RIM, Nokia, DoCoMo dodge Google's 'dumb pipe' menace
- — 16 February, 2011 23:55
Google's growing influence in the mobile industry is clearly proving worrisome to some established device makers and operators, a few of whom put up a united front against the search giant during a round table at Mobile World Congress in Barcelona on Wednesday.
Leaders of Research In Motion, Nokia and NTT DoCoMo talked about their strategies for working together to face the threat.
Nokia is aiming for "an environment where the relationship between the services providers, handset manufacturers and operators are in an appropriate balance," said Stephen Elop, Nokia's CEO. "Our philosophy is to be the most operator friendly," he said.
Google presents a conundrum for some of the established companies in the mobile industry. Its Android software helped hardware makers such as Motorola turn around their fortunes and has helped operators sell more data contracts. But other phone makers, like Nokia, opted not to use Android for fear that the platform would corner too much of the market and stifle innovation.
Google is also offering lots of services to mobile users that mobile operators would prefer to offer.
"What's most important for the network operators is how to avoid being reduced to a dumb pipe," said Ryuji Yamada, president and CEO of NTT DoCoMo. "We are susceptible more than ever to the risk of becoming a dump pipe ... and we are determined to avoid that by all means."
He said one way to avoid that fate is for operators to offer intelligent services from the cloud. But the example he gave is a DoCoMo service that translates languages, similar to one that Google demonstrated at this same conference last year, noted Ben Wood, an analyst with CCS Insight.
Yamada acknowledged that such services can be offered by third parties but didn't say much about how the operator might beat out Google. "It's a race between these two different camps," he said. "Being the network operator, we are in the best position to know what the network is capable of."
RIM appears to be working hard to try to help operators ward off competition from the likes of Google and others. "There may have to be a Google translation service and a Nokia location service but at the end of the day it better be a DoCoMo service overarching [that directs customers] to their bill and branding and distribution or the alternative is a bit pipe with a programmable SIM," RIM co-CEO Jim Balsillie said.
RIM this week rolled out some new capabilities aimed at helping operators hold on to their relationships with customers. For instance, it offers the capability for operators to let customers "gift" applications or airtime to others, with the charges showing up on their mobile bill. RIM also announced that Telefónica and Vodafone would start letting users pay for applications from the RIM application store on their regular bills.
Operators want to bill customers because they think it helps build a relationship with users and because it could allow for new sources of revenue. With Apple and Android, for instance, most end users pay for apps with their credit cards through the respective application stores and so the operator doesn't get a share of the revenue from apps.
These days, any time a CEO from a company that provides services to end users meets with an operator, the operator is trying to size up the goals of that company, Balsillie said. The operators are wondering if they can trust the company and if its business model has a sustainable business structure for the operator, he said.
"The structure of the industry is very much in flux," Balsillie said. He said the issue of what role the operator will play is the most relevant issue of the industry currently.