The Sydney Morning Herald from Sydney, New South Wales, New South Wales, Australia on November 2, 1999 · Page 31
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The Sydney Morning Herald from Sydney, New South Wales, New South Wales, Australia · Page 31

Sydney, New South Wales, New South Wales, Australia
Issue Date:
Tuesday, November 2, 1999
Page 31
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28 TUESDAY, NOVEMBER 2, 1999 WEBTV By KATE CRAWFORD Telstra is expected to announce a partnership with computer game maker Sega to ' provide an Internet service for a TV game console which will go on sale in Australia this month for S499. The Sega Dreamcast will be the first TV-based Internet console to be marketed in Australia. Telstra previously has been courted by two US software companies, Microsoft and Oracle, which also provide television-based Internet technologies. The Dreamcast, which will be launched in Australia on November 30, is primarily a game-playing machine but also features a 33.6Kbps modem that can be used for e-mail and Web access. Significantly, all Dreamcast subscribers will be forced to access the Internet via a Dreamcast portal site which Sega hopes will become a Yahoo-style destination for consumers. The portal will be gradually developed into an e-commerce hub that will involve partners in areas such as banking, music, movies and lifestyle products. Telstra is expected to offer three months' free Internet access with the machine, after which a special low rate will apply to Dreamcast users. Mr Gerard Noonan, the managing director of Ozisoft, which represents Sega in Australia, declined to comment on the choice of Internet provider as it "hasn't been announced yet". He said the Dreamcast would attract customers who wanted access to the Internet but did not want to pay the Sl,000-plus cost of a personal computer. "This will be a serious competitor in the PC market Based on the research we've done, people primarily buy computers to communicate, surf the Web and play games. Dreamcast does all that and in an unintimidating way." C1 3 f 3 - -- ---r 3 'mr I I MR WORLDWIDE Sydney (02) 9925 i 1 V 4 I Q Q I 0 dream cast for )m X Wj0 Sega is predicting that as many as 100,000 people will buy the Dreamcast console in its first 12 months in Australia. Rival TV games maker Sony k i ' " t'.ifX' 'ir j "'" ? 'j' l Jh5 'M' '' r-Jij't. Internet Market Research 0555 Melbourne (03) 9864 0777 or- n is also preparing to launch a similar device, called Playstation 2. The Sony device, however, will not be available in Australia for at least another -fig ...;iitiiiiw,IMIIlinilMfjy.. year and may cost $700 or more, according to Sony Computer Entertainment Australia's managing director, Mr Michael Ephraim. Soprano tunes into mobile Net profiles INTERACTIVITY By SUE LOWE IBM, Motorola, Nokia and Telstra have independently but unanimously predicted that there will be more mobile devices connected to the Internet than PCs within five years. That is good news for five-year-old Sydney company Soprano Design, one of many hopeful Australian software makers now concentrating on applications for mobile devices. The estimates differ, but IBM's chief executive officer, Mr Lou Gerstner, recently placed his bet on 600 million Internet-connected PCs by 2003 and 2 billion hand-held devices. The bulk of that growth is expected to be driven by a new standard, the wireless application protocol (WAP) that will allow Web pages to be displayed on next-generation mobile phones and phone users to respond to them. Mr Richard Fayero founded Soprano in 1994 to advise on the deregulation of the telecommunications industry, but after 2A years it became obvious that "the companies we were advising were gaining more than we were". "We decided we had to have a product," he said. Another 2lA years later, and Soprano has developed two software platforms for a range of mobile devices. A personal productivity suite provides e-mail, diary, share-price feeds and news, while an e-commerce platform uses the two-way interactivity of WAP to provide Internet banking, share Powertel to undercut Telstra rates by 20pc DATA SERVICES Telecommunications provider Powertel plans to offer data services at prices more than 20 per cent below those of Telstra when it completes its $230 million fibre network early next year. Sydney-based Powertel, which is controlled by US-based Williams, will offer data, phone and video services to corporations from January next year when it completes its fibre-optic network "Playstation 1 launched at $699, and the new machine should only be slightly more expensive than that," he said. "But it is such a superior trading, ticket buying and shopping. Both platforms feature high levels of personalisation. "We take a customer's profile, the messaging services they use and their preferred billing model and we deliver to any mobile device," said Mr Favero. The range of messaging formats and devices supported include wireless markup language for WAP phones, hand-held device markup language (HDML) for organisers like the Palm-Pilot and short message service (SMS) for GSM mobile phones. It is the ' Hi : .'WliWlWll r'UHiiutir, - iB In the pipeline tailor-made. ability to tailor both the content and the delivery path for different users that Mr Favero believes will set his company apart from the wave of Web developers he expects to migrate to WAP content development as devices start to ship in volume. Telstra, Optus and Vodafone have all committed to introducing WAP-capable services this year pending the delivery of WAP handsets but Mr Favero predicts serious take-up will be tied to the introduction of number portability, which is expected in Australia's three main cities. That includes a 1,000 km link between Sydney and Melbourne, making Powertel the country's third-largest owner of fixed-line telecoms networks behind Telstra and Cable & Wireless Optus. Powertel has laid its fibre to 200 buildings in the three cities and may double that depending on demand. It will compete with A APT and MCI WorldCom, which are also building fibre networks in cities here. Bloomberg 1 elstra machine that we barely consider Dreamcast a competitor." Sony also has the advantage of a large user base. About 1.4 million Australians bought the first Playstation, compared to about 40,000 who bought Sega's Saturn console. Sony is yet to choose an Internet service provider for Playstation 2, but the company is already planning an e-commerce hub, similar to Sega's, for the Playstation 2 Web site. "We will be able to talk about our e-commerce plan by April next year, but we are certainly in talks with potential partners," said Mr Ephraim. Analysts have praised the move by Telstra to partner with Sega, and predict the alliance between the two companies will become increasingly powerful. "This is a very important avenue for Sega and Telstra to move into," said telecommunications analyst Mr Paul Budde. "Telstra can only win from this partnership as it will prove to be an excellent test bed for Web TV. It's a way to find out precise information on how young people use the Internet on their TV set and then use that first hand experience for other commercial ventures." Mr Kerry Packer's Ecorp has indicated it will enter the Australian Internet TV market, probably in partnership with Microsoft's Web TV division, which now has about 800,000 subscribers in the US. However, Ecorp's executive chairman, Mr Daniel Petre, said last week he was not married to the Microsoft platform. Microsoft's Web TV has been given trials in Australia by various companies in the past few years, but it has never been marketed here. Pay TV operator Austar is expected to launch a rival Internet TV service at the end of the year using Sun Microsystem's OpenTV technology. A Telstra spokesperson was not available for comment. to be introduced in the first half of next year. "Most people are on 12- to 18-month phone contracts. It won't be until number portability is in place that there'll be a swing to new-generation handsets and networks. People don't want to give up their mobile number." Last week APN News and Media became the first outside investor in Soprano, taking a 25 per cent stake for an undisclosed sum. APN Digital's media director, Mr Richard Newsome, describes the investment as "like investing in an Intel or a Microsoft . . . This is going to be the backbone of mobile commerce." APN simultaneously took a 35 per cent stake in a joint venture with InTouch, a South African short message service. The joint venture, known as iTouch Australia, will be managed by Mr Favero. "They're strongly complementary, " Mr Newsome said of the two investments. "ITouch has the SMS capability and what Soprano brings is the next generation of that two-way traffic; the ability to respond to messages." ITouch will also market Soprano services in Australia. In the meantime, Mr Favero is continuing with plans to expand Soprano Design into Asia and the US. "We plan to be in Singapore in March and the US later in the year," he said. "We have the capital to deal with the Asian expansion, but we're looking for an equity partner for the US." His ideal partner would be "a global organisation that can bring distribution value. There's only so much you can do on your own." ICM moves into EFTPOS By KATRINA NICHOLAS International Contract Manufacturing will add more than $20 million in revenue to its bottom line after acquiring a Scottish EFTPOS manufacturing plant The Sydney company has spent $5 million to buy the plant from Ingenico Fortronic, the British arm of French EFTPOS terminal producer Ingenico. The investment will be funded through a capital raising to be undertaken soon by ICM. CRM: its aim is to serve you DAVID BRAUE You'd think it was obvious but, for many companies, the concept of customer service is a relatively new phenomenon. Traditionally, for example, many companies would close their phone support lines early in the evening and over the weekend. Yet, with increased competition due to deregulation, privatisation and the Internet, many industries such as banking, insurance, telecommunications and utilities have suddenly become aware that high levels of customer service such as 24-hour support are now expected. Phone service hours are being expanded, companies are using the Web to empower customers with self-service capabilities, and personalised mass marketing is slowly gaining acceptance among Australian advertisers. The latest move in this new push to court the customer is a category of information systems collectively known as customer relationship management, or CRM. CRM software touches a wide range of disciplines. Among these are salesforce automation (another buzz word relating to the online sharing of sales leads), caH centres (which are beginning to integrate customer databases with online customer service), mass marketing and field service. Many CRM systems are specifically designed to give the customer direct control over their account and service details, increasingly through the Web. Such self-service applications are fast becoming ubiquitous through applications such as phone banking and online bill payment. Organisations such as Australia Post will soon extend the concept by introducing online invoicing and payment capabilities. Another growing self-service CRM component is procurement, which allows employees of a company to streamline acquisitions by purchasing supplies online from a customised catalogue of permissible products. Online procurement has proved to be extremely cost-effective, reportedly slashing acquisition costs by up to 90 per cent in some companies. If empowerment is one of the catch words driving the CRM revolution, the other is personalisation. This no longer simply means inserting the customer's name and address at the top of a mass mail-out (which can be done using quite simple contact management software). Personalisation now implies the ability to monitor and react to each customer s individual tastes. The overriding goal, many advocates like to say, is to enable personalised mass marketing "with an audience size of one". The idea is to treat each customer as if they are your only customer, even though you might have millions of customers. CRM systems allow companies to target specific audiences of customers by interest, then give each customer a personally tailored message or service that increases the chance of take-up by catering to their specific interests. For instance, it could allow a retailer to automatically send out a catalogue of expensive male-oriented gifts to a household the week before father's birthday. CRM systems, often called "front-end" systems, usually connect into "back-end" databases containing millions of files about customers' past purchases and other financial details collected over years and even decades. Integration with other back-end systems, which handle core business management functions such as financials and manufacturing, allows companies to adjust manufacturing strategies based on up-to-the-minute customer demand. This, in turn, lets companies minimise marketing expenses and instead focus on improving the areas of their business that most influence customer satisfaction. Estimates suggest that, as competition increases and customer service becomes a core strategic asset, the CRM market will grow at an average of 58 per cent per year, rising from SUS1.2 billion (S1.9 billion) in 1997 to SUS11.5 billion in 2002. To take advantage of this potential cash cow, dozens of computer companies have jumped into the burgeoning CRM market. Long-time CRM leaders such as Siebel Systems, Clarify and Vantive are all pursuing strategies to extend the reach of their products with new modules, as well as tightening their integration with back-end systems. Major back-end software providers such as Oracle and SAP are busy developing their own CRM solutions, while Peoplesoft recently took a short cut by purchasing Vantive. Even Nortel Networks, a major provider of call centre and other telecommunications equipment, got into the game with its recent purchase of Clarify. Expect such acquisitions to continue as major companies jockey for position in this fast-growing, increasingly important sector of the enterprise IT market. ... a rainy day in Asia Internet users in the Asia Pacific region are continuing to demand Web pages written in their native language. US and European e-commerce businesses available in multiple languages are increasingly attracting an Asian audience that is beginning to spend outside the region. Chinese Web users buying from foreign sites: 1998 iM,-J 0 Korean Web users buying from 1998 fc-.V-i 0 ICM already makes about 50,000 EFTPOS terminals each year for Ingenico in the Asia-Pacific region and will now provide about 100,000 terminals for the European market More than 60 per cent of its revenue comes from making telecommunications and data communications equipment, including EFTPOS tenriinals. Last financial year the company reported sales of $27.4 million, an increase of 26 per cent on the previous year. Net profit was $1.7 million. Managing director Mr Carlos Piteira said original equipment 1999 CUia foreign sites: 4fJ J 1999 SOURCt: IDC AUSTRALI Europe manufacturers were increasingly outsourcing manufacturing jobs, preferring to focus on areas such as design and marketing. In Australia, between 30 and 40 per cent of electronics manufacturing was outsourced but in Europe it was closer to 20 per cent, Mr Piteira said. However, he said outsourcing manufacturing in Europe was expected to reach 50 per cent soon. Worldwide, the contract manufacturing industry is worth $100 billion and is expected to double by 2001. In Australia the market is worth $700 million.

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