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GPRS: providers are "hallucinating" - Canalys

Forecasting a return to growth in mobile phones is brave; Canalys is nonetheless predicting it will happen. But not, it seems, based on GPRS ...

Canalys analyst Chris Jones told the "Mobile Convergence" seminar today that there were good reasons to suspect the mobile phone business might pick up this year. But those reasons don't include a huge increase in demand for GPRS data over GSM, he said.

"When we first bought mobile phones, they worked. Nobody had to ring up Vodafone or Cellnet and spend time enabling voice," said Jones acidly. "And the charging rates could get expensive, but at least you knew what you were being charged."

By contrast, he said, suppliers were simply hallucinating if they thought they were going to make money out of GPRS data. Giving the example of Vodafone GPRS rates, he pointed out that most people would want to transmit around 10 to 20 megabytes of data, at least. The following slide shows just how scary it can get:

"Essentially, it penalises the user absurdly for selecting the wrong tariff," Jones pointed out.

The Symbian operating system looks good in all the market research figures Canalys shows but this, said Jones, is because of a surge in sales into the reseller sector with the launch of the Nokia Communicator. "In fact, with 650 employees, Symbian needs to ship 15 million handsets to break even each year; and most of the figures don't show that. Rather they show that the withdrawal of Psion from the market leaves almost nobody shipping anything - except phones."

But there are 15 products in the pipeline, he said.

There is some leeway for Symbian; Microsoft is "very determined" to make the smartphone products succeed. But determination has had to fight adversity; only the Sendo and Samsung phones have actually been announced, and neither is shipping, months after they were expected to.