Mobile E-mail For The Masses

Gadget makers want in on the BlackBerry's success, but the smart money is on e-mail for cellphones

When longtime rivals Microsoft and Palm announced in late September that they were joining forces to bring to market a Windows-powered Treo smart phone, it raised a few eyebrows–after all, Palm's early cachet was as an anti-Microsoft. But it hardly sent shock waves through the mobile-device industry. The deal makes good sense for both companies, since combining Palm's proven hardware design and Microsoft's ubiquitous software should forge a stronger claim on the mobile wireless device market than either company had managed separately. (And on Oct. 17, Palm announced it would be using BlackBerry device manufacturer Research In Motion's wireless software with future smart-phone products.) But there isn't much more to the Treo announcement than that: another iteration of a powerful mobile phone/e-mail device for high-end users. The market is growing crowded.

Sure, the Treo line of devices is the most successful smart phone in North America, with sales of some 2.1 million units since being introduced four years ago by Handspring (acquired by Palm in 2003). A Windows version may help Palm sell more. It is RIM's BlackBerry, of course, that commands the lion's share of the market, with 3.65 million BlackBerry users as of the end of August. The glorified e-mail pager has ended up with pop-culture buzz surpassed in volume only by the iPod. The lesson is that even the most well-designed gadget needs the right application to make it a hit. The iPod is backed up by the online iTunes music store; RIM's killer app is BlackBerry's always-on “push” e-mail service that pushes e-mail from corporate inboxes to devices.

By licensing RIM's wireless e-mail software to its smart-phone devices, Palm may yet cash in on the BlackBerry's success. But if the BlackBerry success story reveals an intriguing business opportunity, it's probably not just that selling high-priced, powerful mobile devices is profitable. Rather, it's that mobile e-mail is a great application, and possibly one with broader market potential.

Nokia certainly thinks so. In mid-September, it launched the Nokia Business Center, a server that sits behind corporate firewalls and connects employees' mobile devices with a suite of business applications, including, most importantly, push e-mail. Nokia's strategy is to make it economically viable to provide e-mail to the corporate masses. And instead of using a licensing model that requires companies to pay for each employee on the service, for a one-time fee of US$2,200 Nokia is offering unlimited access to a “standard” service, which pushes e-mail and lets users compose and reply to messages–but that's it. Only the professional version will include all the usual functions of corporate e-mail, such as address books.

It's a unique approach, especially because Nokia intends to let any Java-compatible phone work with the service, even those made by competitors. Even low-level employees could access e-mail on rather basic cellphones. Nokia figures there's huge market opportunity out there: some 650 million corporate e-mail accounts exist, and some 150 million of those can be categorized as belonging to “mobile workers”–but only a few million have been mobilized on devices. What better way to mobilize the rest than through cellphones, which billions of people already own?

A smaller Canadian company is taking a similar approach with personal e-mail. Oz Communications, based in Montreal, announced Oct. 20 a deal that will bring MSN Hotmail, Yahoo and AOL e-mail–a total of 287 million accounts in North America–to Cingular phones, a cellular carrier with more than 50 million subscribers. The service is basic, but Oz figures mobile phone users might appreciate access to their personal inbox, and it's a way to encourage people to use wireless data beyond text messaging.

So will mobile e-mail become a gravy train for more companies than RIM? Quite possibly. Extending mobile e-mail access to nearly everyone with a cellphone could send bigger shock waves through the wireless industry than any shiny new gadget.