Handset market updates

Actually, this is not true - you are not going to see a Google Phone. Rather than that - Google is getting involved into the development of the new platform, which will allow a new kind of "open handsets".

A press release was made today by Google Inc. and 30+ other companies announcing the new Open Handset Alliance and the Android operating system for mobiles. Between the companies involved are such big names as manufacturers HTC, LG, Motorola, Samsung, networks China Mobile, KDDI, NTT DoCoMo, Sprint Nextel, Telefonica, T-Mobile. The new platform is supposed to enable consumers to get the maximum out of their phone - like the advertising for it says - even getting you to the Moon.

The Android platform is going to be an open source, Linux based operating system, allowing developers free access to all the functions of the mobile phone - with an additional benefit of decreasing the development costs for handset producers. All of the members (and actually - everyone else), will be allowed free access to customize the phones as they see fit - create applications, services, easier-to-use interfaces. The Android will be in direct competition with existing software - Windows CE, Symbian OS, Palm OS, etc.

How does this affect the wholesale market? It is hard to answer by now - the first cellphones based on the new system are about to appear only in the second half of 2008. If the platform is as great as it is sounds - it will obviously have consumer interest, thus influencing the overall growth of handset sales.

Another question posed by the new platform - how are the network operators going to deal with the locking issue? Since the platform will be completely open source, any user (with sufficient technical knowledge) should be able to hack their own devices (including the removal of software locks). This will definetly decrease the prices for unlocking such phones, and as well increase the prices of the handsets bought from the operators directly, because of less subsidies.

Considering the platform is targeted towards the smartphones - there should be an overall decrease in 3G and mobile internet service costs, which in turn will increase the sales of any other smartphones - not nessecerily based on the Android.

In any case this looks to be great news - both for the consumers, and for the wholesalers. And be sure - whenever the new phones appear in the market - you will be able to find them on our trading floor.

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