CTIA was pretty quiet in terms of product annoucements, with most of them front-loaded at the beginning of the year at shows like CES, 3GSM and the Spring CTIA show. But Kyocera was showing off a new product that was very, very cool nonetheless, its KR1 EV-DO Router. It’s pretty straightforward: you take an EV-DO card and plug it in, or connect and EV-DO handset via USB, then share a single connection out over Wi-Fi or its 4 Ethernet ports.

This certainly isn’t the first product of this type, but there’s one major difference — its price. While its most popular competitor goes for $500-$700, the KR1 will cost closer to $200, without the EV-DO card.

There’s another interesting facet to the story, though, too: while some European carriers have started selling similar products for UMTS networks, US carriers have thus far put an emphasis on getting their equipment built into laptops, which lets them control the hardware like they control handsets and try to prevent multiple users from sharing a single data subscription. Kyocera apparently approached one of its carrier customers with the device, and the carrier responded that they’d love to sell it — if they integrated the EV-DO card into it. Kyocera balked at this, presumably understanding it would undermine what could be sizeable retail sales, and said no. (It’s not hard to guess which US CDMA carrier with EV-DO that was.)

So the KR1 will be available in retail stores — and from a second-tier US carrier that’s looking to grab more of the enterprise market. Nice one.

I wrote about Trip Hawkins and Digital Chocolate last week, when the company released some casual multiplayer games. I noted then that Digital Chocolate’s releases highlighted his understanding of the mass market for video games. While the games aren’t anything with fancy graphics or deep gameplay, they’re much more likely to resonate with a wide audience than the latest Madden football or Mortal Street Fighter Grand Theft Kombat Auto 37 are on mobile.

Hawkins gave a keynote Wednesday morning at CTIA and elaborated on this further, but probably the most interesting thing I took away from it was that he said games have to give people an excuse to be social. He raised the example of Trivial Pursuit when it came out — it gave people a reason to invite their friends over and have a party — and also fantasy sports leagues for guys, which becomes a way to reach out to and interact with their friends, rather than calling each other up to have intimate chats.

This drives Digital Chocolate’s choice of games, but also how it builds them. Not only does it create casual, social games, it also seeks to build communities around them that encourage both in-game and out-of-game communication among players. That’s where it gets interesting for carriers: instead of just getting $5 for a Java game download, they get that revenue, then additional revenues from all sorts of ancillary services: adding on additional content to games, messaging, sending in high scores, and so on.

Hawkins realizes that we all play games, but since a lot aren’t console games or the type of games teenagers play, we don’t always know it. But what he really gets is that the games most people play are built in one way or another around social interaction — and encouraging that, rather than flashy graphics, is how to attack the bulk of the market.

A couple of weeks ago, I posted a piece about the new wannabe entrant into the handheld gaming market, “Gizmondo - Do They Know What They’re Doing?“. My conclusion was that they probably didn’t:

It seems to be a so-so product (let’s be charitable), launching into an incredibly competitive market, with entrenched, strong incumbents and trying to do so at a premium price, with a model that forces you to watch 3 re-hashed TV commercials every day.

But that hasn’t deterred the management from announcing yesterday a Nasdaq listing.

So in Part 2 of this post, I’ve been doing a little digging into the management’s track record so far, alerted by a post on Gadget Guy. It’s turned up some very interesting finds. I don’t even need to comment, as the content of their annual report available on the Securities and Exchange Commission website says all that needs to be said.

Just remember that this company pays its Directors well, by any standards, bearing in mind that the launch of Gizmondo has only happened in one market (the UK) and hasn’t exactly been a spectacular success to date:

In 2004, Michael W. Carrender (CEO) earned $ 1,266,783
Carl J. Freer (Chairman) earned $ 1,075,684, a bonus of $ 1,123,850 and stock awards amounting to a further $975,000, plus other compensation of $279,516.
Steve Carroll (CTO) earned $ 1,020,580, with stock awards of $ 1,492,587
Bo Stefan Eriksson (Director of Gizmondo Europe) earned $867,465, a bonus of $ 1,365,456, $884,024 stock awards and further compensation of $104,095

Tamela Sainsbury, the corporate secretary of Gizmondo Europe, is the co-habiting partner of Steve Carroll, a director of the Company. In 2004, Gizmondo Europe paid Ms. Sainsbury $149,844 in base compensation, other compensation and bonuses of $82,954 and provided her with a luxury automobile valued at $69,108 at the time of acquisition. In addition, in 2004 the Company issued Ms. Sainsbury a
total of 160,681 shares of the Company’s common stock valued at $467,213. Ms.Sainsbury’s base compensation for 2005 is $192,777.

In August 19, 2005, Ogilvy Group Sweden Limited (”Ogilvy”) commenced an action against Gizmondo Europe Limited in the Stockholm District Court to collect approximately $4.1 million plus interest allegedly owed to Ogilvy for marketing and advertising services provided to Gizmondo Europe during 2003 and 2004. Gizmondo Europe’s relationship with Ogilvy was terminated on June 30, 2005. The Company has issued 400,000 shares of its common stock to Ogilvy as collateral for Gizmondo Europe’s obligations to Ogilvy.

This is on top of the legal disputes highlighted in Part 1 of this post, plus there are others in Report.

I’m rather lost for words. Or am I missing something?

Edgar Bronfman, ever the consumer’s friend and CEO of Warner Music, gave one of the keynotes this morning, and he’s definitely bullish on mobile music — mostly because he thinks it’s a way to stop piracy (which doesn’t really make sense, but then neither does much of what he says about piracy, copy protection and DRM). Some highlights:

- He’s impressed by the fact that KDDI’s attracted a relatively high number of mobile downloads at a price higher than standard online downloads. It’s not clear if he has an understanding of why people in Japan will pay a premium, or just that they do it. The idea that people will pay a premium for a service just because it’s mobile really doesn’t always hold — after all, what premium price does mobile voice attract these days?

- His general motivation behind mobile music is that it adds another point of distribution and, in conjunction with copy protection, another de facto format for music. He said that the music business was its “healthiest” when it sold vinyl, cassettes and CDs, and it sounds like that’s how he sees mobile music, as another media. Meaning that you’ll have to buy a CD to listen to on your stereo, another file for your computer and another for your mobile phone (in his ideal world, anyway).

- He also mentioned how Warner has integrated wireless into its business, saying they even train their A&R people that find talent about new media products. Does this mean they’re signing bands because they think they’d make a great ringtone? Apparently when Green Day was in the studio recording their last record, their producer also produced ringtones from the album. I’m not convinced a truetone is of high enough fidelity that anybody would really care.

- Bronfman’s main belief really seems to be that mobile will be great for him because it offers a closed network, from browsing to delivery. (Remember, Bronfman is the guy that argued big corporations, like his, should control the Internet, and how dangerous it is that people can be anonymous online.)

Bronfman was followed up by Real CEO Rob Glaser, who gave a pretty uninspiring demo of some of his company’s mobile products. For a company that was such an early dominant force in online multimedia, it’s interesting to see how little it’s used in mobile, regardless of how long Real says it’s been involved. As an aside, it’s Coding Technologies’ aacPlus that’s becoming the standard for audio.

What I took away from Glaser’s keynote was that he’s selling the company’s Rhapsody subscription service hard, maybe too hard. He talked about how users have access to a “jukebox in the sky”, but with Rhapsody, they don’t, they’re still stuck syncing up to a PC whenever they want new music. There are plenty of smaller competitors, though, that actually make use of a phone’s network connection.

But Glaser’s also a believer in the “people will pay for anything on a phone” mantra, which simply isn’t true. Adding mobility to a service doesn’t automatically dictate a premium price. He mentioned things like IM and email that people expect for free on the Internet and said they’re premiums on mobile phones. That may be true, but those services are quickly becoming commodities just like voice. Mobility doesn’t dictate an inherent premium, people still need value. And being able to do something “on the go” doesn’t always add much value.

Glaser also tried to talk up Real’s silly Breaks and Beats freestyle rap service, showing a “spontaneous” video of four kids using it to rap. I’m not exactly down with the kids these days, but I really don’t imagine too many of them “spontaneously” find themselves in office conference rooms rapping with a video camera going.

It was interesting meeting with Amp’d yesterday, then having a chat with another MVNO that will be launching soon, SK Earthlink. The two are targeting the same age group (roughly 18- to 30-year-olds), but whereas Amp’d sees itself as an entertainment company, SK Earthlink is all about the technology.

The SK in the company’s name (which won’t be the brand under which it offers service, by the way) comes from Korea’s SK Telecom, and SKE will leverage its technology for all it’s worth: the service and billing platform that makes everything happen, advanced content and services, and of course, the handsets. SKE isn’t like a lot of MVNOs that work through an enabler company and offer basic services at cut-rate prices. It’s targeting people that are willing to pay for data services, and in return, they’ll get an experience the company bills as unlike anything any other carrier in the US offers. It won’t offer low-end phones that presumably wouldn’t be able to handle the advanced services and content it’s promising to deliver.

The company is keeping a pretty low profile and is still speaking in generalities rather than specifics about particular handsets or features before its launch next Spring. But, like Amp’d, they’re saying all the right things, and it’s hard not to believe they won’t come up with something cool. They’re planning to doggedly attack their niche market with a differentiated approach and proposition that should resonate well. Watching these companies come to market is like MVNO version 2.0, bigger and better than just basic service cheaper than your usual MegaCarrier. They’re taking their network providers’ pipes and really using them to their full potential, unburdened by legacy brands and services, but most importantly, not encumbered by telco thinking.

Korea’s leading operator, SK Telecom, has launched what it claims to be the world’s first location based dating service, based on an operator’s LBS system. It’s powered by WaveMarket, for the LBS element and Psynet, who provided the dating platform.

There have been plenty of forays before into MoSoSo (Mobile Social Software) based on Bluetooth, ranging from Nokia’s Sensor (no, they haven’t gone into the razor blade market) to MobiLuck, that I wrote about yesterday.

The problem with Bluetooth systems is the very limited range means that until real critical mass is achieved, any contact with another device is going to be a rare event. And certainly when you start applying a degree of matching profiles on top of location, you may be in for a very long wait to meet Mr or Mrs Right, or even Mr or Mrs SoSo (no, not another mobile acronym).

There’s a further issue that often gets forgotten with short range systems, and that’s time. The chances of finding another phone, with a matching profile at the same time is statistically very unlikely, certainly at the beginning. And why would users sign up for something, or recommend that their friends join, if nothing happens when they do?

An operator’s LBS system doesn’t have the same restrictions and can pair people within the same, say square mile - a distance that can be covered pretty quickly with the right incentive. This means the chances of a successful match increases exponentially.

Admittedly, there’s a few downsides to the operator-led approach. Firstly, there’s the accuracy question. Even if Assisted GPS is used (the most accurate I’m aware of) this is unlikely to let you make contact with someone in the same bar. If you’re out of line-of-site of a satellite, the system falls back onto a less accurate technology like triangulation or cell ID, which is not good enough to pinpoint two phones in the same room. If you know more about the tech, please leave a comment as I’m sure someone knows more than I do about this aspect.

So from that point of view, it seems that the perfect dating application would be based on a hybrid of Assisted GPS and Bluetooth, for shorter distances.

The other problem with some LBS systems is speed. You’re not going to want to wait 10 minutes or so to find a match - we’re living in a broadband world and that means we want things now.

Perhaps inevitably, the press release touts “killer app”, which seems something of an exaggeration - voice is the only killer app of phones for the foreseeable future. But it does have all the hallmarks of being an important sector - youth, sex, communication based, local and I’m sure it’ll do very well.

Just one question; why oh why do SK Telecom think it’s a good idea to have an annoying sound track playing on their website? Hasn’t anyone told them how annoying it is - and soooo last century Darlink? Or is it a bit like BO - everyone’s too embarrassed to say something?

Some bits and pieces from the first day:

- Had a chat with the head of Rocket Mobile, a company that mainly does BREW development of both applications that get embedded in OEM devices, but also a number of consumer apps. The company’s a good example of how a platform-centric viewpoint can be beneficial: its embedded applications become a platform on which it creates consumer applications. Instead of just having its applications be the end of the story, they’re a jumping off point for even more.

- Sprint’s got a couple of new business devices, a Windows Mobile phone for Nextel and the EV-DO Pocket PC PPC-6700 (pictured here). If you’re into Pocket PC, it’s a nifty little device, although a little on the thick side.

- Schwagwatch: nothing of note, although USB memory sticks are still undeniably the giveaway of choice.

- Overheard: “I wonder if it bugs the bags of all the people around you,” after noticing the attendee bags were sponsored by the infamous sms.ac.

I feel it’s pretty safe to say that Amp’d is going to be an incredibly disruptive (or destructive, depending on where you stand) force on the US mobile scene. Their general strategy seems to be “Okay, so everything every incumbent carrier does? Yeah, we’re doing the opposite of that.”

So it’s EV-DO phones (from Kyocera and Motorola at launch, which sounds like it will be towards the end of the fourth quarter) without the usual restrictions: open Internet, tethering (supporting both PC and AC), sideloading of content actively supported (”We don’t care where you get your music,” they say), and a consumer-driven mindset that sees it be as agnostic as possible. Whereas some CDMA carriers hamstring devices and close down their networks, Amp’d’s thinking is that if the phone supports it, go ahead and do it.

And that doesn’t even consider the content. As appealing as Amp’d is in general, its library of content sounds pretty staggering as well. Its target market is 18- to 35-year-olds, and the stuff it’s got lined up should be wide and deep enough to satisfy the whole range: lots of video (streaming and download), music, tons of games and so on. The phone ships as a blank slate, essentially, and users set it up via the Amp’d Web site to make it appear exactly as they want. Amp’d also has a pretty slick UI for its content portal that organizes things in a much more intuitive way than the usual list-based carrier deck. Amp’d thinks of itself as an entertainment company more than a telco, and it shows.

One of the most telling quotes from the company’s rep was “We don’t want to ask people to change the way they do things.” And they don’t. Like I said, that’s pretty much the opposite of most carriers.

I had a meeting this morning with some people from the Open Mobile Alliance, who were, um, kind enough to add the chair of their DRM working group to the meeting (without my knowledge, although I didn’t really mind), to address my fairly strong feelings about it. OMA’s in an interesting position on this and a lot of matters in the mobile industry. The group was essentially born out of the realization by vendors and carriers that they needed to work together to ensure interoperability of services — “The industry has gone through a tough school and learned its lesson,” as chair Jari Alvinen put it.

They made the case for their unified, open DRM standard, and were quick to draw a distinction between actual DRM and simple copy protection, since the two aren’t necessarily the same. While the OMA DRM spec does include copy protection (so you can’t forward a ringtone to your friend, for instance), it also features some actual DRM that enables some new business models and revenue streams. For instance, it’s got a mechanism that allows users to pass content on to others, who can then preview it and decide to pay for it if they want to keep it, and it’s even got “reward” functionality to encourage people to pass around content in this way. It also allows people to define “domains” of devices to which they can assign the same rights, so if you buy a song on your phone, you could also play it on your computer or on your home stereo and so on.

I’m still not sure what to make of this. While clearly the spec does allow for some new business models, why does it take an OMA DRM standard, rather than some innovation from record labels or some other content provider, to come up with them? It also still doesn’t address copy protection being used as lock-in by vendors. It’s true that the OMA DRM spec is open and can be licensed by anyone (the group’s IP policy dictates all its specs’ underlying technology be made available on a RAND basis), but is that any different that Microsoft licensing its Janus DRM to anybody that ponies up the cash? The idea of a unified DRM across all devices is a decent one — if it were a reality. And while OMA DRM will no doubt fall into favor simply because of the high volume of handsets sold a year, it’s still up to individual device manufacturers to license the different DRMs and integrate them into their devices if they care about interoperability. While the number of major DRM technologies may have declined in recent years to 3 (MS, Apple/Fairplay, OMA), that’s still too many when it’s used not as DRM, but as a tool to lock people in to certain brands.

I appreciate the work OMA’s done to make the DRM useful to content providers and to consumers by enabling new businesses. But is it just a case of adding sugar to the medicine to make it go down easier? I hope not. They seem to have a good idea of what they’re doing and the impact it will have on consumers (both negative and positive) and also that they’re working in a communications medium, not a broadcast one — a point they made explicitly, and one that’s lost on a lot of companies. A unified standard, properly implemented, would be an improvement over the current situation. But when the point of DRM and copy protection often isn’t to manage digital rights, but to lock people in to certain products, it’s hard to believe that it’s coming any time soon.

O2 announced last year that they were launching NTT DoCoMo’s highly successful i-mode in the UK (as well as Germany and Ireland) and recently declared this Saturday (October 1st) as launch day.

However, it wasn’t too clear exactly what their plans are until now, vis a vis the existing O2 Active brand and 4.2 million customer base. The implication so far has been that they’d sort of slide i-mode into the market and see what kind of uptake it would get.

But according to the International Herald Tribune today, O2 are backing the launch with a ¬£20 million ($35 million) advertising and marketing campaign. Make no mistake, this is a very, very large campaign in European terms. And historically, this is O2’s largest since the demerger from BT in 2001, according to Russ Shaw, their Marketing Director.

This indicates to me that O2 are viewing i-mode as a a key strategic part of their business and actually more important than O2 Active in the longer term. In fact, I think they see it as a way to leapfrog the leading brand, Vodafone’s Live!, altogether.

This would also imply that they’re going to aggressively encourage O2 Active users to trade up to i-mode in the immediate future.

i-mode is meant to deliver what WAP promised 5 years ago - the internet of your phone. Initially, O2 have bundled about 100 leading sites on there and enabled it with email. What’s more, they have announced the best rev share arrangements with content owners outside the Far East - an unprecedented 86%.

On the downside of the launch, email is expected to be charged at 10p (17c) each - presumably so as not to cannibalise sms traffic. And net access is expected to be ¬£3 ($5.30) per MB, equivalent to 100 pages. This seems a shame to me, as surely this would be a great opportunity to launch an “all you can eat”, really simple data plan and really stick it to the competition. Surely, one reason that’s holding back data is that people want to avoid Bill Shock syndrome?

Saturday will reveal all, including their pricing. But, every journey starts with a small step and O2 seem to have made several big strides from what we know so far.