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The Wireless Outpost Newsletter Issue #14 Vol. 4
Wednesday, August 28, 2002
Another issue of the Wireless Outpost Newsletter. This newsletter
is for the soon to be educated cellular phone user community. If you know of
anyone else that may have an interest in our newsletter, make sure to forward
them a copy. Now we move forward at Mach II speed!
[Note: This newsletter is delivered Bi Weekly on Wednesday.]
BREAKER! BREAKER! I CAN FIND SMOKEY AND HIS BANDIT
Remember the movie Smokey & The Bandit with Burt Reynolds? The problems that the police experienced then wouldn't be a problem in today's world. Axiom Navigation Inc. has produced a new device that would make it fairly difficult to lose a truck and
its precious cargo too. Though it is being designed for commercial applications, it could be revised for military applications too.
They have manufactured a series of devices dubbed the Accu Tracker. They combined wireless data transmission with GPS to come up with this device. It looks like it has some far reaching capabilities as it will cover most of Canada, Mexico, the US, and some areas in Latin America and South America.
The goal is to pursue the trucking industry that need to have an ace up the sleeve for their fleet management activities. What makes it even more unique is that it can send pages to the mobile unit from the control center for location information,
provides automatic location reports based on time intervals, and a motion sensor for power management or unauthorized movement.
Potential applications for these devices range from rental U-haul trucks to Post Office jeeps. In the event that the vehicle is stolen, a geofence capability will kick in to alert the control center of any deviation from the destined route. In essence, it is an electronic tattle tale device. The geofence device's parameters can be set by the purchasing party.
How these devices could be used by law enforcement and for military use is unknown at this time but we are confident that it could be easily adapted for that purpose. For the purposes of asset protection, these devices could save millions of dollars each year not only for the companies in lost equipment but insurance companies as well.
The possible reduction in insurance rates and the added peace of mind could make this a worthwhile effort for companies with fleet management operations. There is also a built in safety benefit in having these devices installed. If they are programmed for sending location data on set intervals, the center can determine if the driver is being a bit reckless with speeding.
It is simple enough to calculate the posted speed limit and how far along the route a driver should be. If they are too far ahead or too far behind schedule then the center will know the driver has either been goofing off or has been speeding far too much. Which once again, can have an impact on insurance rates if speeding tickets have been piling up.
EVC TO OFFER CELL PHONES ON WHOLESALE & INDIVIDUAL BASIS
We have recently expanded our cell phone handset product offerings. We have decided to go all the way this time with supplying both the individual consumer with replacement cell phones, to the retailer who needs cellular phones on a wholesale basis. You name it and we will probably have it. Consumers and retailers are welcome to inquire into available stock. Here is a brief outline of what we will be able to offer.
Depending on what we have available, we can offer cellular phones on an individual basis or in very large quantities. Most of them are either wireless carrier returns or manufacturer surplus. These will be new and used cell phones. You are also going to be hard pressed to find our pricing from any other cellular phone supplier. As far as what we can offer:
We will be offering GSM phones with European specifications, digital cell phones of all kinds, 3 Watt bag phones, brick phones, and more than I can think of right now. All I can say is that we have
a lot of different phones to offer. The next time you need a cell phone, drop us a note with what you need and we will see what we can do for you. Might even
have some of the more ancient cell phones in stock.
This is a recent development and it is one that we really like having. There hasn't been a single inquiry in the past month where we were not able to fulfill the request. We have only one restriction and that is that we will not do business with brokers. If you want to place a substantial order of 500+ phones, you must be able to supply a PO with your complete company name and contact info.
As a side note, do not rely on the pricing or products listed on our cell phones page. Our inventory changes on a daily basis so it is difficult to keep the webpage up to date with product availability and current pricing. You would be better off contacting us to determine availability and to check on the current pricing.
Don't worry if you have lost or damaged your cell phone and need a replacement phone. We have no problem offering our cell phones on an individual basis. We haven't decided if we really want to ship individual GSM phones on an international basis though. The paperwork to pass through customs is a killer and is quite time consuming. We will keep you posted if we decide to take on that task.
For now, we will only sell the GSM phones on a bulk quantity basis. So if you are looking for a good deal on cell phones whether it is for a single phone or a bunch of them, contact us at
cellphones@earthvisioncellular.com
and tell us what you need. If for some odd reason we don't have what you need, we will put you on a notification list when it does become available.
HOP ON WIRELESS GETS SUED FOR NONPAYMENT OF CELL PHONE DESIGN
I just had to throw this one in here. Somebody forwarded a message to me with a case number and everything showing that Hop On Wireless was sued for non payment. The case was filed in San Diego, California. I have to wonder if they are having some financial problems or something because they were sued for such a small amount.
The lawsuit for something like $3,000 dollars and the plaintiff is Doris Waller. It appears as if she designed the Hop On Wireless disposable cell phone and was never paid for her work. So she sued them for payment and legal expenses. You would think that she would have been the first person paid by the company. This company is developing quite a scary track record.
It doesn't look like the lawsuit is a factoid being thrown out by the mainstream media yet. It might hit the news prior to this newsletter being distributed. Who knows. The company has also announced that they signed an agreement with an IVR service bureau for their prepaid phones. They actually sent out a press release (PR) with plenty of fluff in it.
Reading through the PR was somewhat confusing. We were not clear if the IVR company was providing the airtime for the phones on behalf of the regional carriers or if they were offering nationwide coverage through all of the carriers. A moot point for now as they don't even have any disposable cell phones to market. We haven't figured out if this is the same company that
Tracfone is using or not for their prepaid cellular platform.
The next question will be how much the IVR service is going to cost Hop On Wireless and if it will be cost effective enough for them to provide service. In total, we are waiting to find out when the airtime units will expire and how many units are offered and for how much. That is going to determine how much of
Tracfone's low volume users they may be able to steal.
It is a given that people will buy a disposable cell phone due to the novelty of it. Then we will have to hear the hype about how many have been sold, etc. Then will come the fluff PRs to distract us from paying attention that sales did not maintain the break neck volume they did when first introduced to the public.
Nor has it been clarified if these disposable phones will allow for incoming calls. The fact that this wasn't mentioned in any of the press releases that we reviewed actually made it more visible. We are constantly looking for what is not said more so than what is said in a PR. If all this publicity was an attempt to improve their stock price, it isn't working too well.
Even after the CEO got on CNN and started promoting the product, the stock remained in a penny stock status. They are definitely making a major publicity push with blazing guns too. I think I read two PRs in a single week along with the push on CNN. A waste of money that should have been saved for the production of the phones and the designer if you ask me. No offense to the
publicity firm as they did their part and did it well.
LET'S SEE WHO IS HIRING FOR WHAT IN THE WIRELESS INDUSTRY
Thought we should take a moment and do a review on what wireless companies were hiring for various positions. Good stuff to know if you want to get the pulse of a specific company and of the industry as a whole to some extent. OK, so it gave me a chance to unleash some more of my sarcastic humor too. Here is what we found.
VoiceStream is hiring for a Call Center Site Director. Wearing corrective lenses is not a requirement.
Arch Wireless is hiring sales reps, customer service reps, and (uh huh) collections people.
AT&T Wireless is hiring for sales reps too. Enough said?
Tate Wireless is hiring for both a sales manager and a sales consultant. I think they misspelled Tater. At least that is how we spell it down south. Then again, my family is a bunch of hicks so what do we know about spelling.
Simply Wireless has a bunch of entry level positions. Sounds like they are keeping it real simple.
Verizon Wireless is hiring for a business sales manager in New Orleans and a bunch of retail positions in California. I take that back, they are pretty much hiring retail sales people just about everywhere. Just go in and ask for a job. It beats working for Burger King.
Nextel Communications is hiring a Decision Support Analyst? I think that means if you have to make a decision, someone else will analyze your decision for the best angle in case something goes wrong and support your decision without question. They are also hiring an indirect sales training specialist? Indirect sales training. Let's see. You first try to sell the CEO on buying a bunch of
gummy bears. If that doesn't work, you call the receptionist and ask her to buy some products for the company instead.
Cingular only needs a customer service rep, a telesales manager, & a retail clerk for a kiosk. I have always wanted to work in a box where bored mall shoppers pretend not to see you.
US Cellular needs an area sales manager. But they need you in Guam? (Just kidding.)
GSM Wireless can use an HR coordinator & a payroll coordinator. HR & Payroll at the same time.
T Mobile USA could use a RF engineer in Irvine, CA. I think they want to make sure Cingular gives them enough tower space so they don't get caught up in the whirlwind of consumer complaints running rampant in California.
Virgin Mobile wants a product management and execution director? They still allow employees to be executed?
THE PSYCHOLOGY OF WHERE IS THAT WIRELESS SUBSCRIBER GOING
Recent market research shows that around 35% of cellular phone users switch providers each year. Add that to the current issues that wireless carriers are dealing with as a business and we have a recipe for change. One that cell phone users and carrier employees aren't going to like very much. Here is what we expect to see happen in the near future.
You see, it costs the wireless carriers about $300 maybe $400 to acquire a new customer. That includes all the various expenses such as advertising, subsidized phones, etc. The wireless carriers must contend with slowing growth, coverage gaps, customer complaints, dropped calls, and more which all cost money.
Sure they could reduce their expenses by building out their networks to eliminate dropped calls which would eliminate more complaints which in turn would reduce the churning of customers. The real question is why do we as cellular phone users switch to different service providers so often. Price. That is all we really have to distinguish one wireless carrier from another.
OK, so there are different phones too. But how about the services being offered. Is anyone really offering anything different? No. The carriers have fallen into the dot com syndrome of selling on price alone. They have failed to
differentiate themselves on their service. Consumers of cellular phone service have no reason not to churn based on that reason.
If your carrier provided you with excellent customer service, had coverage in just about any location you needed it, and you rarely had to worry about dropped calls, would you switch even if you had to pay a little more? Probably not. If the carrier provided a service that you really liked along with that and no other carrier could beat that service level, would you switch? Very doubtful.
Should another cell phone user tell you that they use such and such because they don't have dropped calls and they can get a signal just about everywhere they go, but they pay $10 more a month, what would you do? You would probably switch even though it cost a little more. It is a scenario that I am sad it say probably won't ever happen in the near future.
Instead, carriers are clamoring for consolidation to save on expenses that way. You and I will have to suffer the cost of their foolish attempts to build out networks for data services that never became a hit on the market. When they should have been finishing up the buildout of their voice only network towers to improve coverage areas before they tried to tackle a new type of technology.
The carriers put the current market problems onto themselves, in my opinion. The people who are managing these wireless carrier companies either have no clue, no vision, or both. The answer is right there in front of them and they can't even see it. There is a saying in sales that states that people do not buy on price but on benefits.
Well, most wireless carriers are basically clones of one another so price is the decision factor. As a business, we know that it costs more to provide a higher level of customer service, to provide a broader range of products, and to make sure we carry only the highest quality of products. Paying the higher price is the cost of doing business and in establishing a future for our companies.
What we focus on is offering our customers the best deal for their money with more choices, efficient customer service, and quality products. The less time and labor we have to spend on complaints or returned products is that much more we can use to invest in our backend operations. By enhancing our customers' experience with our companies, we earn their loyalty. It is called being efficient.
Nor do we have to raise prices to give us that extra little umph over our competitors. If our expenses remain the same and we buy more product because we have added more customers then there is no need to raise prices. Buying or selling more product affords
price breaks to both parties. It also means that everybody wins all the way across the board.
What is so hard to understand about that? We continue to grow as a company while our competitors continue to struggle and/or fail. Yet, the wireless carriers still go toe to toe with each other over price rather than fixing the real problem which is customer perception. Then they wonder why their stock prices are falling by leaps and bounds. There will come a day when somebody with half a brain realizes that they need to get back to the basics of what it takes to grow a company.
Do you realize how much money carriers would save on their backend operations if they pushed for a buildout of their networks for voice services?
Acquisition and customer service expenses would be reduced, they would improve subscriber loyalty, and they wouldn't have to deal with as much regulatory and legal issues.
Oh yeah. Expect more consolidations & mergers over the next year or so. You are not going to have as many options as to who you can switch too either. Don't expect any changes in the quality of service being changed anytime soon either. As service providers, they aren't as apt to focus on an investment into physical property. Instead they will go for the short term
and immediate gratification.
Wireless carrier employees should pay attention too. You may just find that your bonus checks are tied directly into customer satisfaction and reduction of churn. How you will be able to prevent billing errors, coverage gaps, and dropped calls is well beyond my comprehension. Good luck to you on that one.
As a side note, if anyone is wondering why dot bombs don't work as a business model. It is because they are trying to be product providers with a service provider oriented mentality for instant gratification. What they get from that are very poor profit margins, upset customers, and major inefficiencies. You have to be able and willing to invest in the necessary inventory and resources to actually conduct business. Wireless carriers among others are living proof.
SOMEBODY SHOOT ME! ANOTHER DRIVER DISTRACTION STUDY
It has been determined that if you are shot by a BB gun, it could be a factor in a driver being distracted. That is my own scientific deduction and this specific study has nothing to do with being molested by a wacko wielding a BB gun. This study is a bit more extensive with using MRI technology to review the brain patterns while people are conducting different tasks.
GM has sponsored a Detroit medical school with a $100K grant to conduct a study which analyzes the emotional and sensory activity of the brain to
evaluate the distraction of various tasks we would perform while driving. This study will also look at emotional distress as a factor in driver distraction.
Obviously, GM wants to conduct the test since they are looking to offer telematic services in vehicles. The human rats will be subjected to a variety of tests which include driving simulations while using telematic devices, talking on a cell phone, and talking to another passenger. If they don't add eating and changing the radio as one of the possible scenarios then I would have to say the study is completely invalid.
I even read that some consumer advocacy group supposedly conducted a test where 76% of the people said they support some type of legislation against cellular phone use while driving. I suppose that means out of the ten people they interviewed, seven politicians said yes to legislation, two consumers said no, and one politician up for election was undecided.
Our research would say that this poll would have to be seriously flawed somewhere as that isn't the word out on the street or in most other surveys conducted on this issue. Sounds like some special interest groups may have been involved in that polling. It is common knowledge that driver distraction is related to around 30% of fatal car crashes.
How much of that is due to driver distraction is in serious dispute. The research is also being done for GM's rollout of the
Sensible driving program. The advantages to the study is that it will show how drivers react to different pressures, stresses, and distractions. With that knowledge, car manufacturers can develop a safety program for the use of telematic services to make it more palatable to consumers and politicians.
It may also make politicians or myself look very very stupid depending on the results. I am confident that it is the politicians who are going to be running for cover rather than my
having to post a retraction. No idea as to when the results should be released but we will keep you posted when they are.
NEW KIND OF POWER SOURCE FOR MOBILE DEVICES COMING
Lithium Polymer batteries for cell phones was one of the latest break-throughs in technology. There will be more to come. We kind of knew about this some time ago but we wanted to wait and see what else was going to happen. Now you are about to find out about some new batteries that may come to market.
A company called Medis Technologies has developed another battery that will use methanol to generate an electric current for use in cellular phones. The battery should allow for about a week's worth of power for use in a cell phone. They also anticipate coming out with a battery that will last at least eight times longer than the Lithium Ion battery.
From reading through the material on their product, we couldn't tell if it would be as environmentally friendly as the disposable ZincAir batteries. Their website says methanol and
hydrogen as being present in the cells but I cannot recall the chemical properties. But I am pretty sure the methanol is prone to explosion when combined with oxygen and then heated could create what is called an oxidation reaction. Check me on that if I am wrong as I don't want to give wrong information.
Maybe the hydrogen prevents this from happening. I can't say for sure without confirmation
from a chemist. Motorola is also getting into the game of using hydrogen as a catalyst to generate power for batteries used on electronic devices such as cell phones too. The problem of the excessive heat created when methanol is converted into energy seems to be a problem for many battery manufacturers.
They are looking at a number of different options to combat the heat such as ceramic insulation to water cooling. Because these units are self contained and provide power as needed, it could make car chargers an obsolete device. We may see these types of batteries hitting the market as early as 2004.
Then there is one more type of material and technology currently being researched. Nanolithium Carbon. Nanotechnology will allow for smaller devices to be built and the materials used in nanotechnology have better heat conducting properties than methanol and other chemcial driven batteries.
If you must know more about this type of technology, check up on the above companies as well as IBM and MTI Microfuel Cells. There are several other players out there too. Motorola intends to be a bit more
aggressive in offering batteries for all the different types of electronic products. They will be stepping on the toes of the major battery manufacturers in doing so.
Cell phone batteries will continue to be a major industrial segment for manufacturers. Though demand is going to fall quite heavily as these batteries will not have to be replaced as frequently. You may have to
replace them every 3 to 5 years rather than the current year or two now. Yes, I just got a vision from my crystal ball.
Dot bombers will be finding themselves migrating into the already competitive field of wireless service plans to supplement their income from lack of product sales. I see a bunch of them going down the drain in the next couple of years and a vacant dotcom wasteland within five. You would think MCI Worldcom would have gave them a clue.
ANOTHER INMATE SCAMS A CELL PHONE COMPANY AND GOOD
This time it was Nextel Communications who was scammed and they were taken to the cleaners real good. An inmate sitting in the LA County jail had some time on his hands. After watching a TV show, he got an idea. Thought it through and decided he was going to call on a wireless carrier to try to get them to send out cellular phones at no charge.
At least that is what I guess happened before he scammed Nextel out of a 1,000 cellular phones. He called on them stating that he wanted the phones for movie shoots. They probably figured it was as good as any other publicity and they sent out the phones. The inmate impersonated executives from Sony pictures using three different names of executives at the company.
It appears as if they didn't bother with confirming his requests until after the phones were shipped out. It doesn't look like LA uses the payphone systems that alert the caller that they are
receiving a call from a correctional facility either. In any event, this guy was charged with a felony charge of trying to defraud a company of more than $1 million dollars.
They found some of the phones in a FedEx facility in Manhattan. No word on if he had any
accomplices or just ran out of money for the phone time to redirect the phone shipments. Now, I don't really have a problem with Nextel as a company but this is entirely too stupid to believe. How could they allow the company to be scammed out of a 1000 brand new phones like that. He shouldn't have got past the first phone call.
That is the oldest trick in the book. We are often contacted by individuals or entities in foreign countries trying to scam us out of products and we laugh about it. They do give it their best shot too. It is so common that we even have a standard response prepared in advance for when we get these types of
inquires.
For a while there, we would just send a response that we would like to invite them to our offices so that the CEO could slap them in the face, call them liars and dirtbag thieves, and we demanded a duel. They must have thought we lost our marbles because we never heard from them again. I should
revise my statement to say that these inquiries used to be common.
Word must have gotten around because we no longer get as many as we used to get. Maybe once every six months now and sometimes we get fraudulent orders being placed from French Indonesia and other areas of Asia too. They are in Asia where products are
manufactured for a few dollars and they want to buy it from the US and pay huge custom fees? Right.
This guy was very clever or whoever sent him the phones was a real bonehead. I mean how did he get past not having a return phone number. Why wasn't a fax sent for confirmation. Lastly, why would an executive director be calling for cellular phones for use on a shoot?
Unbelievable, I say.
SONY ERICSSON TACKLES THE CHINESE MARKET AND NOKIA PULLS BACK
Sony Ericsson must be getting worried about their marketshare. They are now entering into the Chinese market and they are trying to slow down aftermarket sales of their accessory products. Nobody cares anymore if they have a brand name battery that costs more money or an aftermarket battery that does the same job for much less. Then we have China. A bad move?
Motorola is gaining in popularity in the Chinese market. It has gotten to the point that Nokia is pulling back on the Chinese market in concession to Motorola's current gain in marketshare there. Motorola has around 31% and Nokia has fallen to 26% and Sony Ericsson has less than 5%. The loss in marketshare in mainland China has pushed Nokia to look at Taiwan as a possible market for penetration.
Sony Ericsson is hoping to gain marketshare in China by promoting their cell phones that allow for data services. But here is the problem with that. China has over 1 billion people in their population. Out of that, less than 2% have cellular phones and those
who do only use them for voice conversations and SMS. They really have no use or interest in data services over there.
A similar problem that we are seeing here in the US with data services. I might add that Motorola having a 30% marketshare over there means that more Chinese use Motorola phones than Americans use Nokia phones. China has over 176 million cellular phone users. We have just under 140 million cell phone users in the US.
China also has a potential cellular phone user market ten times larger than that of the US and Canada combined. If Motorola can continue their growth in Asia, they could take over the #1 spot as a cellular phone manufacturer. Sony Ericsson's attempts to fuel their marketshare in China will actually impact more on Nokia as the two of them are promoting the higher tier cellular phones.
Back to Sony Ericsson's concern over aftermarket batteries, they say that people are getting ripped off with low quality counterfeit batteries. So they are now putting holograms on their batteries so people will know they have an OEM battery from Ericsson. Counterfeit batteries must be a problem in Europe or Asia but it isn't here in the US.
If someone were to try that here, they would have to contend with the FTC and state attorney generals. I myself would have no problem with using aftermarket knock off batteries if the quality is there. But I would pay attention to cell phone accessories outside of batteries because some of them really are of horrendous quality. Fake leather, cheap plastic, and what have you.
Now that Sony Ericsson has lost ground in Europe, they may have some problems all the way around the board. Why they are still trying to peddle cell phones for 2.5G and 3G services in completely bizarre in my opinion. Maybe they should check and see why their competitors are stealing their marketshare. That might help get them back on track.
AMERICANS LOOKING FORWARD TO SMS BASED ON SURVEY RESULTS
SMS may become the next king of wireless services outside of voice communications. A recent survey conducted by Verizon Wireless has some surprising but not too surprising results. The bottom line is that Americans are eager to start using SMS and service providers need to pay attention to this market. Especially women. The study queried the 15 - 49 age group.
In the survey, 87% of women in the 30 to 40 year old group said that text messaging would help them both in personal and business communications. 89% of all respondents believed that wireless phones with SMS service would be the most useful if they could easily send SMS messages. The respondents also believe that SMS will help improve cellular phone etiquette.
Those people who would like to multi-task would do so at the following events with SMS. 58% would do so at the movies, 41% at loud sports games, and 39% in lectures and classes. 92% said speed of sending or
receiving text messages was the most important part of the service.
The survey also noted that text lingo was also widely recognized by respondents. Email is the number one thing that consumers would like to get via their cell phones. Weather forecasts, traffic updates, and news followed email. Game playing actually came in fifth place. 83% of women said they would use SMS to keep in touch with their family. When it came to keeping in touch with in-laws, only 53% said they would use SMS for that reason.
It is expected that in only a couple of more years, there will be 15 million people who are using SMS services. The number of SMS users is expected to substantially increase over the coming years. With that will come more creative forms of sending spam to SMS subscribers. To avoid a backlash due to the cost of services, the wireless carriers will probably sponsor the spam so that subscribers are not charged for advertisements.
A precedent that is already being set so that when adoption continues to increase, subscribers will not give it a second thought as to why they are getting advertisements via their cellular phones. That
advertisers will pay the carriers a set amount for each spam message that is sent out to individual SMS subscribers.
As far as we are aware, there is no way for subscribers to opt out of receiving SMS messages from carriers carrying updates and attached advertisements. Although SMS may make it convenient to communicate, it is still a buyer beware situation. Lawsuits against SMS spammers are already in progress and working their way through the system.
Did you know that by the end of 2003, there will be approximately 1 billion cellular phone users worldwide? Who knows what it will be ten years from that. But an IDC reports says that camera ready cell phones are going to be the next big thing with consumers. It is estimated that by 2006, image enabled electronic device sales will hit 151 million units per year.
For some reason, handsets are only expected to make up 11 million units. Wireless carriers are going to have to pay attention to the subsidies that they offer on image enabled cellular phones if they want to promote the adoption of these specific types of cellular phones too. Asia will probably be the fastest adopting area for these devices.
We would anticipate that this may become another revenue source for carriers as it is likely they will charge for the transmission of images over their networks. The weird part is that this may be something that is going to help cut down on crime too. What is to stop a passerby from snapping a shot of criminal activity and sending it right off to the police. Busted!
Maybe wireless carriers will find it in their heart and allow for images being sent to law enforcement at no charge. The other industries who may not be too pleased with this situation is the camera manufacturers. If you happen to be out and about and decide to snap off a photo to email back home, the convenience may be worth the cost of transmission.
Some companies are already manufacturing cell phones that include a short video camera that can store up to 100 images or so with a swivel camera capability. Picture clarity should be pretty good too. It might be time to open up an electronic photo album shop. If you get a chance to look at some of the more advanced models, you should do so. They are nifty little things.
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