Helio's Hard Times

Credit: Toby Pederson

I had the chance to visit the Helio headquarters in Westwood, CA, last year to write this feature story on the company's ambitions. Now comes news that Virgin Mobile USA is buying Helio for $39 million, making for an impressive burn rate on the $710 million invested in Helio by Earthlink and the Korean phone giant SK Telecom over three years. (The companies' initial joint investment of $440 million, which I reported in the feature, was followed by a $270 million infusion from SK Telecom.) Both Virgin Mobile and Helio had been small players in the mobile markets, buying capacity on the Sprint Nextel networks to run their businesses. Helio's offerings will remain available from Virgin Mobile.

Helio was ahead of conventional American tastes, offering high-end, do-it-all services and devices for the mobile Web. It broke ground with all-inclusive data plans, integration with sites like MySpace and YouTube, and unified e-mail interfaces. Of the many statistics the company loved to toss around, one stood out: 95 percent of Helio users actually accessed the Web from their Helio gadgets. (The rest of us mainly use our cell phones for voice calls or text messages; only 13 percent pay for Web features on mobile phones.)

But while Helio's most ambitious device, the Ocean, was mechanically interesting, it may have been too much so. It had dual sliders and a full Qwerty keyboard, and its beefy size recalled that of an eyeglass case. But the Ocean was in development at the same time that Apple was secretly developing its own do-everything gadget. The sleek, touch-screen iPhone launched around the same time as the Ocean, and the rest is history.

Google Announces Mobile Plans

Amid buzz about a possible Google Phone, today the Internet search giant revealed its plans for a move into the mobile world. (See "Why Did Google Buy Jaiku?") The bad news is that there is no Google Phone, according to Andy Rubin, the company's director of mobile platforms. The company's good news is that Google does have a plan for mobile--and a far-reaching one at that. The company announced that it is launching Android, a platform for mobile devices that includes an operating system, a user interface, and applications. The system is designed to combat the problems that developers face with mobile phones: that every phone is radically different in terms of its specifications, and applications usually have to be redesigned for each individual model of phone. (See "Making Your Phone Smarter.") If phone carriers and manufacturers adopt the Android platform--and Google seems to have already lined up some who say they will, in the form of the Open Handset Alliance--phones could get much more powerful as developers become able to concentrate their resources on building applications rather than on rebuilding them. Google's strategy also seems to involve improving Web services to mobile phones. Rubin's entry on the Google blog gives the impression that Android is only a small part of the company's strategy in that arena.

Handsets Cross One-Billion Mark

Mobile phones are on the move. Sales of mobiles broke the one-billion-units-sold barrier in 2006, further securing the dominance of the handheld market.

One of the biggest sales drivers is the specialty phone, whether doubling as an all-in-one organizer or as a digital-media device. Consumers continue to shell out big bucks--high-end phones can cost upward of $400--for the multiuse devices.

And demand for the devices has spread outside the traditional three-market sphere (Japan, Europe, and North America). From the Reuters story:

“More recently, however, device shipments into emerging economies in Asia/Pacific, Central and Eastern Europe, the Middle East, Africa, and Latin America have surpassed shipments to mature markets," said analyst Ramon Llamas at market research group IDC.

While the traditional mobile-phone powers--Nokia, Samsung, and Sony Ericcson--still rule the roost, many expect Apple's iPhone to push the mobile market even higher.

The popularity of these multimedia handsets, while offering a compelling new outlet for music and movies, will bring a new headache to the entertainment industries already reeling from a continuous seven-year battle with file-swapping users. As these devices get more powerful and ad hoc, Bluetooth-enabled communities spring up, and sharing will no longer be confined to the home computer.

And that's a very real possibility, according to a new study that found that 60 percent of Americans don't believe downloading movies is against the law.