The Price of Freedom
Wednesday, April 15th, 2009
By Ross Rubin, Executive Director, NPD Connected Intelligence
In his last post, my colleague Steve Baker touched on some of the few shining stars in the dark void that the technology marketplace has been in 2009. If the sun comes up in 2010, though, consumers will begin to find cable and wireless networks more open to access devices at retail than ever.
At the recent CTIA wireless trade show in Las Vegas, several of the nation’s top carriers reaffirmed their commitment to support devices beyond the smartphone, with AT&T claiming that any CE device that didn’t have at least Wi-Fi next year would be at a severe disadvantage in the marketplace. However, the carrier is also willing to compete in at least one traditional retail category, and rolled out its plans to offer subsidized netbooks in its stores to consumers who sign up for data contracts. Sprint and Clearwire rolled out their 2009 and 2010 national deployment plans for Clear, the WiMax service that features unsubsidized devices intended to be sold at retail. And Verizon discussed its Open Development Initiative to allow the embedding of its network connectivity into devices far beyond its handset portfolio.
Meanwhile at the concurrent NCTA cable trade show in Washington, D.C., the industry took further steps toward adoption of Tru2Way, the highly touted successor to CableCARD that promises to finally provide direct connectivity to televisions and AV devices from consumer electronics companies. Tru2Way televisions are currently being used in trials in a few U.S. cites; greater availability should come in 2010.
Faster and more versatile wireline and wireless connectivity could do much to transform the nature of even mature consumer electronics categories, but unsubsidized devices will face tough competition as service providers continue to cater to the mass market with low-cost or free subsidized devices. Examples abound. While smartphones offer the ability to install applications that aren’t pre-approved by the carrier, unlocked smartphones sold at retail can easily cost more than $500 and remain a limited opportunity stateside. While the Amazon Kindle has done well in its niche, Amazon has been able to completely subsidize the cost of wireless service because the device sips data and locks in users. The recently released Moxi DVR from Digeo that uses CableCARD forgoes monthly fees, but costs $799, not including a satellite unit that will allow multi-room viewing.
A loosening of purse strings in 2010 could certainly bode well for advanced technology products, but manufacturers and retailers will need to work hard to earn sales of new and enhanced categories of devices that offer tantalizing connectivity, albeit at a dizzying premium above the service provider baseline.
Tags: CTIA, NCTA, open networks, subsidization, Tru2Way
Consumer Technology, Wireless | Ross Rubin, Executive Director, NPD Connected Intelligence | 
April 15, 2009 9:43 am
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