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Arming the E-mail Road Warrior

Companies from Palm to Vodafone to Microsoft are starting to cash in on the untapped market of corporate mobile e-mail customers

Judging from the platoons of road warriors who can normally be seen furiously tapping away at their BlackBerrys in the waiting area of any international airport, it's hard to believe that there is anyone left in a business suit who doesn't own some kind of mobile e-mail device.

Surprisingly, though, mobile e-mail for corporate customers remains an underdeveloped market. Of the 650 million corporate e-mail boxes in the world, only 10 million are mobile, according to estimates by Finnish handset maker Nokia. And while customers bought around 1 billion mobile phones last year, sales of smartphones that combine the job of handset and handheld organizer, such as the Research In Motion (RIMM) BlackBerry and Palm (PALM) Treo, numbered only in the tens of millions.

That pool of potential business customers leads Nokia (NOK) and others in the industry to believe that mobile e-mail and other remote office services could be one of the industry's next big growth areas. "There are definitely signs the business world is waking up to mobility," says David Petts, Nokia senior vice-president for global sales in the Enterprise Solutions division.

If he's right, that's good news for the Finnish handset giant, as well as for hard-pressed wireless companies such as Vodafone (VOD) or Deutsche Telekom (DT). The telcos must better exploit the broadband wireless networks in which they have invested tens of billions of dollars over the past decade. Microsoft (MSFT) also could benefit. It is focusing on business customers as it tries to build market share for its Windows Mobile operating system, which today runs on phones from Motorola (MOT), Samsung, Hewlett-Packard (HPQ), and others.

Price Tipping Point

It's no wonder the wireless industry covets business customers. They tend to spend more on services than consumers and don't switch service providers as often. In industry jargon, the ARPU, or average revenue per customer, is higher, while dreaded customer "churn" is lower.

But, as Petts admits, the long-anticipated boom in enterprise business hasn't actually materialized yet. The main obstacle so far, he says, has been the cost of subscribing to a wireless e-mail service such as BlackBerry Connect, which can exceed monthly voice and data charges. As prices come down, Petts says, "There's going to be a tipping point where companies say that's something we'll deploy broadly." But so far, that hasn't happened yet.

Nokia is obviously hoping the tipping point comes soon. Its Enterprise unit is the only division of the company losing money. In an effort to better tap the market, Nokia unveiled a trio of new devices for business users during the 3GSM wireless industry congress in Barcelona, Spain, which ended Feb. 15. One of the new models is the E61i, a pocket-sized device with a miniature keyboard and comparatively big screen for heavy users of wireless e-mail (see, 2/12/07, "Special Report: 3GSM 2007 Barcelona").

Microsoft also is focusing on the business market as a way to push adoption of its Windows Mobile 6.0 operating system for handsets. The software giant argues that corporate customers, in particular, will look upon Windows Mobile handsets as the best way to connect employees on the go with their e-mail and Windows applications in the office (see, 2/8/07, "Surprise: That Mobile Is Running Windows").

Big Push for Browsers

"The [telecommunications] operators like Windows Mobile because of the opportunity to sell into the Windows base," says Scott Horn, director of Microsoft Mobile.

The spread of road warrior handsets also would help solve a big problem for telecommunications service providers: under-utilization of their costly broadband wireless networks. E-mail not only gobbles up bandwidth, but it also helps drive use of mobile Internet browsers as people view attachments or follow links that other people have sent them.

Moreover, industry experts say companies eventually will realize the potential for huge productivity gains from mobile devices that perform functions such as customer relationship management. That will help push corporate mobile further down the organization chart (see, 2/13/07, "BlackBerry Gets Back to Business").

"Mobile messaging isn't just for execs," says David Wood, executive vice-president for research at London-based Symbian, maker of the No. 1 operating system used in smartphones from Nokia, Sony Ericsson, Motorola, and others. Indeed, the industry is banking on the idea that "mobile offices" will someday become the norm.

Ewing is BusinessWeek's European regional editor .

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