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Cellular is on the cusp of becoming like the TV industry. As the technology becomes easier to
manufacture, everyone jumps on board and the big names start to suffer as they compete against
manufacturers located in places with very, very cheap engineers and labor.

Consider that Rockwell sells a complete chipset for a GSM cellphone that costs $50. These
weren't available two years ago, and thus those that knew how to make cellphones and could
afford the capitol investment flourished. Next year and beyond, we'll see hundreds of small
companies take Rockwell (and ADI, and TI, and VLSI's) publicly available chipsets and software
and make phones.


I beg to differ here.

1) Nokia already manufactures in low cost parts of the world (Malaysia and China as I recall)
2) Can you say the words "features" and "user interface"? At the higher end of the market Nokia phones absolutely rock because of their UI (especially their Far east language support) and announced features (WAP etc).
2a) One feature that people tend to ignore is the battery life. Nokia phones do (in my experience) just last much longer between recharges and believe me low power consumption is not something that you can buy from rockwell as a chipset.
3) the ability to make a phone does not translate into the ability to sell one. Consider the venerable KO. Anyone can make a soft drink all you need is some Co2, some water, some sweetner and a little flavouring but KO still has some 50% of the market place for fizzy drinks in the world (see the economist last week). Nokia has great relationships with the channel that most people buy (rent/lease) their phone from - that is the cellular providers themselves - and they give enough margin to the resellers that the salesmen prefer to sell Nokia. This is excluding all the brand building Nokia is doing recently (product placements in movies, sponsorship etc etc).

Even worse, the leisurely pace of "squirt out a
new phone every 18 months" will disolve as the cellular biz moves to Asian-time and new models
are rolled out twice a year by 10 competititors. Suddenly, consumers find 20 new models a year to
select from. Contrast this to the 3.5 year old StarTAC, 3 year old Nokia 61xx and QPhone

I think you missed something - Nokia is now in a sub 1 year product cycle time frame. Take a look at some of the comments by Tero Kuittinen at http://www.debry.com/index.htm


Dirty Dingus
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