Perverted Vendors Needed for Mobile Device Success

To succeed in the mobile wireless device market, vendors need to understand its perverted economics. Telcos in particular are the prime perverting force.

Consider, for example, how it’s hard to buy a mobile phone without having to buy it through a telco that insists on offering you a "subsidy" for the phone. Of course, you have to buy a contract, and you end up paying through the nose. It’s far more natural to be able to purchase the cell phone service and device independently, and give consumers the option of buying a bundled package if that appeals to them.

When selling products or services for mobile phones, it’s therefore important for vendors to recognize that there are influential middlemen–the telcos–that use their weight to get a slice of the revenues. Vendors who ignore this do so at their peril.

For example, Symantec has been providing its anti-virus solutions to Nokia phones. The way for cell phone carriers, the middlemen, to make money with this isn’t clear. They’ll therefore resist it. Vendors who recognize the cell phone channel structure, such as Rockliffe/Qualcomm (mobile email client and service–www.rockliffe.com/products/eudora2go/) and Bullguard (cellphone anti-virus–www.bullguard.com/mobile/) thus have an advantage.

David Ferris

One Comment

  1. Simon
    Posted November 5, 2005 at 12:32 AM | Permalink

    “…it’s hard to buy a mobile phone without having to buy it through a telco that insists on offering you a “subsidy” for the phone.”
    Which is why the regulator in South Africa is conducting hearings to determine if our cell phone operators shouldn’t separate the phone from the service.

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