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March 22, 2005
Sunrise, Sunset for Poor Man's Cellular
Posted by Dana Blankenhorn
Technology moves in waves. What's passe in one place may be very cool in another. This is how you can cross the digital divide.
Here's an example. At the same time NTT DoCoMo is closing down its Personal Handyphone System, moving customers to more advanced forms of mobile telephony, it's growing like topsy in China, and Atheros is rolling out a new PHS chip.
How does this work?
It all makes sense. PHS combines a cordless phone with PCS mobile voice service. It's sometimes called the "poor man's cellular."
Japan doesn't need that. Japan is a rich nation. NTT wants to push advanced applications. So out goes PHS.
But China, like many other countries, is different. A PHS phone can be run for $4-5/month. That means PHS can reach a broad market even in a poor country. Atheros, which is known for its 802.11 chip sets, is getting into a new market with cellular, and entering in a high-volume way.
It's a win-win-win. NTT raises its ARPU by dumping PHS. China increases penetration by adopting PHS. Atheros gets volume by entering PHS.
What's old to you may be new to me.
Comments (1)
+ TrackBacks (0) | Category: Business Strategy | Consumer Electronics | Digital Divide | Economics | Futurism | Semiconductors | Telecommunications | cellular
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Dana Blankenhorn has been a business journalist for over 25 years and has covered the online world professionally since 1985. He founded the "Interactive Age Daily" for CMP Media, and has written for the Chicago Tribune, Advertising Age, and dozens of other publications over the years.
1. Jesse Kopelman on March 22, 2005 03:45 PM writes...
I don't know. I think vendors selling China on PHS is a bit underhanded. GSM is so mature at this point that I can't believe it costs any more than PHS in the volumes we are talking about. This is a famous trick of the big vendors like Ericsson and Motorola. They wow the numbers guy, who has no idea about the true costs of running various networks, with how their obsolete/proprietary junk is going to be the cheapest solution and then laugh all the way to the bank when the network can't keep up with subscriber growth and needs to be completely replaced in a few years. Meanwhile, they continue to charge a premium for something like GSM that is produced in such volume it should be priced like WiFi.
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