European firm aims to goose U.S. wireless data sales
DirtyHippo, a European cell phone software company, is trying its hand in the mercurial U.S. cell phone data market.
London-based cell phone software vendor DirtyHippo, unveiled Monday, is owned and operated by Buongiorno Vitaminic, a European wireless data heavyweight. Its downloads, using the DirtyHippo brand name, are now available to Cingular Wireless and T-Mobile USA subscribers.
For years, U.S. operators provided nearly all the messaging, ring tones, games, wallpapers and other cell phone applications, choosing to distribute only a lucky few from outside companies. While the so-called "walled garden" approach ensured the operator most of the profit, the few choices carriers actually offered failed to generate much consumer interest.
But beginning last year, operators recognized that the reward for opening their networks to outside software dealers--more downloads, more money--outweighed the risks of hurting sales of their own content or distributing software prone to viruses or other maladies. Top U.S. operator Cingular Wireless and No. 4 T-Mobile USA now let most third-party developers get direct access to subscribers.
But the gates aren't wide open. No. 2 Verizon Wireless and No. 3 Sprint limit outsiders to selling only lower-grade and less-lucrative horoscopes, news updates and other text-only applications, according to an industry source. But both plan to let outsiders sell "binary data," the basis for more expensive and popular multimedia applications, including games, in the near future, according to executives from both operators.
The changing attitudes is just what companies in Asia and Europe, like DirtyHippo, needed to see before crashing the U.S. market.
Outside vendors may boost the lackluster U.S. market for wireless data. Cingular, Verizon and Sprint all claim to have earned $1 billion by selling cellular data last year, but that still represents a disappointingly small percentage of overall revenues. In order for data use on phones to become more popular in the United States, U.S. operators must increase their marketing efforts--but they've been hesitant to do that, said Burton Katz, president of U.S. operations at Buongiorno. He said that means opportunities are being missed.
"We think the U.S. market for data will be the biggest in the world," he said. "The appetite for wireless data (in the United States) is no different than anywhere else in the world."