O2 steps up Asian convergence

U.K. mobile communications provider O2 is set to swell its portfolio of wireless converged devices in Asia, pledging to double product shipments in the region.

Headlining the company's upcoming device onslaught is the O2 Xda II Mini, an iPod-sized PDA-phone for markets with GSM networks. Running on Microsoft's Windows Mobile 2003 Second Edition operating system, it is equipped with a 400MHz Intel processor and a 1.3-megapixel camera.

The company is also expected to announce another Windows-based offering called the Xphone II, a slimmer and lighter version of last year's Xphone smartphone.

Both the Xphone and Xda II Mini, which are expected to be on sale by the end of the year, will be exclusive to the Asia-Pacific region.

Mark Billington, managing director of O2's operations in Asia said: "We've seen such a big pull on the style factor for Asia that really drove the demand on the Mini. There is pent-up demand here from people who know their products really, really well and are prepared to compromise on features to get that form factor."

"With the Xphone II, we've got a market that warmed very quickly to our original Xphone", he added.

Apart from the two devices, O2 will also be selling the Xda IIs and Xda IIi, which were unveiled in Europe earlier this month. The Xda IIs, which comes with a sliding keyboard, will go on sale in October, while the Xda IIi, with its 1.3-megapixel camera and Intel 520MHz processor, is expected in early 2005. Both devices offer connectivity features like GPRS, Wi-Fi and Bluetooth.

According to Billington, the company has made steady progress since it entered the Asia-Pacific market more than two years ago. It has tripled sales of its flagship Xda product line in the last 12 months, shipping more than 100,000 units of the newer Xda II PDA-phone, he revealed.

He also added that buoyed by past sales records, the company is looking to double the shipments of its upcoming products in the region.

"We're bringing out more products and we're expanding the distribution that we have, going into more countries such as India", he said.

O2 is one of several device makers looking for a share of the growing market for gadgets which marry handheld features with mobile phone functions. According to a report by research firm In-Stat/MDR, shipments of such converged devices are expected to surge over the next five years at a compound annual growth rate of 44 percent.

Hewlett-Packard recently released its h6300 series PDA-phones, which comes with GPRS, Bluetooth and Wi-Fi capabilities. Another converged device, Nokia's latest Communicator, is expected in the first quarter of next year.

O2 is currently firming up its 2005 portfolio, which is likely to comprise up to eight products, said Billington. In the pipeline is a hard drive-based PDA-phone with multimedia capabilities, he told silicon.com's sister site CNET Asia.

"What I see as a big step forward is convergence around music," he said. "I see a device possibly having TV, digital radio, a hard disk drive and 3G. That's where we see the roadmap going, that's where our focus is."