Operator aims to double non SMS mobile data revenue by 2012; talks OS strategy.
Orange on Wednesday revealed plans to launch an LG-made low-cost Android smartphone in Europe later this year.

Details have been emerging this week about the operator’s affordable smartphone strategy, which includes a range of devices made by Chinese vendors including Huawei, ZTE and Gigabyte.

“At the beginning of 2010 15% of our portfolio was smartphones. This will rise to 30% by the end of the year, and will be 50% by 2013,” said Patrick Remy, Orange’s vice president of devices.

As well as the plethora of white label devices in the pipeline, Remy told Total Telecom that Orange’s low-cost smartphone portfolio will also include handsets designed by “A-brand” phone makers.

“We are working with LG on the first A-brand product in our affordable smartphone range,” he said, although he was unable to disclose specific information about the launch timetable and likely cost of the device.

Still, Remy was able to demonstrate the Boston – an Android-powered smartphone made by Gigabyte – launching soon in Spain, Austria, Slovakia and Romania. The handset includes what have become standard smartphone features, including a touchscreen interface, WiFi, GPS, full Web-browsing, and a five megapixel camera.

“We’re not compromising on the smartphone experience,” said Remy.

He said Orange’s objective is to make low-cost smartphones available for free even on low-cost tariffs. So in Spain for instance, the Boston will be free on a €20 monthly price plan that includes 100 Megabytes of data use.

The company is also in discussions that could see it offer cheap smartphones to prepay customers, with devices like the Boston priced around €120, said Remy. “This is around half the price of the smartphones currently in our portfolio.”

Cheap smartphones hold the key to Orange’s aim of doubling revenues from mobile multimedia services between now and 2012, said Remy.

“Smartphones are still relatively expensive, and not everybody can afford the high tariff plans where you get a smartphone for free,” he said.

At the beginning of 2009 only one in 10 Orange customers was using mobile multimedia services, and so the operator put extra focus on highlighting services like mobile social networking, instant messaging, location-based services and content, said Remy. Orange also tweaked its tariff plans to lower the barrier to entry, he said.

“25% of our customers are now using mobile multimedia, which is significant and tremendous growth, but it still means 75% of our customer base are not multimedia users,” he said.

Orange’s affordable smartphone range will further lower the barrier to mobile multimedia uptake, said Remy.

Platform preference
Remy said for now all of its low-cost smartphones will run on Android, but he hasn’t ruled out using rival operating systems like Windows Mobile and Symbian.

“We expect to involve other platforms once they can be used in devices at [lower] price points.”

“At the moment Android is an appealing proposition right across the range,” he commented, adding that Orange is currently working with Samsung on a high-end Android phone.

Remy warned that the likes of Nokia and Microsoft will be hard pressed to catch up to Android and Apple.

Indeed, devices running on Microsoft’s Windows Mobile 7 platform are not expected to launch until the end of the year, while Nokia in April delayed the launch of its Symbian 3 operating system until the third quarter, prompting the Finnish handset giant to lower its 2010 operating margin outlook.

“Nokia and Microsoft face a real challenge,” said Remy.

“By the end of the year we expect they will be an interesting proposition, but there are no devices yet, and no real developer community – they need to drive volumes and provide an addressable market for developers.”

However, Remy said Orange is currently working towards porting some of its applications to MeeGo – the operating system being developed by Nokia and Intel aimed at devices such as mobile computers and connected TVs.

“MeeGo has some major players supporting it – we’re happy with how it’s coming together,” he said.

By Nick Wood, Total Telecom