs or smart phones now. One thing in common, however, is that most users of such kind of products are business people. Only handheld PCs and smart phones have little opportunity of entering the mass consumer market. The following figure shows the market distribution of the products. 
The demands of the business people are very steady, while at the same time this market is being shared by three types of portable devices. It means that each kind of manufacturer could only get a small portion. How can they not be so tired? In addition, PDA is going to face more and more severe and deadly siege. 
In other words, not everybody needs a palm-size notebook. However, if the price of such a notebook drops to the level of a PDA, consumers would begin to consider: "why not buying those with better functions since the prices are about the same?" Replacement would happen then. 
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