Following on from last week's article about Motorola poaching David Beckham, who was once the face of Vodafone, I was interested to see that HTC, the leader in European Operator branded handsets (MDA, XDA, etc...) is now considering a move into direct branded sales in Europe. This further suggests a shift in the power of the businesses in the mobile operator space. I would suggest that the food chain may rapidly shift to become:

1. Distributor/MVNO - we can already see Carphone Warehouse in the UK stretching it's muscles with an offer of free broadband for everyone who signs up to their mobile service. It's certainly not a cross-the-board pheonomenom, with Dixons looking to sell their retailer to UK, but combined with the growth of MVNOs from mega brands like Disney suggests that the initial contract may shift away from Operatros to third parties.

2. Handset manufacturers - we've already noted Nokia's huge brand appeal and the growth of Motorola, and clearly the consumer percpetion of device manufacturers is better than that of operators, even though it is often the device manufacturers who cause the quality problems that can plague mobile services.

3. Network Operator - unfortunately network operators may end up at the bottom of this triumvurate. Although they will always take the lion's share of the revenue, simply because running a large network is expensive, in failing to capture the consumer's imagination they will sink lower in the value chain and subsequently lower their profits as a percentage of revenues.

It's a grim future, but when Operators have gone from saying "The Future's Bright, The Future's Orange" to "Free Broadband", then it's clear that they are losing any value that their brand might have previously given them.

Original Source: Mobile Strategies