Way back in the early oughts when we all thought MVNOs would change the wireless world here in the US, one question we faced was the sheer number of mobile phones people had. “Hey, 75% of people already have cellphones; how are new operators going to build scale when nearly everyone has a phone?”
And the answer was plain to me as I looked around our house. “Hey,” I said to our team. “We have six CD players. Some day we’ll all have six phones, too.”
The MVNO market didn’t take off like we’d hoped, but, as I’ve pointed out a few times recently, wireless wholesale is far from dead. In today’s Wall Street Journal, Sprint discusses its focus on embedded wireless data (”Sprint Looks To Power Gadgets Beyond Cellphones“).
Sprint is the data service behind the Amazon Kindle, as many know, and they’re looking to land more of those types of customers. The Journal article mentions GPS maker Garmin, SanDisk and Kodak as possible integrators of always-on wireless data services.
Customers of Garmin, SanDisk, etc., are strategic because they are net new customers to wireless–in other words, they are like I was when I bought my second (PC), third (another PC), fourth (clock radio) CD players. They don’t have to be lured from a competitive service.
And the article points out that wholesale accounts, while lower in revenue, are very profitable for Sprint:
Analysts say wireless wholesaling generates lower revenue than retail sales but carriers can hold down costs and maintain good profit margins. “They don’t have to bear costs like customer acquisition, billing or customer service,” said Jim Andrew, a wireless industry consultant.
Almost every review of the new Kindle I’ve read mentions its ability to wirelessly download books anytime, anyplace. That feature doesn’t exist without a ubiquitous wireless network. I’m ready, and the market’s ready, for more connected devices like the Kindle.