Wall Street Journal – Don Clark
Qualcomm Inc. is trying a new strategy to jump-start the nascent market for mobile pay TV-going direct to the consumer.
The chip maker’s FLO TV subsidiary operates a U.S. network to broadcast TV programming to portable devices. Up to now the service has been available on specially equipped cellphones from AT&T Inc. and Verizon Wireless, adding around $15 to users’ cellphone bills. Late Tuesday, however, Qualcomm announced plans for its own pocket-sized device that is strictly for watching TV on the go.
FLO TV Personal Television, as the product is called, is expected to be offered by retailers this holiday season at a suggested price of $249.99. Qualcomm also will offer its own programming service, with packages expected to cost $5 to $15 a month.
The new effort is likely to run into skepticism, in view of the adoption rate for subscription mobile TV so far and competition. MobiTV Inc., a company based in Emeryville, Calif., has been offering a service that uses conventional cellphones.
John Fletcher, an analyst at the market-research firm SNL Kagan, estimates MobiTV subscribers will reach seven million this year, or about 2% of all U.S. cellphone users. He estimates FLO will have about 350,000 users, or a fraction of a percent.
Mr. Fletcher notes that Americans have tended to shy away from buying conventional portable TVs, which have the advantage of free content over FLO’s paid offering.
But Bill Stone, FLO TV’s president, says it offers an array of content that is available on cable TV but not over-the-air broadcasts. A bigger hurdle, he argues, is that people simply aren’t aware of its offerings. By going direct to the consumer, FLO TV has “a lot more control over our destiny and our messaging,” Mr. Stone said.
One advantage for a dedicated device is that TVs tend to be a shared resource where cellphones are seen as personal, Mr. Stone added. Parents and kids, might hand a TV back and forth as different kinds of shows air, he said.
Qualcomm, though now known for chips, has had forays in hardware before. The San Diego-based company offered its own cellphones early in its history. Last November, Qualcomm announced that it had developed a design for a home computing device that uses its cellphone chips rather than PC components.
Qualcomm said the new Personal Television device has a touch-screen display that measures 3.5 inches diagonally and weighs just over five ounces.
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