In a move that apparently wasn’t anticipated by any analyst, Yahoo! will leverage its relationship with SBC to put out a cell phone on the Cingular network. SBC, which owns a significant chunk of Cingular, has partnered in the past with Yahoo! to sell DSL and email services together. Nokia will manufacture a phone that will incorporate an interface that will allow Yahoo! users to access the same Yahoo-SBC features (mail, instant messenger, address book, etc) they’ve grown familiar with from their computer.
Some analysts theorize SBC’s move to be related to the recent deterioration of the land line business – many people just get a cell phone these days and subscribe to broadband (also there is VOip). Furthermore, the move will allow SBC customers to pay their DSL, landline and cell phone bill all in one place. Apparently this move has been given the acronym: MVNO (mobile virtual network operator – see Virgin and Boost for additional examples).
Although it is some what difficult to understand the value proposition of this move, it does further expand Yahoo’s reach. Other companies, such as Google, are growing their mobile reach or at least plan to. Yahoo! has to remain competitive. As pointed out in the article, Yahoo! is assuming a lot of risk because they are involved with the inventory of the phones. A better strategy, and maybe what they are actually doing (no one really knows for sure because Yahoo! hasn’t officially announced this move) might be to partner with Cingular directly an offer a co-branded phone with value added services. Cingular of course could win big because they could obtain the data rate billing, while Yahoo! scores because they not only keep their current users wired in, but could obtain a new client base if their services are useful enough. I could see myself most certainly using a Yahoo! mapping tool if I knew there was no upload process to my phone, and I could simply login once on the road to access my route. Take this a step further and you have GPS integration that can easily tie you and your friends together. Yahoo! could be the next social networking platform if they play their cards right, that is assuming they want to touch that ‘difficult to monetize’ media. Just ramblings and initial thought process, but it is something to think about nonetheless.