Another nail in the coffin of mobile video

From TelecomTV today:

Motorola has abandoned the race to be first to market with advanced phones, according to mobile handset division head Ron Garriques. “Do I really want to launch a WCDMA phone with a Qualcomm chip that drives up my bill of materials by $40, but which I can’t sell for a higher price, and give up my profit margin?” he asked Reuters. Garriques says consumers simply aren’t interested in paying more for 3G handsets because most subscribers don’t find next-generation services worth the price.

Exactly as I’ve been saying. Americans don’t view the phone as an entertainment device. In fact, as Motorola has happily learned, the mobile phone is more of a fashion accessory. Every time someone whips out a RAZR I am embarassed by my lumpy gray Samsung A890. Sure it’s V Cast capable. Big deal. I dumped V Cast after the free trial period ended. Now I’m stuck with this clunky thing.

Now the likes of MobiTV are totally screwed. If Motorola has decided to forego $40 on the COGS of every phone sold, others will have to seriously consider the same. Just imagine being at the Cingular store. If a RAZR actually costs less than some blobby LG, what do you think Mr. Executive, Mrs. Soccer Mom, and little teeny boppers will choose?

Of course MobiTV still has its fans like Fast Company, the magazine that never met a potential advertiser it didn’t hype. MobiTV’s founder clocks in at number 8 on the Fast 50. Wow. I’d hate to have money tied up in the ventures of the 42 taking up the rear. This might be my favorite bit of tech journalism in a while.

The founder and CEO of MobiTV admits that “it was more difficult than anticipated” to roll out a service to put TV on cell phones. “They could smell the Silicon Valley on us.” But two years later, Phillip Alvelda, a NASA and MIT vet, has more than 500,000 subscribers paying $9.95 a month for real-time TV from NBC, ABC News, ESPN, Discovery Channel, and TLC, among others. He has his naysayers, but we figure that with 200 million U.S. cell phones and 2 billion worldwide, how far wrong can he go?

Cue the laugh track. Let’s not forget that at this time last year MoribundTV was boasting of 400,000 subscribers. So at the rate of 100,000 subscribers per year, we’re looking at 195 years before MobiTV gets 10% share of the US market. Since MobiTV doesn’t share its churn rate, I’m thinking the real number’s closer to never.

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