Bob Peale
angeli ribelli
- Joined
- Sep 4, 1999
- Posts
- 10,535
Disposable cell phones are ringing
Reuters
July 29, 2002, 4:48 AM PT
URL: http://zdnet.com.com/2100-1103-946879.html
NEW YORK--Throwaway cellphones are set to make their debut on U.S. convenience store shelves, down the aisle from plastic razors, beef jerky and disposable cameras they seek to emulate as spur-of-the-moment consumer purchases.
Hop-On, a small company based in Garden Grove, California, said this week it had won U.S. regulatory approval to sell its first phones, clearing the way for a nationwide introduction of a no-frills recyclable phone for prepaid mobile calling.
In an interview, Chairman and Chief Executive Peter Michaels said approval of the phones will allow Hop-On shortly to sell its stripped-down mobile phone and 60 minutes of initial service for a $40 flat fee, through an unnamed "major CDMA" carrier.
"We are going to launch pretty much immediately," starting first in Southern California and then rolling out across the United States over the next three months, Michaels said.
"I don't want to sound like a crazy person, but as many phones as I can build I can sell," Michaels said, adding that Hop-On's goal was to sell millions of phones by Christmas.
Hop-On mobile devices are plastic, two-way phones the size of a deck of playing cards. Users talk and listen to callers via a microphone/earpiece connected by a thin wire. Customers buy scratch cards in increments of additional talk time of 60, 90 and 120 minutes, according to company officials.
Hop-On, which hopes to sell the phones at major retailers, corner stores and gas stations, said it received a go-ahead from the U.S. Federal Communications Commission for phones with a low-cost chipset from Philips Electronics based on Qualcomm Inc. technology.
Michaels also hopes to win the FCC's blessing in 45 to 60 days for a second, less-expensive model that would be priced at $29. This is based on the international GSM mobile standard. It would be aimed at Europe and eventually the United States.
In talks with 20 companies
The company also said it is in talks with as many as 30 major retailers and other companies to distribute the phones, including convenience stores, gas station chains and big retail chains. Consumer brands, including a major beer company, are looking at licensing Hop-On phones and selling them under their own brand names as promotional items, Michaels said.
"Our (business) model is that we are basically giving you a very inexpensive phone for which you can buy additional minutes of air time," Michaels said.
Hop-On is wooing partners with the potential the phones may have to drive new customer traffic into stores--consumers who might pick up a phone for emergencies, for fun, or because they cannot otherwise afford to commit to pay for a mobile phone.
Imagine busy people on the road who forget their regular mobile phone at home that day or families of tourists in theme parks or tech-fearing seniors who want the security of a phone without the on-going cost of a monthly bill.
The aim is to fill the gap left by established phone makers and wireless network operators who fear that selling low-cost phones and services will further undermine the $50-$55 that the average U.S. mobile user spends per month, analysts said.
Hop-On phones could also create more vigorous competition at the low-end of the prepaid mobile phone market, where cost-sensitive customers pay upfront for minutes of use instead of signing up for an ongoing monthly subscription to services.
Still, retail, mobile phone and financial analysts are mostly taking a show-me-the-money stance toward Hop-On.
"The pieces of the strategy seem to make some sense, but I just wonder what's going to make people reach for this phone rather than a more conventional prepaid phone?" said Steve Baker, a retail technology analyst for research firm NPD.
Stripped-down models
Hop-On phones are stripped down and designed to be as cheap as possible. Phone numbers are assigned locally. Calls made within the same area code are local, but calling between area codes would involve paying additional toll charges.
By offering a $5 rebate to customers who want to dispose of their phones, Hop-On hopes to recycle used devices to new customers, saving on additional manufacturing costs and in effect, borrowing the strategy of disposable camera makers, which recycle cameras four to five times in new packaging.
"The cheaper the better when you are talking about this market," said Mike Doherty, a wireless analyst with market research firm Ovum in Boston.
Hop-On plans to cut costs by doing away with extra memory needed for advanced data features, focusing only on what is needed to place and receive voice calls. Also out are liquid crystal displays (LCDs) found on more expensive phones. Instead, phones offer an audio playback for any number dialed.
Michaels declined to identify by name the CDMA network carrier it is working with, saying that an announcement would take place within two weeks. Verizon Wireless and Sprint PCS are the two major U.S. carriers with CDMA networks.
Hop-On, which employs just 15 people, plans to rely on contract manufacturers operating in China, Taiwan and Mexico to supply it with low-cost phones.
The combination low-cost phone and discount minutes strategy is aimed to compete not so much in traditional mobile markets as with discount calling cards, according to Michaels.
Cheeseburgers, cell phones and fries
"In order to be successful they need to go after a different market than traditional prepaid," said Gartner Dataquest analyst Paul Vittner, who has been tracking the emerging disposable phone market since he released a report entitled, "Cheeseburgers, Cellphones and Fries" two years ago.
Vittner, who has been briefed on Hop-On's strategy, said the challenge will be to make disposable phones that are not so cheap they are no longer a real phone. The company must also negotiate with wireless carriers to buy wireless access in bulk at prices low enough that it can still turn a profit, he said.
Remember how silly disposable cameras once seemed?
"When they first came out, most people thought, 'Ah, why would I want a disposable camera? That changed rather quickly" when consumers discovered new uses for them, said Michaels.
Reuters
July 29, 2002, 4:48 AM PT
URL: http://zdnet.com.com/2100-1103-946879.html
NEW YORK--Throwaway cellphones are set to make their debut on U.S. convenience store shelves, down the aisle from plastic razors, beef jerky and disposable cameras they seek to emulate as spur-of-the-moment consumer purchases.
Hop-On, a small company based in Garden Grove, California, said this week it had won U.S. regulatory approval to sell its first phones, clearing the way for a nationwide introduction of a no-frills recyclable phone for prepaid mobile calling.
In an interview, Chairman and Chief Executive Peter Michaels said approval of the phones will allow Hop-On shortly to sell its stripped-down mobile phone and 60 minutes of initial service for a $40 flat fee, through an unnamed "major CDMA" carrier.
"We are going to launch pretty much immediately," starting first in Southern California and then rolling out across the United States over the next three months, Michaels said.
"I don't want to sound like a crazy person, but as many phones as I can build I can sell," Michaels said, adding that Hop-On's goal was to sell millions of phones by Christmas.
Hop-On mobile devices are plastic, two-way phones the size of a deck of playing cards. Users talk and listen to callers via a microphone/earpiece connected by a thin wire. Customers buy scratch cards in increments of additional talk time of 60, 90 and 120 minutes, according to company officials.
Hop-On, which hopes to sell the phones at major retailers, corner stores and gas stations, said it received a go-ahead from the U.S. Federal Communications Commission for phones with a low-cost chipset from Philips Electronics based on Qualcomm Inc. technology.
Michaels also hopes to win the FCC's blessing in 45 to 60 days for a second, less-expensive model that would be priced at $29. This is based on the international GSM mobile standard. It would be aimed at Europe and eventually the United States.
In talks with 20 companies
The company also said it is in talks with as many as 30 major retailers and other companies to distribute the phones, including convenience stores, gas station chains and big retail chains. Consumer brands, including a major beer company, are looking at licensing Hop-On phones and selling them under their own brand names as promotional items, Michaels said.
"Our (business) model is that we are basically giving you a very inexpensive phone for which you can buy additional minutes of air time," Michaels said.
Hop-On is wooing partners with the potential the phones may have to drive new customer traffic into stores--consumers who might pick up a phone for emergencies, for fun, or because they cannot otherwise afford to commit to pay for a mobile phone.
Imagine busy people on the road who forget their regular mobile phone at home that day or families of tourists in theme parks or tech-fearing seniors who want the security of a phone without the on-going cost of a monthly bill.
The aim is to fill the gap left by established phone makers and wireless network operators who fear that selling low-cost phones and services will further undermine the $50-$55 that the average U.S. mobile user spends per month, analysts said.
Hop-On phones could also create more vigorous competition at the low-end of the prepaid mobile phone market, where cost-sensitive customers pay upfront for minutes of use instead of signing up for an ongoing monthly subscription to services.
Still, retail, mobile phone and financial analysts are mostly taking a show-me-the-money stance toward Hop-On.
"The pieces of the strategy seem to make some sense, but I just wonder what's going to make people reach for this phone rather than a more conventional prepaid phone?" said Steve Baker, a retail technology analyst for research firm NPD.
Stripped-down models
Hop-On phones are stripped down and designed to be as cheap as possible. Phone numbers are assigned locally. Calls made within the same area code are local, but calling between area codes would involve paying additional toll charges.
By offering a $5 rebate to customers who want to dispose of their phones, Hop-On hopes to recycle used devices to new customers, saving on additional manufacturing costs and in effect, borrowing the strategy of disposable camera makers, which recycle cameras four to five times in new packaging.
"The cheaper the better when you are talking about this market," said Mike Doherty, a wireless analyst with market research firm Ovum in Boston.
Hop-On plans to cut costs by doing away with extra memory needed for advanced data features, focusing only on what is needed to place and receive voice calls. Also out are liquid crystal displays (LCDs) found on more expensive phones. Instead, phones offer an audio playback for any number dialed.
Michaels declined to identify by name the CDMA network carrier it is working with, saying that an announcement would take place within two weeks. Verizon Wireless and Sprint PCS are the two major U.S. carriers with CDMA networks.
Hop-On, which employs just 15 people, plans to rely on contract manufacturers operating in China, Taiwan and Mexico to supply it with low-cost phones.
The combination low-cost phone and discount minutes strategy is aimed to compete not so much in traditional mobile markets as with discount calling cards, according to Michaels.
Cheeseburgers, cell phones and fries
"In order to be successful they need to go after a different market than traditional prepaid," said Gartner Dataquest analyst Paul Vittner, who has been tracking the emerging disposable phone market since he released a report entitled, "Cheeseburgers, Cellphones and Fries" two years ago.
Vittner, who has been briefed on Hop-On's strategy, said the challenge will be to make disposable phones that are not so cheap they are no longer a real phone. The company must also negotiate with wireless carriers to buy wireless access in bulk at prices low enough that it can still turn a profit, he said.
Remember how silly disposable cameras once seemed?
"When they first came out, most people thought, 'Ah, why would I want a disposable camera? That changed rather quickly" when consumers discovered new uses for them, said Michaels.
