Thoughts @

say hello to helio

“Future revenue growth comes from creating relevant content and services for their lifestyles rather than evolving feature led technology
(Mobile Youth, 2004).”

Walking into Helio’s (www.helio.com) LA-based headquarters last week was like stepping into a dot-gone past. It is very much a work-in-progress with boxes of new computer equipment lining an already crowded back wall – feeling the growth of the company from 80 to over 250 employees in just the past year. From my perspective, Helio is doing it right. The logo and design aesthetic is present from the moment you walk in to the white-crisp walls with flat screen high resolution monitor displaying the flash animation placeholder currently teasing the industry at Helio.com. The new devices Kickflip and Hero display the same icon motif along with Helio-branded fobs that hang off the ends of the phones to further customize and differentiate their branding. “These (fobs) are just prototypes,” CEO Sky Dayton tells me later, “we want to get them just right.”

helio\'s kickflip and hero handsets

Mobile Virtual Network Operators (MVNOs) are service providers who lease available bandwidth from existing carriers and package it with their own branding and marketing campaigns. These lifestyle and brand-driven networks offer customized content to very targeted niche markets. Subsequently, A number of traditional carriers with extra bandwidth have also started to create their own sub-brands as MVNOs within their infrastructures (like ZeroForty and TeleFinland, being low-cost, youth-oriented sub-brands of Finnish incumbent TeliaSonera). By segmenting the branding, marketing, content and services to niche markets, the larger carriers able to capture the mass-market along with specific niche markets and keep the profits in-house.

This is new ground for the industry: As Sky rightly points out, no post-paid MVNOs as of yet have had a significant impact on this nascent market – thus far it’s been dominated by low-cost, pre-paid offerings (particularly Boost and Virgin Mobile). So the question is, will Helio succeed in the U.S. as planned? SK Telecom (the leading provider of mobile services in Korea) and Sky Dayton are counting on it. With MySpace in their back pocket, the promise for converting an initial percentage of the MySpace crowd is high. As high-speed data (3G) networks become mainstream at last in the U.S. led by Sprint and Verizon’s EV-DO networks with Cingular’s BroadbandConnect HSDPA network (allowing voice and data to be used simultaneously) quickly catching up, many individuals are seeking to change their mobile devices and service plans by the end of the year. Brand differentiation, flat-rate pricing plans, ‘hot’ new devices and compelling content and services will draw individuals from their current carriers to new models. IMHO, Helio’s success depends on a decision making process starting with a compelling brand and service offering, and ending in true lifestyle integration:

1) The MySpace “Switch Factor”: Social networking has been hugely popular in other markets, most notably in South Korea and Japan. The success of MySpace (currently the #2 destination web site right behind Google) has proven that social networking in a shared interest community can work here in the U.S. The trick is to convert an audience who is comfortable with the desktop model of MySpace into an integrated mobile space. Sky and others at Helio are convinced that the Helio target is non-conventional and is more open to new models for content and services that have not been seen before. Once Helio succeeds with this initial target audience, the mass-market (still targeted at 18 – 32 year olds) will (hopefully) follow. MySpace On Helio may prove to be the next “killer app” the industry has been searching for (forgive me for using that tired term).

helio profile on my space My Space members can add HELIO as a ‘friend’

2) Flat Rate Data Pricing & Subsidized Handsets: Although high-speed (3G) networks have a higher penetration rate outside the U.S., high pricing and ‘per-minute’ plans in other countries along with non-subsidized handsets are affecting true mass-market adoption. Recently, a colleague of mine in Barcelona was faced with an 800 Euro bill for a 3 month pay period for high speed data services. This is not only unacceptable, it is unaffordable. The U.S. has already adopted an understanding of flat rate data pricing and subsidized handsets. Although 3G capable handsets are nearly three to four times more costly than today’s regular models (2.5G), in order to generate the “Switch Factor” – they need to be offered for a low monthly cost, or even more compelling, free with an appropriate 1 or 2-year commitment. Most people I spoke to who currently used MySpace and are on the ‘cutting edge’ of gadgetry thought pricing between $50 and $70 a month would work for them. Helio loves the idea of flat rate data, and positions its devices as “data first, voice second” which will be reflected in their pricing plans.

3) True Lifestyle Integration & Seamless Usability: The last factor, which is perhaps the most important, is the true integration of Helio into the customer’s lifestyle. This means the brand promise needs to exceed expectations. The customized Kickflip and Hero handsets need to deliver style, functionality and usability. The lack of an integrated QWERTY keyboard may prove to be difficult for the above-teen audience who is not used to predictive text input and has gotten used to (and spoiled) by the TREO and Blackberry for email and messaging. Carrying two devices may not prove to be optimal for many who depend on email services. Helio is quick to point out, however, that the Hero and Kickflip are their launch devices aimed at the younger social networker. Power-users will see their needs addressed as Helio’s product portfolio broadens later this year.

Other factors include the true adoption of high speed data services. Once bought into the service as a subscriber, will this audience truly embrace high-speed data connections and the mobile web? Social networking and the ability to share applications, content, and messages - what Sky has coined “particles of communication” - between peer groups is one part of the equation. The other component is revenue generated from a mix of content and services such as true-tone, full fidelity music downloads on demand, location-based services, and the future of mobile payments and purchase recommendations from trusted peer groups. Helio also announced the launch of a networked portal for 2D and 3D games, which allows members to ‘gift’ and ‘beg’ and ‘rent’ - following their model of expanding services past traditional voice and text.

(from a Helio Press Release dated April 26, 2006) The Helio game service goes beyond conventional mobile offerings by linking Helio members through features based on technology developed by SK Telecom, available for the first time in the US. This includes the ability to “gift,” or purchase and share favorite games with another Helio member, or “beg” another Helio member to purchase a favorite game for you. Helio also offers an innovative “rent” model, allowing members to try any title at a lower price before purchasing a permanent download.

When asked about how Helio intends on differentiating themselves in this crowded marketplace, Sky outlines their approach. “We’re not just offering telecom services, we’re creating content and services that match the lifestyle of our customer – they don’t want the normal, we’re giving them something different.” Helio EVP Stuart Redsun concurs. “We are creating a lifestyle that people want. It is not for the group that is looking for cheaper rate or a mainstream package.” He says. “We’re addressing a new audience that wants something different. And we’re going to give it to them.”

We’re only days away, the countdown has begun. And the world is watching.

Posted on April 28th, 2006 in Thoughts
Tagged as , , ,
Written by Kelly Goto

5 Responses to “say hello to helio”

Comments

  1. have sk3 I just saw the add I'm in virginia what can helio do that my sidekick3cant says:
    April 28th, 2006

    What

  2. Sten8172 says:
    April 28th, 2006

    I can’t be bothered with anything these days, but shrug. I just don’t have anything to say recently. I haven’t gotten much done recently. Nothing seems worth thinking about.

  3. gabby says:
    April 28th, 2006

    omg that white helio cell phone is sooo cute ive got to get one after iam done with my stupid razer omg i love that white phone it is adorable i would like to know how much it is and where do you get it no joke ok bye

  4. Samantha says:
    April 28th, 2006

    You mean Hello Helio :)

    http://www.hellohelio.net/

  5. Asif Ahmed says:
    April 28th, 2006

    Helio has definitely grown up from its startup phase and it is catching on more and more as a business device especially with the killer combo of Microsoft Exchange and Helio Ocean all on the all you can eat unlimited plan.

    Asif Ahmed
    http://www.heliobusiness.com

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