Weird is the new normal in cellular

Has the mobile industry just gone through some sort of reality warp‾

If last week's news is any indication, cellular is at a very weird stage.

Here's a sample of just some of the items that landed last week:

Mobile operator Orange UK goes into the fixed-line business.

Qualcomm decides to make DVB-H chips to compete against its own FLO technology.

LG launches a white chocolate phone.

Vodafone writes down as much as $49 billion dollars of market capitalization.

OK, some of these are more important than others, but they all point to new and frankly disconcerting directions for the industry.

Taking them in reverse order: The goodwill write-off is stunning because of its size. It is a hangover from Vod's controversial acquisition of Mannesmann - the world's biggest ever takeover - five years ago.

But it is also about the world's largest cellco cleaning up its balance sheet to prepare for testing times ahead.

The company has trimmed its revenue growth forecast from 5%-6.5% in '07, compared with 6%-9% in '06. As goes Vodafone, so goes the mobile industry. 

You may not have heard of the chocolate phone concept, but be assured it's a smash, at least in Korea.

The white chocolate phone is LG's follow-up to the dark chocolate model, which sold 300,000 units in its first three months. (Lee Ki Tae, president of Samsung Telecom, reportedly threw a tantrum - and a phone - over the fact that his team had allowed a chocolate phone gap to open up between them and LG.)

Lifestyle statement

The point is that phone marketing is becoming less about the utility of the handset, and more about the device as a lifestyle statement. The choc-phone keypad is scented lavender, for heaven's sake.

Now it's routine for tech companies to hedge their bets. But Convergence is still surprised by Qualcomm's planned move into the DVB-H space. 


Qualcomm is not known for its love of non-Qualcomm technology, and DVB-H has pretty much zero Qualcomm IPR.

Meanwhile the San Diego vendor is investing $800 million on its MediaFLO business, building out a dedicated mobile TV network coast-to-coast across the US.

The vote of confidence in a non-Qualcomm technology is acknowledgment that, in Europe at least, DVB-H is the mobile TV standard most likely.

It also underlines just how important TV is to the future of mobile. 

Fixed-line might also be essential to the future of mobile. Orange's entry into wireline will provide a useful test of that.

It's certainly counter-intuitive; to date convergence has supposedly been about fixed-line integrating with wireless. Broadband and VoIP are changing the pricing equation, however, making voice virtually a free extra app. 

With the arrival of HSDPA, and the spread of voice over Wi-Fi, wireless will inevitably go the same way - right‾ If it does, Orange will be ahead of the curve.

For now, though, Orange is going after just enterprise customers, targeting the often-overlooked SMEs with prices below the established operators.

If that works watch it spread.

In the meantime, weird has become the new normal in cellular.