Tuesday, February 24, 2009

Is Asia the center of mobile universe?

I wonder if Asia is the center of the world's mobile industry. Many mobile industry people I talk to tend to think that way, but is it really so? When it comes to handset makers, Japan indeed has more than its share of manufacturers. We have many internationally know consumer electronics brands, such as Sony, Panasonic, and Sharp, just to name a few. Yet the biggest mobile handset manufacture in the world right now is Finland's Nokia. According to IDC, the US research company, Nokia has a lion's share of 39.1% of the world's mobile handset market in the fourth quarter of 2008. Korea's Samson is the distant second with 18.3% share. Also Korea's LG Electronics came in third with mere 8.9%. Japanese consumer electronics big names, as a matter of fact, are grouped together as "the rest"; they don't have a meaningful presence in the world's mobile handset market.
All right, forget about handsets. Let's look at mobile operating systems.
Personal computers have operating systems such as Windows, Apple's OS X, and Linux. Just like PCs, mobile phones have the operating systems also. Traditionally, handset manufacturers have their own home grown operating systems, but in order to cut cost, the industry has been desiring the common operating system so that they would not have to develop the whole software from the scratch. If the basic functionalities, such as making phone calls or sending emails, are handled by the operating system, the manufacturers can concentrate their resources to develop other functionalities to differentiate from competitors. Indeed, some manufactures get together to form industry wide consortiums to develop an operating systems as a common platform. LiMo is one of those endeavours that the industry players working on. Symbian is another operating system, developed by Nokia; but Nokia made the operating system as open source so that anyone in the industry can use the software.
On November 5, 2007, Google, the US Internet giant, sent a shock wave across the mobile industry, announcing that they were going to develop an open source mobile operating system and would make it free of charge for any mobile handset makers to install on their handsets.
Again, no Asian companies playing major roles in the mobile operating systems space.
So why some Asian mobile players still think that Asia is the center of the mobile industry.
There are two reasons I think: sheer numbers and advanced functionalities.
In developing counties, it is said more people access the Internet via mobile phones rather than personal computers. Owning a PC for occasional information gatherings may not be very cost effective for not so wealthy people in redeveloping countries. Compared to PCs, mobile phones are affordable and offer great utility even for people who are not technologically savvy. Anyone who purchases a mobile phone can talk with land line phones users from day one. Therefore it make more sense for a person with not much disposable income to own a phone rather than a PC. Even voice communication is what prompts people to purchase a mobile phone, today's most mobile phones are equipped to access the Internet. Though the person at first may not realise the significance of the Internet functionalities, eventually he or she would find out that the mobile phone is something that is able to open up the window to the world way beyond the every day life .
Richard Robinson who attended the Infinity Ventures Summit 2008 Fall in Miyazaki, Japan, and spoke in a panel discussion titled "Asia is the center of mobile universe" knows the potential of Asia's mobile market. He has been working in the Internet, mobile industry in China more than twelve years, travelling constantly from a city to a city in Asian countries. Kooky Panda, his company, develops Flash based contents for mobile web sites almost all countries in Asia. Still the company doesn't have a foothold in either Korea or Japan. "Korea and Japan are two markets that are extremely advanced and attractive but I don't think that many companies are able to crack the markets. So we didn't even attempt to enter Korea or Japan, " said Richard. "The rest of the Asia Pacific, if you look at the sheer numbers, is quite attractive. Almost half of global population is in Asia. Almost half of the world Internet population is also in Asia. So you can't ignore it," says Richard. According to Robinson, Indonesia is a country with the third largest mobile market in Asia besides China and India. As the world's fourth-most populous nation with some 238 million total population, of which about 150 millions are mobile users. In comparison, there are only 25 million PC Internet users. "5 to 1 ratio," said Robinson. "And there are very limited domestic development, not a lot of fore players in the market. We enter the market last year, this year we are number one player in the market. "
Bin Liu, CEO of Yicha Online, China's number one mobile search engine company thinks that number is power. Liu, who spoke in the same panel of Infinity Venture Summit as Robinson, says that Asia is leading mobile Internet space with its big user base. According to Liu, mobile viruses are infecting many mobile phones in China. "Perhaps, mobile viruses are something unheard of in the US or Europe," he said. Because of the large user base, problems such as viruses emerges first in China. Yet then in turn, solutions for problems also emerge first in China: There is a mobile security company in China now. The name of the company is NetQin Tech. Co., Ltd. "NetQin is a biggest mobile security company in the world," said Liu .

On top of sheer number, Asia, especially Japan, has advanced technologies also. In fact, Japan has been introducing many new mobile applications to the world. NTT docomo, Japan's largest mobile operator, has started the "i-mode" service in 200 . It has become the world's first successful mobile Internet service. Camera phone was first deployed by J-phone, another mobile operator in Japan. J-phone was purchased by Softbank, Japan's Internet conglomerate, and now has become Softbank Mobile.
Today, Japan has the largest user base of 3G phones in the world. Average phones in Japan have camera, TV, bar code reader, and Internet browser capabilities, and many advanced phones have GPS and electric money functions.
It is true that Apple's i-Phone and Google's Android based phones are technologically very advanced. Yet, basic technologies in those phones have been well into use by Japanese phones some years ago. i-Phone 3G sale was reported with such a fanfare by the Japanese press, yet it hasn't necessarily swept the Japanese market.

"Asia is cell phone centric," said Bin Liu, of Yicha, "neither iPhone or Android has made any big progress." "Japan and China are largest mobile Internet countries in the world," said Liu.

This article is a part of the draft for a book I am writing in English right now. Please let me know if there is any misspelling or factual errors.

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