Qualcomm, the company behind many a 3G chipset, recently invited Crave to visit mobile phone companies in the Far East, so we could get a better idea of how the Asian mobile market is developing, particularly with regards to 3G. It's easy to assume that South Korea and are miles ahead of the European and US mobile markets, but what we found is a little more complex than that. Certain areas, such as mobile TV, are definitely more developed than anything we have here, but the struggle to create value through new products is as difficult there as it is anywhere else.
We started our tour at Samsung in a complex in Seoul that houses around 20,000 employees. One of Samsung's challenges is that it's so large, and releases so many products, that consumers are overwhelmed by the number of phones it has to offer. During our meeting with some of its mobile execs, there were hints that Samsung no longer strives to constantly be at the bleeding edge of the market, but aims to make more "meaningful" handsets. Whether or not this means it's going to slow down production rates and create clearer product lines has yet to be seen -- but we hope that's the case.
When we asked Samsung whether or not a more meaningful portfolio of phones would involve services such as Nokia's, Samsung wanted to make it clear that it didn't want to offer services that competed directly with networks.
Equally keen to side with the operators was LG, which explained that it had to take operators' needs into account before launching products -- and therein lies a major problem for the two Korean behemoths. Having to balance consumer needs with network needs makes for a very complicated process, so what's the solution? Enter Google Android and the open platform.
During our Asian tour there was a breath of fresh air in the form of Android and the Open Handset Alliance, which both LG and Samsung are involved with. While neither manufacturer would confirm when it was going to ship an Android device, there's no denying that an open platform presents both manufacturers with an invaluable opportunity -- to properly copy the iPhone.
That might be a cynical way of looking at it, but nevertheless what the iPhone has shown the rest of the industry is that by allowing third-party developers to create a proper app ecosystem, the consumer experience becomes much more meaningful.
The idea that an open consumer platform increases a handset's worth, both locally and globally, was strongly emphasised during our time in Japan. Music phones, camera phones, phones that test your breath for alcohol or help you exercise -- you name it, you can find it in a Japanese phone shop. But an abundance of handsets combined with inflexible platforms makes for a confusing marketplace that doesn't ship well to other countries.
On the second lap of our Asian tour we met with NTT DoCoMo, one of the largest operators in Japan, which candidly explained that it saw simplicity and openness as the way forward, at least in Japan.
So what's the big deal? In Japan, mobile phones seem to be getting too hard to use, or they're packed with features people don't need, which is why an open platform offers the best solution. The fact is that while hardware, including 3G chipsets, is still very important for the industry, it's going to be customisable software and services that will add meaning.
In the same way that Nokia stormed the market with exchangeable covers in the 90s, allowing the masses to individualise their phones, 2009 is going to see 'exchangeable' apps play a key role in making the mobile Internet and location-based services digestible.
Serve the customer
Equally noteworthy is how the introduction of flat-rate data plans significantly boosted the Japanese market, which is being echoed here in the UK with tariffs such as Web'n'Walk -- but there's still work to do. Better roaming agreements are key to pushing data-dependant services and that's important because it's apps and services that are going to promote growth in Asia and everywhere else.
Take mobile TV, for example: as a one-way broadcasting system it doesn't offer a very compelling business model, but add a viewer's location and viewing habits into the mix and every advertiser will be clamouring to buy mobile TV ad space.
What can we learn from South Korea and Japan? If consumers, manufacturers and networks are truly going to reap the rewards of new technology, the answer isn't to flood the market with hundreds of new devices -- the answer it seems lies in simplifying the entire process, from the top.
For starters, you need cutting-edge technology, but you have to make it easy to use and simple to add or remove services. Whether it's a smart phone or music phone, allow for openness, so that users can customise it to work as they want it to. Finally, don't overcharge for Internet access or roaming, because that's what's going to push things forward.
It's no good relying on European or US operators to decide what consumers are going to find meaningful. LG and Samsung have to take a leaf out of Apple and Nokia's book and take more calculated risks, even at the cost of annoying the networks. Indeed, the only reason the iPhone ever had a chance was because the market got complacent, churning out boring products. LG and Samsung are in danger of falling into that hole, which is why they should jump on the open-platform bandwagon as soon as possible. -Andrew Lim