Europe UK : Hutchison's new handset subsidiary INQ Mobile has revealed its much discussed 3G 'social networking' or 'Facebook' phone. The INQ1 manages to combine tight integration of a range of web experiences with phone functions (such as the address book) with low cost both to the operator and to consumers. The INQ1 will launch on the 3 networks in Australia and the UK before Christmas, and there are plans to sell the devices into other operators outside the Hutchison family.

Handset integration with web applications is vital for a good experience

Ovum has previously expressed the need for handset OEMs to more deeply integrate web applications with a device's underlying software platform (see The phone OS - why it still matters to the mobile user experience). INQ's approach to bringing web applications to mobile phones is certainly well thought-out in this regard, despite a modest intended price tag (around £80 with a £5 prepay top-up or free on a £15 per month contract) and unspectacular hardware (possibly the device's weakest link). Supported services at present include Facebook, Windows Live Messenger, Skype (the INQ phone is essentially an evolution of 3's Skypephone family) and Last.fm. The benefits of INQ's approach will be conspicuous to end users. For example, Skype and Facebook contacts can be merged with their equivalent entries in the device's address book, enabling a caller's Facebook picture to pop up when they call. Equally, photos can be automatically uploaded into Facebook in a similar way to third-party applications such as ShoZu. Other aspects of usability are equally high with a Yahoo! Go-alike carousel interface and live widgets on the home screen, while 3's push email infrastructure based on Seven is used to refresh content regularly. The INQ1 can also be used as a mobile broadband dongle for use with a laptop using 3's existing PC connectivity software.

BREW was the key to fitting a lot in a small package

It is generally assumed that web and device integration of this type will be limited to high-end devices featuring open platforms such as Symbian and Windows Mobile. However, INQ has been able to achieve similar functionality at relatively low cost using Qualcomm's BREW software. Moreover, BREW proved to be the only handset platform able to combine relatively low-cost hardware - compared with that typically needed for open platforms - with multi-tasking. Java is not able to deliver this, while Linux (the other obvious possibility) is still not ready for mass-market handset use. Nonetheless, off-the-shelf BREW was not enough for INQ, which together with its partner Amoi, has built on the platform and extended it through some additional custom APIs and considerable custom application development. Importantly, INQ has also worked closely with the web application providers whose wares feature on the device to create the best possible experience when using those services - something few other OEMs (or operators) have so far achieved.

Major OEMs will be challenged to respond

Does this mean that BREW is likely finally to gain meaningful traction in traditionally Qualcomm-averse GSM markets? Probably not. But what it does do is highlight the inadequacies of most current mid-range handsets and challenge their makers to match the functionality of INQ's device and at a similar price. INQ's target is around $185 to the operator, whereas the majority of other handsets that are theoretically able to handle similar services come in at between two and three times that figure. This is especially true of handsets based on old-fashioned, often proprietary, platforms such as Nokia's Series 40 and the Sony Ericsson-favoured OSE from ENEA. These could help operators bridge the gap between high-end, high-cost devices and growing user demand for access to web-based applications and services. However, INQ's efforts make them look impotent. INQ's argument is that margin, not ARPU, should be the bottom line for operators. Although not a new idea, its resonance is considerable at a time when the cost of high-end devices to operators is not matched by subscribers' ability or willingness to part with large amounts of cash on discretionary items such as mobile phones and sizable data tariffs. The end result is either hundreds of thousands of high-end devices left sitting on shelves or operators being forced to subsidise them beyond the point that they are truly cash generative. With times hard for operators, OEMs and consumers alike, INQ's and 3's timing would appear to be spot on.