Sunday, February 11, 2007

Are device makers gearing to compete with carriers?

Ed Sim of BeyondVC has an interesting observation about Nokia's free mapping program, that Nokia is gearing up to compete with its most valuable channel - carriers. Nokia could not just be doing this because carriers are going to Taiwan to get private-labeled phones, and thus put pressure on Nokia's device margins. There is something larger at play here. Certainly carriers have a lot of muscle, and they control the wide area wireless networks. However, municipal WiFi and mesh networks (even though very small and spotty for the moment) are disruptive technologies for Internet access and voice (VOIP) and these technologies could cause problems for carriers in the future. Subscribers will be able to buy devices like Skype phone and connect to these networks for voice and data. Carriers will have less influence on the subscribers, but device makers will still be in the business of making devices for access. Device makers will certainly be able to offer direct services through their portals, other than vocie and data. Even though there are still issues about business models around free networks, but they are still very disruptive technologies. These technologies can turn carriers into just data pipes.
Nokia's acquisitions of Intellisync, Loudeye and now free mapping program are preparations for that coming world.
Is that what Nokia and other device makers are preparing for?

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