Say what you want about the relative impacts of gorgeous weather, sloppy food, unruly children or even demanding conversations on drivers’ attention and, therefore, everyone’s safety. But in California-the nation’s most populous state-the debate is over. Earlier this month it became the fourth state to ban talking on handsets while driving unless drivers use a hands-free device.
The ban puts significant voice revenue for network operators on the line-from 10 to 30 percent of all mobile voice calls globally are made from inside motor vehicles, depending on the region, according to analyst Neil Mawston of Strategy Analytics. And that will drive carrier, vendor and independent retailer promotions for and sales of hands-free devices, according to industry participants.
Among hands-free devices that depend on Bluetooth technology, for instance, the leading vendors are Motorola Inc., Jabra and Plantronics Inc. Bluetooth sales increased 153 percent last year, according to Strategy Analytics, and such sales are set for 70-percent growth this year. Another factor driving sales is multimedia handsets requiring stereo Bluetooth, but average prices will have to drop by half to reach the consumer sweet spot below $50, according to the firm.
“The California (legislation) is good news for the United States’ Bluetooth headset market,” said Mawston. “Stricter drive-and-talk laws in developed markets around the world have been, are and will be the major driving force behind mono Bluetooth headset sales globally, from 2001 through 2010.”
“Further,” Mawston said, “California is perceived as a high-profile thought-leader in the U.S. and worldwide. This (legislation) may eventually prompt other states or countries to follow suit in the future.”
California’s move likely represents a real jolt to efforts to promote hands-free mobile use to protect voice revenue and boost accessory sales. Its population is more than the combined populations of the other three states-New York, New Jersey and Connecticut-that have banned handheld mobile-phone use in vehicles. According to a chart provided by Motorola, another dozen states are actively considering bills to address drivers’ usage of mobile devices while at the wheel.
The Tier 1 carriers all take the position that subscribers should obey local laws and use mobile phones responsibly. But Verizon Wireless explicitly backed the California legislation and Cingular Wireless L.L.C. has in the past provided a couple dozen “Awareness Tents” on major highways nationwide in the holiday season to promote hands-free mobile use.
An upswing in hands-free device sales based on legislative bans is difficult to quantify, according to wholesale distributor Brightpoint Inc., because those sales represent only 5 to 6 percent of the company’s handset-oriented business and don’t merit close statistical scrutiny, the company said.
“But I can assure you, as a wireless industry person, that these markets will see an uptick,” said Anurag Gupta, senior vice president for global strategy at Brightpoint.
In California, demand for hands-free devices has already begun, as news of the legislation’s passage reaches the citizenry. News of legislation’s passage typically is a more powerful motivator than the seemingly distant compliance date of July 1, 2008, according to Paul Nicholson, Motorola’s head of marketing for accessories in North America.
Nicholson said that Motorola already has seen “a healthy increase” in hands-free-related sales as a result of the California legislation, as it did when Spain, France, England and Chicago-Motorola’s hometown-enacted similar laws.
“Typically we see an increase in sales before the legislation takes effect,” Nicholson said. “When it’s newsworthy and topical-as it is at the moment in California-is when people think about getting compliant. So we’re already starting to see an increase in sales in California.”
“Certainly, Bluetooth headsets are in vogue at the moment,” Nicholson said.
Motorola sells its hands-free accessories through carrier retail channels, big-box retailers, independent dealers and online. Products range from $10 to $20 for wired ear buds to $50 to $130 for Bluetooth headsets. This week Motorola announced that, in selected locations, it would provide “robotic stores” akin to automated vending machines to offer handsets and accessories such as hands-free headsets to travelers suddenly in need. The company did not mention locations for the automated offerings outside its Chicago metropolitan home base.
More than half of the handsets sold in North America this year are Bluetooth-enabled, Nicholson added. But every phone has an audio jack, so everyone has an opportunity to go hands-free with technology in their price range.
California Gov. Arnold Schwarzenegger signed the bill mandating hands-free device use for drivers into law on Sept. 15, four days after lauding a CTIA Wireless I.T. & Entertainment keynote audience for contributions to his state’s economy. Whether the boost in hands-free sales will match any lost voice revenue from the California legislation is not yet known, of course, and may not be quantifiable. But the legislation clearly reflects political pressure from a variety of sources on state legislatures and governors to address the topic, perhaps due to high-profile news accounts of gruesome accidents in which mobile devices appear to have played a role.
