27 posts tagged “mobile phone”
It is more possible to become a stable, low-growth market. Therefore, it's no use being hasty.
[+] Will the advent of 3G lead to a reshuffle of WAP market?
Despite continuous setbacks since 2000, telecom operators have never stopped efforts in the mobile Internet market. Theoretically, Moternet, the WAP portal of the largest mobile operator in the world, China Mobile should have the heaviest traffic volume in the world. After all, it has such a huge subscriber base. This, however, is not the reality.
From an iResearch report, Handset-enabled Internet Activities in China in 2008, we can see that Sina, Baidu and Tencent are among the most visited WAP sites in China. There are even a few independent 3G WAP portals. Thanks to their huge PC-based user bases, traditional Internet players seem to have a chance to challenge telecom operators.
Will the advent of 3G lead to a reshuffle of the market? Despite the fierce battle for subscribers, New China Mobile, New China Telecom and New China Unicom have not changed their visions of transforming from "communication service providers" into "information service providers". Key to this effort will be WAP. Will other WAP sites score another goal along with the promotion of 3G?
What we might not have understood correctly is the fact that, with the advent of 3G, the WAP market might have a stable and slow growth, instead of a sweeping revolution. Therefore, it's no use being hasty. It seems that, at the present time, the conditions for a sweeping revolution are not yet in place.
[+] The development of the WAP user base is a long-term process
First, if the 3 new operators do not offer substantially lower WAP rates, there would be no momentum for WAP users to upgrade to 3G, as no major change is expected to the contents offered by WAP sites. There might be more video and mobile TV services, but the key to the acceptance of users is still the fee rate.
The problem is that only telecom operators could decide the fee rates. Other Internet players have no say in it. In view of the current competition picture, the operators are expected to cut 3G WAP fee rates to some extent. But as I said, only substantial cut in voice fee rates could significantly increase the 3G user base, which is essential for a sharp increase in 3G WAP user base.
Secondly, does a substantial increase of 3G user base mean the same for WAP user base? Experience of telecom operators indicates that a large portion of the first 3G mobile phone subscribers would be WAP users of the 2G time. In other words, as a 2G WAP user becomes 3G WAP user, there would be no increase in the total WAP user number in the market.
In the long term, with intensive 3G promotion efforts of operators, all users will eventually give up 2G (whether voluntarily or forced to do so). The process, however, might not be as fast as you and I have thought. Considering the WAP service, which might be offered as an accessory service, the development of the WAP market could be even slower. The key to the speed of growth is the fee rate, not the number of Gs.
[+] The pain in business models
Why have telecom operators not been able to make good WAP sites? Based on my 5 years of experience in an operator, I could see that the root of the problem is their business models. For telecom operators, there's no free service. Every service should generate revenue, which ideally should be collected from end-users with phone bills. One dollar from each user would add up to an amazingly large amount for the hundreds of millions of income.
WAP services are duplicates of those of the Internet, whose basic business model is to offer free service and gain revenue from advertising. Sharp conflicts are expected for the business model transformation, not to mention the difficulty of changing the mindset of staff in a short time. Telecom operators need to regard themselves as media players before establishing ad departments to gain ad revenue. For them, that's too much.
This business model would have nothing to do with the number of Gs. For WAP, if the business model were transformed to that of media in the 2G time, Monternet could have done it very well even without 3G. Now we are back to the basic question: which is scored "better", higher ARPU or advertising income? If the former, there will not be any change.
It does not mean that telecom operators have to give up fee-based music or image download services, which are, in fact, the revenue sources of the traditional Internet companies, too. Yet, if operators cannot think of anything else, their business growth would be limited. For example, Nokia is seeking cooperation with telecom operators even as it has its own advertising network.
Why didn't operators make the proposal first? Because they are still using the old mindsets. Any business you don't do, somebody else in the business chain would do. Nokia Advertising Network is a manifestation of the company's resolution to transit from the manufacturing industry to the service (particularly the Internet service) industry. Do New China Mobile, New China Unicom and New China Telecom have the same resolution?
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Prev : New Landscape in China's Telecom Market (7) The Pricing of 3G Value-added Services
- Today in History
New Landscape in China's Telecom Market (8) WAP Sector Is Slowing Down - 2008/08/10
PDA in Siege (1) The Attack of Notebooks - 2004/08/15
As a matter of fact, each of these operators has more than 100 million subscribers to deal with.
[+] Are there bystanders in the 3G market?
One interesting question: is it possible that, having obtained their 3G licenses, the 3 new operators, i.e., New China Mobile, New China Telecom and New China Unicom all choose to postpone the launch of their 3G services, and wait for the response of the market? After all, migrating existing GSM or CDMA or PHS subscribers to 3G proves to be a huge workload, and might trigger a price war if not dealt properly.
In April 2007, I analyzed 4 possible market accessing strategies of 3G operators with a chart titled "Market Strategies of 3G Operators". As a matter of fact, each of these 4 strategies has been used by telecom operators around the world. Which is the best depends on the competition situation among local telecom operators, as well as standards they adopt.
Most operators planning to postpone the launch of 3G services would adopt strategy C, i.e., starting by providing internet access service only. With base stations mostly located in cities, these operators primarily sell PC data cards to business people to enable Internet accessing for notebooks.In suburb regions, where 3G signal is not available, services will automatically roam to the original GSM network. So the operators will not provide 3G mobile phone and voice services in the initial stage.
Operators adopting this strategy have a number of common identities: 1) they are market leaders with strong brands, and not afraid of rival operators trying to snap market shares away from them with 3G services. 2) Their 3G infrastructure development tends to be slow, with signals capable of covering only urban areas at the beginning. Business people do have requirements for mobile internet, but they care even more about the quality of voice communication. Therefore, the limit signal coverage for the voice service in the initial stage would offend them.
[+] Maybe everybody is a bystander
The one that's most likely to adopt the above tactics is New China Mobile. In view of the heavy workload of migrating hundreds of millions of subscribers to TD-SCDMA, and the possibility of revenue decline, it pays to be careful. Anyway, nobody has experience in TD-SCDMA. With confidence in the brand, many subscribers would rather wait for New China Mobile's 3G services than switch to other operators.
Therefore, New China Mobile might well be a bystander at the initial stage. Although 3G is a more advanced technology, it is hard for ordinary consumers to tell the difference from 2G (I have a 3G phone myself, but I use it only to make phone calls and send/receive short messages). Therefore, it would be hard to persuade them to switch to 3G in the initial stage.
Should other operators take the advantage of the time window in the 3G voice market left by New China Mobile to introduce their own services? Should they launch attacks with 3G systems and infrastructures that are more mature and easier to deploy, as well as 3G handsets and more affordable fee rates? Or should they join New China Mobile to adopt strategy C and be a bystander in the initial stage too?
There's one factor they must consider when selecting their competition strategies: where will their 3G subscribers come from? In our view, the 3G subscribers will come from: 1) their own 2G customer base; 2) the 2G customer bases of other operators; and 3) people who have never used a handset. The experience of 3G operators in Japan indicates that, for any 3G operator, most of the 3G subscribers would come from its own 2G customer base, with only a small portion from rival operators.
[+] The speed and the fee rates are the key
If operators do intend to migrate their 2G customer bases to 3G, there would be a peaceful market in the initial stage. As each operator is engaged in migrating its own 2G subscribers to 3G, no one would bother to launch an attack before it has had a strong foothold in the market.
As a matter of fact, each of these operators has more than 100 million subscribers to deal with. The one who completes all this first would take the lead in launching an attack. Therefore, the key to success would be speed, nothing else. Despite the strong brand of New China Mobile, which allows it the luxury of more waiting time, subscribers are realistic and impatient. They would switch to any other operator that offers the most favorable terms.
To retain existing subscribes and launch an attack toward other operators, the fee rate packages for voice services would be a powerful weapon. The advent of 3G has led to the emergence of a number of call modes: including 3G-to-3G and 3G-to-2G. As there are 3 different systems for both 3G and 2G, the situation could become more complicated. For example, a 3G subscriber of New China Telecom would call a 2G subscriber of New China Unicom.
With such a complexity, a compelling fee rate package would be helpful to retain and migrate existing subscribers while attracting new subscribers from other operators. As to whether it would reduce the revenue of the operator, there's no guarantee. Anyway, 3G is not something intended to help operators earn more.
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Prev : New Landscape in China's Telecom Market (3) Who's Gonna Be the Price Killer?
Next : New Landscape in China's Telecom Market (5) Fee Rates of 3G Services
- Today in History
New Landscape in China's Telecom Market (4) Dealing with Existing Subscribers is Key - 2008/07/06
Ultimate Mobile Device (3) Video, Storage, Copyright Management - 2005/07/03
Many telecom practitioners believe that mobile phone will become the "fifth media" in the age of 3G. But that won't come true without telecom practitioners' intended guiding.
[+] Looking for killer application
Is there any kind of service that can attract large group of existing 2G customers to upgrade to 3G? If this is the so called killer application, it barely exists for telecom operators, because no application can help them to rapidly attract a lot of 3G subscribers.
Many killer application services of this kind have been tried by 3G operators all over the world. For example, the European Hutchison Telecom who started to operate 3G many years ago mainly promoting video phone and mobile email services at the beginning. However, the growth of subscriber number was extremely slow.
In short, from the perspective of telecom operators, the only killer application to rapidly obtain 3G subscribers might only be the "lower voice service calling rate". For consumers, that is a simple and clear reason for using 3G. Once they use 3G phone numbers, they will start to use its value added services.
I joined one of large 3G operators five years ago and started to do 3G market planning. I used to hold high expectations on value added services. However, as time went by, I found out that there was no big difference between 3G and 2G (especially GPRS) value added services.
MMS and WAP have already been realized on 2G, not to mention SMS. Even the hot Instant Messenger (IM) service can also be realized without 3G. Those won't become the reasons for consumers to upgrade to 3G services.
The advantage of 3G is its speed that is faster than CDMA and much faster than GPRS. However, it is not enough to bring an essential difference, because consumers can hardly feel any speed difference when browsing WAP on the small screen of mobile phones.
[+] The possibility of the fifth media
There is an embarrassing situation for sales people. Imagine that if you are a sales person of a telecom operator, when you try to persuade a 2G customer to upgrade to 3G, you fail to answer the customer's question when asked "what's the major difference between the two services?"
The reason why 3G fails to attract a large number of subscribers through its value added services is that there is no major difference from 2G. The only difference: speed, however, is hard to be felt by consumers immediately. After purchase, customers usually will have only a slight feeling after some time. How can we sell this kind of product?
Eventually, our hope inevitably falls on several services that show evidently the speed of 3G: video telephone, streaming media and download. Applications including mobile TV, video on demand, music download, which consume large bandwidth can reflect the difference of 3G more evidently.
However, will consumers upgrade to 3G just by telling them that they can watch TV and listen to the music on 3G phones? Yes, they will. Some technology manic or first adopters will be tempted to upgrade to 3G. But those people only hold a very small market share. Most people will tell you that it seems to be never used to watch TV on the mobile phone.
Especially when they find out that the price plan of watching TV on the mobile phone is calculated by time, they will resist more apparently. The billing model that is quite natural for telecom operators (for example, billing in seconds) drastically violates the general payment habit for TV services: free or paying monthly.
Many telecom practitioners believe that the mobile phone will become the "fifth media" in the age of 3G. But that won't come true without telecom practitioners' intended guiding, especially with regard to the price plan. Monthly unlimited mobile phone TV service itself will arouse drastic arguments inside telecom operators.
[+] The way to survival for free WAP sites
It has been spread for a long time that telecom operators will act against free WAP sites. Each time telecom operators carry out a new policy, this topic is heated up again. Especially recently it is said that telecom operators plan to set the rates of their own WAP sites to be different from those of external WAP sites.
It is the common practice for telecom operators all over the world to "design and enrich their own WAP sites, keep users in their own walled garden, and make content providers bend their knees". Although free WAP sites are very hot, they fail to keep from telecom operators' threat.
To be honest, there is no relation between that market situation and 3G. I don't understand why some people think that such obstacles will disappear after China's entry into 3G. Telecom operators always keep their leader's attitude and control over subscribers and content providers regardless of 2G or 3G, don't they?
However, there is probably a market breakthrough point here. Never forget that China has a self-developed standard TD-SCDMA. Telecom operators who have obtained this license are relatively less aggressive (or will become so after suffering from market stagnation). It is possible for free WAP to collaborate with them.
Telecom operators' practice on WAP is called "The Walled Garden" in the industry. Users can enjoy enriched content services within the garden, but they can never go outside. The more powerful telecom operators are, the more they want to do so. Cooperation can only start from relatively weak operators.
The next phase of development is quite obvious for SP (Value Added Service Provider) or CP (Content Provider) and free WAP site operators. For example, videophone dating, mobile phone movies on demand or download, live music or download, etc. The content is becoming more and more important. As a result, many SP have started to integrate resources from the media.
[+] Conclusion: It's true that telecom operators will beg consumers to use 3G
My insights of 3G telecom services in the past four years can be concluded into one sentence: it is true that telecom operators will beg consumers to use 3G. Because there is no obvious difference between 3G and 2G, while the major difference can not be experienced immediately, the sales of 3G are very difficult.
The difference can only be experienced after a period of usage. However, sales people can barely wait users to gradually find out the difference, because they can not bear the slow sales progress. Thus, they are forced to attract users to upgrade to 3G with lower voice service calling rates first.
But users are more accustomed to use value added services on 3G than on 2G. Therefore, the fifth media is expectative. The point is whether telecom operators invest resources on user experience and services, and whether the design of rate plans fits in with users' expectations.
Finally, the key user group of 3G is labor workers in big cities in addition to residents (primarily students) in second-tier cities in China. Those people will bring large amount of WAP and streaming media usage. Of course, the elite people are the sales target, too. But the total amount of elite users can barely meet the demand of telecom operators.
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Prev : The Mist of 3G in China (3) Low-End Customers Are King Next : Web 2.0 Think Again (1) It's All about Relationships
- Today in History
The Mist of 3G in China (4) The Way to Survival for SP - 2007/04/22
Predictions on China Internet Market (8) War of Instant Messenger - 2006/04/23
3G Time Comes (7) 3G Is Nothing to Do with WLAN - 2003/04/27
3G Time Comes (6) Phones Don't Need to Be Smart - 2003/04/20
It's not wise for telecom operators to sell 3G only to the elite who are extremely small groups of the billion populations.
[+] The first stage of 3G in China
The previous articles by me are not to look down upon 3G value added services or to support the voice service. Instead, I am trying to point out that telecom operators are industrial leaders, what kind of strategies they will take on 3G decides in what kind of strategic thinking value added services will be placed.
An SP (Value Added Service Provider) probably can live on 3G with only millions of value added service users. However, for a telecom operator, it is far from enough if the number of subscribers attracted from value added services (which are the primary selling points of 3G) is just the same. The two points of view are different.
However, it is the general atmosphere to hold high expectations on value added services in China's 3G market. Including telecom operators, there is a stir of emotions in related industries including SP, CP (Content Provider), and even the Internet industry.
The common opinion is, in such a big market, not only can we define system standards, but telecom operators are also able to define mobile phone specifications. According to the successful 3G development experience in Japan and Korea, customized mobile phones can increase telecom operators' revenue by optimizing the user experience with value added services.
Therefore, at the first stage of China's 3G market, we will see a lot of TV ads promoting value added services, telling you that you can watch movies, listen to music, play games and access the Internet anytime anywhere via 3G.
With TV commercials, you will see the elite image of a middle-aged man in a nice suit that has a successful career holding a 3G phone; the cool image of young people watching movies or listening to music on 3G phones; or the touching image of family members seeing each other from the video phone.
[+] The second stage: use the voice service as the bait
The four telecom operators who will have obtained 3G licenses will boost value added services to a considerable height. As previously stated, operators who obtain WCDMA and CDMA licenses are based on the best interests of their own. While the operators with the TD-SCDMA license do so just because they do not want to believe their doomed fate.
With multi-functional and high-price mobile phones (probably the customized mobile phones provided by telecom operators), low-price data service rate plan (the voice service rate remains the same with 2G) and the TV ads promotion, 3G service will immediately attract a group of customers through its eye-catching value added services.
These users are just like the characters in the TV ads - business people and young white-collars. However, the number of that user group is limited and increases slowly. When the stacked mobile phones and value added services can't win more 3G subscribers, the loss from the price reduction of handset together with the telecom equipment amortization charges will drive operators mad.
Shortly after, the price war of voice service rates plans and mobile phones will start. The reality will stop us from dreaming. Do not forget that there are hundreds of millions of mobile phone users in China. Most of them are not elite or young white-collars. They don't want to understand 3G. What they want are immediate benefits.
But have 3G value added services been sentenced to death? No! The fact is that those 3G users attracted by the low voice service calling rates use value added services a lot! I conclude the 3G telecom operators' actual operating experience in the past four years as below:
- It's much faster to attract 3G users by offering low voice service rates plans than promoting value added services.
- To make up for the revenue loss from the voice service, operators have to highly invest on value added services.
- Even those 3G users attracted by low voice service rate plans will use value added services a lot.
- The premise is that user experience with value added services must be made good. Some degree of handset customization is inevitable.
[+] The outlook of China's 3G market
China's 3G market will show several features:
1) The 3G mobile phones with simple functions. Fully functional 3G phones may mean higher prices, especially for the TD-SCDMA system. To be simplest, a mobile phone that can make phone calls and support WAP is enough. Other functions such as camera, video, etc. can be left out at the initial stage.
2) Promote packages of low-price mobile phones and cheaper voice service rates plans (of course, WAP service rate is the key point as well), leading to a situation of rapid sales at cheap prices. It was difficult to do so several years ago, because the cost of 3G phones was still high and price reduction meant that telecom operators had to pay a lot of subsidy.
But when China's 3G market starts, the cost of WCDMA and CDMA 3G phones will be largely reduced. Bulk purchases by telecom operators will make the price even lower. With the help of smuggled mobile phones in this market, it is not difficult to buy cheap WCDMA and CDMA 3G phones.
3) Rapid sales at low prices means that 3G users will quickly turn to low-end customers, who are different from the elite or young white-collars in our imagination. Users of 3G value added services at this stage will be workers in big cities in addition to residents (primarily students) in second-tier cities.
Those people's standard of living is relatively low, so they can not afford high-end entertainment. They spend a lot of time in Internet cafes because that is the entertainment they can afford. Those who don't go to Internet cafes will use mobile phone WAP. They are willing to pay for value added services because a single mobile phone can meet their demands for communication and entertainment at the same time.
They are the primary users of 3G value added services, even though they adopt 3G services just because of the cheaper voice service rate plan! This is the outlook of China's 3G market in my expectation. It is not wise for telecom operators to sell 3G only to the elite who are extremely small groups of the billion populations.
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Prev : The Mist of 3G in China (2) TD-SCDMA is a Hot Potato Next : The Mist of 3G in China (4) The Way to Survival for SP
- Today in History
The Mist of 3G in China (3) Low-End Customers Are King - 2007/04/15
Predictions on China Internet Market (7) Web 2.0 Economy - 2006/04/16
How to Sell an Apple: A Classic Case of High-tech Marketing - 2005/04/10
3G Time Comes (5) Content - Killer App of Video Phone - 2003/04/13
Will we have a price war of voice service? The determinant is the persistence toward China's self-developed 3G standard: TD-SCDMA.
[+] 3G promoting model that best suits the benefit of 2G telecom operators
Let's look back to the competition strategies of telecom operators in the 3G market (figure shown as below). In conclusion, for those telecom operators who already have GSM or CDMA 2G subscribers, the most beneficial tactics for them are as below:
- Focusing on the deployment of 3G base stations on metropolitan areas, and doing small-scale deployment in suburban or rural areas at the beginning. Because WCDMA or CDMA 3G systems are easily compatible with 2G, subscribers can roam seamlessly on the 2G network in those areas where no coverage of 3G signal is available. Therefore, the cost for telecom operators is relatively low.
- In order to ensure that revenue is not affected when the existing 2G subscribers upgrade to 3G systems, operators will set the 3G voice service calling rate the same as or similar to 2G. Since this part is still the primary revenue of telecom operators, it won't affect much even if their 2G subscribers transfer to their own 3G systems.
- Because the voice calling rates of 3G and 2G are similar, the price plan for 3G mobile Internet service (data service) is largely reduced in order to differentiate from 2G as a selling point. Operator focus on the promotion of value added services together with multi-functional high-end mobile phones, targeting the metropolitan white-collars with higher incomes.
- Since the increase of 3G subscriber base is relatively slow at the beginning, the market will gradually expand to suburban or rural areas, 3G base stations spread to those areas and the price of 3G phone reduce. To prosper sales, telecom operators will consider to offer packages with reduced voice service calling rates.
Here comes the question, if as stated above, telecom operators who already have 2G subscribers do not hurry to sell 3G by reducing the voice service rate, how come the price war happens in China's 3G market? The determinant is the persistence towards China's self-developed 3G standard: TD-SCDMA.
[+] Is TD-SCDMA a killer or a lamb to be slaughtered?
The European 2G operators were not so familiar with the above concepts when they first obtained their 3G licenses. But as time went by, they more and more adopted the above concepts towards 3G. Almost all of them took the strategies in B, C and D segments when they started to promote 3G.
Even Hutchison Telecom, the so called "pure 3G system" who had no 2G subscribers, believed that value added services were the shining points of 3G. They tried to attract consumers with high-end mobile phones and various value added services when they started to promote 3G. But they encountered the dilemma of slow increase of subscribers.
Because of their "pure 3G" feature, the deployment of base stations had to start from scratch and was not able to be very comprehensive. Therefore, even the signal coverage in metropolitan areas was not good at the beginning. Consumers attracted by TV ads regarding 3G value added services bought 3G mobile phones. However, their complaints about the unstable signals did not work at all.
Afterwards, Hutchison signed roaming contracts with other 2G operators, allowing subscribers to roam on other operators' network when there was no 3G signal coverage. In order to obtain more subscribers, Hutchison started to promote by reducing the voice calling rate together with low-price mobile phones (with the high cost of handset subsidies). The number of subscribers thus started to increase rapidly.
We learn a lot from Hutchison's lesson. In conclusion, "It is very tough for telecom operators who have no 2G systems or subscribers to promote 3G." Look back to China's market, who comes into your mind from the story of Hutchison? The answer is the ones who will have obtained TD-SCDMA licenses.
The system of TD-SCDMA is incompatible with GSM or CDMA. The deployment of its base stations has to start from scratch. The cost is huge if the same level of coverage as 2G is offered at the very beginning. However, consumers who have already been accustomed to the coverage level of GSM will not forgive "the poor signal of TD-SCDMA".
[+] Market competition will inevitably drive the price war of voice service
In China's mobile communication market, when asked "which telecom operator's signal is poor?" I believe you will speak out the name of some operator without hesitation. Consumers' impression is appalling. It is hard for telecom operators to change their images once they have been put on some labels.
Since the system is brand new, telecom operators with TD-SCDMA licenses will inevitably carry out a lot of system and terminal optimization work during the commercial operation. As an early 3G practitioner, Hutchison used to spend many years in optimizing its system. The process of optimization will strengthen consumers' impression of "poor signal".
These problems, however, do not all exist in WCDMA and CDMA2000 systems. There are lots of telecom operators working on these two 3G systems worldwide, who have accumulated abundant experiences. In addition, the global-scale production reduces the average cost of the 3G mobile phones of those two systems, so that they can be sold cheaper.
From the consumers' perspective, the signal would be poor, mobile phone would be expensive and there would be many bugs in the early stage of TD-SCDMA. Telecom operators would not be able to attract consumers rapidly, although they spend huge amount of investment at the beginning. Finally, it would become inevitable to provide low-price mobile phones without value added services and to promote lower voice service rates.
This is the reason of the price war of voice service during the initial stage of China's 3G market. The starters of the price war, however, are those telecom operators who will have obtained TD-SCDMA licenses. Operators with other 3G system licenses will not respond to the price war in the initial stage. But in the long run, it's difficult for them not to be affected.
The second mist of 3G in China: who is the first largest user group of 3G? Many people would answer without hesitation: "metropolitan young white-collars". Is it true or false? I will say: the answer is workers and students with low income in cities instead.
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Prev : The Mist of 3G in China (1) 3G Makes No Profit Next : The Mist of 3G in China (3) Low-End Customers Are King
- Today in History
The Mist of 3G in China (2) TD-SCDMA is a Hot Potato - 2007/04/08
The Mist of 3G in China (1) 3G Makes No Profit - 2007/04/01
Predictions on China Internet Market (6) Community Services - 2006/04/09
Media, Community, and Blog (5) The Power of Media - 2005/04/03
3G Time Comes (4) Video Phone - the Killer Application - 2003/04/06
It's all about a brutal fact: consumers do not have demand for 3G.
[+] How to sell 3G faster in China?
In the late 2006, I gave a 15-minute presentation in Beijing on the development of 3G at the Second Conference of Telecom Value Added Service Collaboration and Trading. Due to the time limit, I started with asking around 200 value added service providers on the spot the following question:
"There could be two selling models when telecom operators are going to sell 3G mobile phones and service rate plans to consumers. One is to tell consumers that using this kind of phone they can save 30% voice call expenses than before. The other, however, is to tell them that many value added services are provided for this kind of phone.
I then asked, "Which way do you think will sell the 3G phone faster?" What surprised was that all the service providers agreed unanimously that the second model would sell faster. It can be seen that even service provider are still in the mist of 3G, it is not surprising that the 3G market in China is becoming more and more unclear.
The fact is the first model sells faster, and much faster. I agree that value added services are the shining points of 3G. However, it has been proven unrealistic from previous experiences for telecom operators to attract 3G subscribers through value added services.
Because through that selling model, the increase of the subscriber base is so slow that telecom operators feel desperate to recover from their billion dollars investment in the foreseeable future. The intense pressure will eventually pull telecom operators out from the dream of value added services. Thus, it is unavoidable to promote 3G by reducing the voice calling rate.
It's all about one brutal fact: consumers do not have demand for 3G. To be more specific, they don't know and don't want to know what 3G is. What they want are immediate benefits. The benefit of "cheaper voice rate plan" is much more immediate than that of "more value added services".
[+] The First Thing of 3G in China: Price War of Voice Service Rate
The second brutal fact of 3G is: for telecom operators, 3G makes no profit. If consumers do not have apparent demand for 3G, telecom operators have to beg consumers to use it. After using various methods to reduce prices, they will ask themselves: why not make money on 2G instead of being stuck in the mud of 3G?
We have a great myth of 3G: "3G can increase the proportion of value added services in the revenue of telecom operators." The conclusion is correct, but neglects the real reason leading to the result.
The revenue of voice services will definitely drop down when telecom operators try to promote 3G by reducing the voice calling rate. Thus, the proportion of data-oriented value added services will certainly increase. The question is: does the overall revenue of telecom operators increase? No.
Because telecom operators have been stuck in the price war of voice calling rate during the promotion of 3G, they have to develop 3G value added services in order to complement their loss of voice service revenue. Inevitably, value added services become the shining points. That is the true process.
Why does the advent of 3G in China start with a price war of voice service? In addition to the price reduction resulting from consumers' insufficient demands for 3G, when we look into the possible 3G promotion strategies of various telecom operators, we will find out that the price war of voice service is inevitable in China.
The following figure is the common market segmentation adopted by telecom operators when promoting 3G. Among them, B, C, D are the common strategies taken by those operators who already have GSM or CDMA subscribers. It is easy to see that those operators try to sell 3G to heavy users of value added services without reducing the voice calling rate.
[+] Existing 2G Telecom Operators Benefit A Lot from Upgrading to 3G Systems
Why those telecom operators are not willing to promote 3G by reducing voice calling rates? Because they have a lot of 2G subscribers, if doing so, they will lose profit if their existing 2G subscribers transfer to the cheaper 3G service.
This kind of telecom operators all set the same voice calling rates for 3G as 2G. They only reduce the rates for value added data services. It is easy to imagine that when China Mobile obtains WCDMA or China Unicom obtains CDMA 3G licenses, they will take the above strategy in order to retain their income from 2G subscribers.
Expensive mobile phones with many functions and various value added contents are for metropolitan residents with high incomes. While the 3G Data Card with faster Internet connection speed is for business people. Value added services will become the shining points of commercial films on TV.
Of course, the penetration rate is comparatively low with the high price mobile phone terminals. However, telecom operators of this type are not worried at all because they can still make a lot of money from the existing 2G subscribers every month. Operators can take slow steps for 3G promotion, while putting emphasis on value added services.
As a result, 3G subscribers of the telecom operators of this type often directly upgrade from the existing 2G subscribers. They seldom grab 3G subscribers from other operators. The deployment of 3G base stations could start from metropolitan areas. Subscribers can roam seamlessly on the 2G network in suburban areas where 3G signal has no coverage.
This is the advantage for GSM/CDMA operators to upgrade to WCDMA/CDMA 3G systems. Operators may take their time to deploy 3G base stations. There is no need to worry about subscribers' complaints about bad signals. The 3G mobile phones of WCDMA and CDMA have been sold at a relatively low price over the years. But how about TD-SCDMA, the 3G standard of China?
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Prev : The Fourth Generation of Internet Marketing (3) IM Marketing Next : The Mist of 3G in China (2) TD-SCDMA is a Hot Potato
- Today in History
The Mist of 3G in China (2) TD-SCDMA is a Hot Potato - 2007/04/08
The Mist of 3G in China (1) 3G Makes No Profit - 2007/04/01
Predictions on China Internet Market (6) Community Services - 2006/04/09
Media, Community, and Blog (5) The Power of Media - 2005/04/03
3G Time Comes (4) Video Phone - the Killer Application - 2003/04/06
WiMax will eventually engage with 3G in the field of voice communication.
[+] The declining communication revenue
Imagine this: you will be able to make mobile phone calls for unlimited minutes so long as you pay a fixed amount of money each month; if you want to watch a movie or download music or use other value-added services, you pay additional charges, but there's no such costs as communication fee or transmission fee any more.
For telecom operators, this is a nightmare. No more are the good days of waiting for subscribers to make phone calls and printing phone bills calculated on talking minutes. They now have to earn their meals by providing sufficient contents. But that is too troublesome and not the specialty for operators. Worst of all, they will have to share money with content providers.
This is what's happening to your phone line at home. For an ADSL line, the telecom operator is able to charge only two types of fee: the lease for the line (including voice and data services) and the Internet access fee. Both are almost fixed each month.
If, instead of dialing traditional phone calls, you use the line only to dial Skype VoIP calls, you will be able to use both the Internet and the voice services with that amount of monthly payment. Eventually, telecom operators will have to sell IPTV to you to look forward to earning more through contents.
Yes, wireless bandwidth resources are limited and incomparable with the cable broadband. But who can say that some kind of a novel technology will not appear in the future to change all this? After all, consumer demands are always there and the amount of bandwidth that a consumer can buy with each dollar has been on the rise over the past years.
[+] The unpredictable future of WiMax
In the field of 4G, a concept which is not even clearly defined so far, players are already fighting for the ability to set the standards. Thanks to the promotion of Intel, WiMax has got the support of many telecom equipment suppliers and handset manufacturers, and is now the hottest bidder for the 4G technology.
Intel is going to embed WiMax into its notebook computers, in a hope to get the popularity that WiFi once had. Despite the slower-than-expectation progress, the ambition of the giant should never be ignored. In addition, Nokia has also got into the line of supporters, announcing its plan of introducing WiMax handsets.
However, in view of the current status of 3G services around the world, WiMax, which claims to be 10 times faster than 3G, is really in an awkward position. As 3G has been in commercial use for only a few years, mobile operators who are yet to retrieve the return of their investments are really hesitating about making additional investments in WiMax.
A more possible solution is to issue licenses to fixed-line telecom operators or emerging mobile operators and allow them to build WiMax APs. As a matter of fact, struggling to stem the multi-year decline in revenue, fixed-line operators have been longing for accessing the mobile market for many years. For them, WiMax could be an opportunity.
When mobile operators have little interest in WiMax, a fallacy has appeared in the market, holding that WiMax is a complementary service, instead of substitute of 3G. This has rendered wider imagination for WiMax, particularly in the China market, where 3G has not been launched yet.
[+] 3G and WiMax: foes, not friends
The two services are considered by some to be complementary because the priority of 3G is the mobile voice communication, while WiMax, with its advantages in data transmission, can provide notebooks with the Internet access. In this regard, mobile operators could build two types of network to separate the services: "3G serves people on feet, and WiMax serves people on seats."
In Korea, dual-mode handsets supporting both 3G and WiMax are already available in the market. It seems possible for both to co-exist peacefully? However, we see now that the two technologies are born to fight each other to death and there could never be such a thing as complementation for each other in the real market.
First of all, if fixed-line operators get the WiMax license, they will use the data transmission capability of WiMax to provide wireless VoIP services, which is bound to dig a portion of subscribers away from mobile operators. With so many world-leading suppliers involved in the development of WiMax handsets, the supply of terminal devices will not be a problem sooner or later.
It is reported that the data transmission cost of WiMax is only one tenth of that of 3G. Maybe the WiMax community led by Intel is too optimistic. But if it were true, the fee rate of WiMax-based VioP could be as low as one tenth of that of 3G too.
If the operators that have got the license forget the fact that the number of mobile phone subscribers is far larger than that of notebook users, and only plan to provide Internet services to notebook or PDA users with WiMax, then they must be crazy. WiMax will definitely engage with 3G in the field of the voice communication.
[+] Mobile phone flat rate with unlimited minutes
Were WiMax to appear a little bit later, the follow-on versions of 3G might have the chance to provide larger bandwidth and a more comprehensive IP environment; or, in plain words, a 4G network environment upgraded from 3G might be able to provide the VoIP service, thus render WiMax unnecessary?
Could VoIP all-you-can-eat monthly flat rate become a reality in the 4G time? It will have to depend on how low the transmission cost is. Even if it is low enough, the 4G-based VoIP service might still be charged by minutes in the initial stage. Operators will not withdraw to the bottom line of monthly flat rate at once, so long as the fee rate is acceptable to consumers.
Yet for 4G Internet accessing for notebooks, which does not go through a phone number, operators might consider to offer monthly flat rate. Although 4G is a comprehensive IP environment, operators might still want to separate the Internet access from the voice communication after taking into consideration the reality in the marketplace.
However, there's one thing uncertain here. Today, WiFi handsets with embedded Yahoo! Messenger or Skype are already available. Such handsets will be supported in the 4G wireless network too. With such handset and access to the 4G network of an operator, consumers would be able to make phone calls free by only paying the monthly fee.
Such handset might not have their own phone numbers, or would have to go through troublesome procedures (e.g. SkypeIn) for the numbers, or might encounter the containment from telecom operators. But anyhow, the competition is there and operators have no way to pass it by. It will eventually drive 4G VoIP toward the destiny of monthly flat rate.
The trick is that if 4G really offers monthly flat rate, it will deprive Skype of its room of survival on the mobile terminal. How could Skype, a service that depends on consumers' hunger for lower fee rates, expect to survive any longer once the mobile phone service is as cheap as what monthly flat rate offer?
To be able to make free phone calls has been the dream of mankind, and unintentionally become the driver for the evolvement of the communication technology. Telecom operators who depend solely on the switching of phone calls or transmission of data for their income would face severe challenges sooner or later. They will have to transform into service providers with diversified abilities.
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Prev : Great Future of Wireless Broadband (3) Scarce Resources Next : The Fourth Generation of Internet Marketing (1) RSS Marketing
- Today in History
Great Future of Wireless Broadband (4) WiMax, 3G and 4G - 2006/12/03
Internet and Books (1) Dilemma of Online Publishing - 2005/12/04
VoIP (2) Who Depends on Whom - 2004/12/05
VoIP Gives out the First Cry - 2003/12/07
Ubiquitous Access is what people really want.
[+] Living in the largest wireless broadband city in the world
Imagine this: you are living in a city where you can access the Internet through WiFi from 90% of the city area, where you can receive signals from access points whenever you turn on your notebook. Doesn't it sound great?
In early June of 2006, Taipei was awarded "Intelligent Community of the Year" by the Intelligent Community Forum (ICF) of the World Teleport Association (WTA). In the meantime, the world's WiFi hotspot authority JiWire announced that Taipei's city WiFi network was the largest in the world.
While most other cities around the world are just beginning to build their city WiFi networks, the wireless access points in Taipei has already covered 90% of the city's population. It will take other cities at least one and a half to two years to keep up with the pace of Taipei.
Taipei city government does not pay a cent for the project. All the wireless access points in the city are built by outsource contractors, who are allowed to retrieve the return of their investments from follow-on service charges. Most other cities in the world also follow this model in designing their wireless city blueprints.
I bought my first notebook computer in September and was excited when I read the news. Thank God I am a citizen of this great city. I immediately applied for a NTD 400/month package, dreaming about the freedom of accessing the Internet anywhere, anytime.
[+] Real life and experience about the wireless city
The first problem I encountered was no signal available in my office, which was on the 8th floor (surprisingly, the office of the outsource contractor responsible for the access points deployment was at the 9th floor of the same building). Among the so many access points, which allegedly covered 90% of the population, none was detectable. Carrying my notebook, I walked down the stairs and finally got signals on the 4th floor.
Later, I learnt that, as the access points were installed on lamp posts, trees, and telegraph poles, it was natural that the signals were unavailable at high floors. Yet while I was able to access the Internet at the side facing the street on the 4th floor, the signals vanished again when I moved to the farther side of the same floor.
Already accustomed to the ubiquitous availability of mobile phone signals, I was surprised. As a consumer who spent NTD 400 each month on the service, I didn't feel it was normal that I should "cooperate" with the technical problems of contractors, and find a way to access the Internet myself.
Later I figure out that it'd better to use wireless networks precisely according to the instructions in the user manual offered by service providers: sitting right at Starbucks outlets below the second floor, beyond which, there's no guarantee for signal availability.
Many people would argue that nobody really carries a notebook computer and walk around, and being able to access the Internet from a cafe is good enough to meet most people's needs. They do not understand for sure that what consumers need is the freedom for ubiquitous access.
[+] Wide area wireless network is the future
Having experienced the setbacks of the public WiFi, I realize that the Wireless Wde Area Network (WWAN) is what consumers really desired. Trying to use WiFi, a technology designed for local areas originally, in wide areas and making patches here and there are just like to have a mall kid behind the steering wheel of a big car.
Please note the word I used: desire. Now that the Internet is already an integral part of people's life, they will not tolerate such a defective wireless Internet service, on which they spend money.
I also think about applying for the 3G wireless Internet service, which has been available in Taiwan for many years. Plug a 3G wireless PC card, which you can get from any telecom operator at an affordable price into your notebook and you will be able to surf the Internet. What holds me back is that the cost for the monthly package is twice as much as the amount of a public WiFi package.
For 3G telecom operators, that is a right pricing strategy. Although in theory, the speed of the WCDMA technology is only 384k, far slower than that of WiFi, the signals are ubiquitously available. I once tried the 3G link on a highway and did not encounter any single disconnection for two hours.
Due to the wide signal coverage, the service with a much slower data rate can be sold at a higher price. I finally realize that the ubiquitous access is what people really wanted. Consumers are willing to pay for additional freedom, but the public WiFi is facing severe challenges from other WWAN technologies.
[+] Too few subscribers
Despite the alleged 90% population coverage, Taipei, the so called "the largest WiFi city in the world", has as few as 40,000 subscribers for its WiFi service. For contractors who have spent so much time and money on the construction of wireless access points, the miserable income is pushing the day of profitability even farther beyond the horizon.
Many discussions are focused on the high service fee, which has diminished the infiltration rate of the service. However, compared with the fee rate of local ADSL, WiFi is not really expensive. There are also arguments that, due to the scarcity of wireless applications, consumers have little interest in it.
Both arguments, however, only touch the surface of the problem. The real problem is not the slow increase in the number of WiFi subscribers, but our over high expectation, which has led to the wrong market positioning, and all those follow-on problems.
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Prev : The Web 2.0 Revolution (10) the Big Future of Web 3.0 Next : Great Future of Wireless Broadband (2) Public WiFi is Not Enough
- Today in History
Great Future of Wireless Broadband (2) Public WiFi is Not Enough - 2006/11/19
Great Future of Wireless Broadband (1) Living in the WiFi City - 2006/11/12
Google's Choice (1) Lessons for Portals - 2005/11/13
A Word of Advice for Small Online Stores - 2004/11/14
Compete against the leader with further customer segmentation in the crowded market.
[+] The income from the coummunication service nurtures a community
Today, online communication services mainly include the earliest services, such as email and instant messenger (e.g., QQ and MSN), and the follow-on VoIP messenger (e.g. Skype) and P2P file transmission (e.g. BitTorrent).
When we review the figure raised by me which shows the community profit model, we can see that, in addition to the advertisement, the communication service revenue is also a key component of the Web 2.0 profit model.
Some companies started their business with free communication services and made profits from community services later. For example, Tencent QQ, the number one instant messenger service provider in China, develops its business operation from the right circle of the above figure to the left one, while those who ran free community services at the beginning have to depend on communication services, for example, the wireless value added service like SMS to make a profit. In this case, their business moves form the left to the right of the above figure.
From communication to community, or the other way round, it seems that those are two conflicting concepts. As a matter of fact, there is no conflict at all. The key lies in the “heavy user” I mentioned in previous sections. Users of the community service must be the heavy users of the communication service.
[+] Iron rules for the profitability of the communication and community service
Most QQ users, as instant messenger service subscribers, do not want to pay. Yet those who are willing to do so are just in its communities. The purpose of QQ Show, a community service based on QQ subscribers, sells virtual items to those heavy users. In other words, the iron rule for the profitability of the Internet-based communication and community service is:
“A% of the users of the communication service (most of them use the service to communicate with acquaintances) use the community service (and are willing to communicate with strangers), while B% are willing to pay for a greater rights to show themselves, including buying the larger storage, virtual items and wireless value added service.”
For both the communication service (among acquaintances) and community service (among strangers), there is another possible profit model: VoIP. For services like QQ, the VoIP service call to a landline of mobile phone could prove to be a revenue source just like Skype, although the policy in China is still not clear at the present time.
For community services, the simplest profit model is making friends via VoIP service. It is a brand new field, where a lot of models could be tried. For example, eBay, which has merged Skype, is trying to introduce the VoIP service into its auction service. To make profits out of VoIP services will become an important trend for community services.
[+] Unshakable leadership of QQ
Compared with the community service market, where numerous Web 2.0 companies are involved in the fierce competition, the instant messaging service sector has another landscape: the leader is far too strong to be shaken. The following figure shows the market share of the leading instant messenger commonly used in China.
With its admirable achievements during the recent years, Tencent QQ has proved to be unshakable, leading MSN Messenger, even the nearest competitor, by miles. It is remarkable that China’s Internet market is still witnessing fast growth of the subscriber number; therefore QQ has far better ability to attract new users than its peers obviously.
It is a characteristic of the instant messenger. Most users will follow their friends or acquaintances to choose the same instant messenger, producing a “Member Gets Member" effect. Eventually, the strong gets stronger.
However, the so-called “friends and acquaintances” is only a relative term. An Internet user might get into an environment, for example, the office where all those around use MSN Messenger, instead of QQ. In fact, MSN has been a favorable tool for office workers. Maybe that could be an opportunity.
[+] Instant messenger for making friends
The following figure lists the purpose of using instant messenger. Notably, 83.8% of the users use the service to communicate with friends and family members, proving my statement that “the communication service is used mostly among acquaintances.” That turns out to be an unshakable advantage for QQ, as most of the acquaintances of a person are using it.
Then there are 61.6% of the users use the service for job-related communications, which is the base of MSN, as well as a field that Tencent is trying to infiltrate. Although the proportion of QQ-loving young students has been on the rise during the recent years, they will get a job sooner or later, and then they would switch to MSN. That is an intolerable loss for Tencent.
Surprisingly, as many as 42.3% of the users wish to make new friends, i.e., get to know strangers through instant messenger. Let us ask ourselves this: among the 10-plus instant messenger brands, which one has the most powerful ability to “enable users to make new friends fast”?
If the answer is still QQ, it would render QQ almost invincible! If the answer is not so definite, there might be room for those instant messenger which position themselves as a “powerful friends-making tool” in this market. Let us wait and see which one will be the best.
[+] Compete against market leader with new market positioning.
We should not forget what we have discussed at the very beginning of this series: there is still a growth room of 60 million subscribers expected in China’s Internet market, for which every Internet company is posed to take a bite. What, then, is the profile of that group? My simple answer is: female subscribers.
Male subscribers have been the dominating force of the Internet market in China. However, with the saturation of the market, the proportion of female users will rise. Companies that cater for the taste of female subscribers (who have particular preference for beautifulness, artistic conception and feeling) will be able to control the steering wheel in the next round of development.
The market positioning, be it “special for office”, “special for making friends” or “special for lady”, is just an attempt to compete against the market leader through re-segmentation. The previous problem with the instant messenger market is the over-similarity of the functional positioning of every brand, which leaves users little impulse to change their service providers.
Besides, we can see that 42% of the IM users use the service to save their phone tolls. Obviously, to save the long-distance phone call expense is a great enticement and great enough for IM venders to add in the VoIP functionality.
[+] A large user base could be the core competence.
When Microsoft starts to beef up its MSN Messenger in China and Google announces its strategy to stride into this market by relying on Google Talk, Tencent start from a IM service provider, is continuing along its path of diversification to dig deeper in the fields of online game, eCommerce and even portal website.
Maybe the question should be asked this way: “if you were Ma Huateng, the CEO of Tencent, held 400 million QQ users in your hand, what would you do? Would you just let them chat to death?” For me, the answer is self-evident. I do not think there is anything wrong with Tencent’s diversification.
In the contrary, as I have stressed repeatedly, community service users are heavy users. Please remember it! Thanks to that characteristics, QQ users have greater interests in shopping, are more deeply addicted to online games and show higher usage rates of other online services than general Internet users.
From another viewpoint, we can see that, it is because of its huge user base that Tencent has been able to surpass the original leaders in many fields in the shortest time possible. When QQ is no longer the synonym of the instant messenger alone, the leadership of Tecent will be extremely hard to shake.
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Prev : Predictions on China Internet Market (7) Web 2.0 Economy Next : New Era of Online Advertising (1) from Media to Channels
- Today in History
The Mist of 3G in China (4) The Way to Survival for SP - 2007/04/22
Predictions on China Internet Market (8) War of Instant Messenger - 2006/04/23
3G Time Comes (7) 3G Is Nothing to Do with WLAN - 2003/04/27
3G Time Comes (6) Phones Don't Need to Be Smart - 2003/04/20
Is Windows more difficult to operate than a household appliance? I don't think so.
[+] A requirement for universal user experience
Let's look closely at the development paths of the major mobile devices. The first type we think of is PDA. Since its first appearance as an "electronic business notepad", the device has taken a road toward the smart phone. In an effort to break away from the limitation of the business market, it is leaning toward another end: entertainment, which makes it more like PMP (Portable Media Player).
In addition to traditional PDA functions, the PMP-like model also enables movie playing and offers larger memories. You can get more information on this model of Palm, one of the leading PDA manufacturers at: http://www.palmone.com/us/products/mobilemanagers/lifedrive/
The history of the mobile phone is known to everyone: integrating a number of functions, from the camera, PDA, to MP3 player. To avoid extinction, MP3 player manufacturers are beginning to produce PMP to develop into a higher end market.
While the mobile phone is developing toward the featured game console functions, the game console manufacturers are eroding the PMP market by offering built-in media playing functions; as a counter-attack to the handset manufacturer, the digital camera is providing built-in sending/receiving Email functions. Follow the trend, the portable digital camcorder will be the next target of the integration into mobile phones.
Predictably, future terminals will fall into two major categories: the handset-oriented terminal with generic all-in-one functions, and the featured non-phone device that offers professional functions for hardcore players.
With such a diversified portfolio of terminals, a more important topic is surfacing: is a universal user experience needed for the increasingly numerous kinds of mobile device?
[+] "Windows experience" is the mainstream user experience.
In the future, one person could have a number of terminals at the same time. Even if all-in-one units would become pervasive, it is also possible that such products become fad items and consumers change one every half year.
The key to save the trouble of learning how to use so many kinds of terminal device each time is the user interface. If all devices could share a similar operating method, they would be much easier to use, and the device replacement frequency would increase substantially.
That is why a universal operating system is necessary for every mobile device. Traditional mobile phones do not have many complicated functions. Making phone calls, sending short messages and checking phonebooks are what most people expect from them. However, when many functions are integrated into one device, it is important to provide universal user experience.
Although it is hard to sense or describe, the importance of an easy-to-use interface and consistent user experience has significant weight in the heart of consumers. As a result, some operating systems or mobile devices brands would prevail over time.
When it comes to the integration between the Windows-based IT products and the consumer electronics, a common argument is the latter should be easier to use. However, Windows-based products are not so easy to use, therefore not fit for the "household appliance mindset".
Although there is still room of improvement for the Windows interface on mobile devices, Microsoft's idea of extending the competitive advantage of Windows to mobile devices is frightening from the viewpoint of "extend the user experience".
Most of us have the experience of using household appliances, and the majority of those between 15 and 45 years old also have the experience of operating a computer. "Windows experience" today could be seen as the mainstream user experience, which is comparable to that of watching TV. Obviously, that is a force no one could afford to ignore.
[+] Integrated user experience of digital home appliance and mobile device
In addition to its own diversified functions, an ultimate mobile device might be used as the remote controller for other household appliances. In fact, with mobile phones, remotely controlling toy cars or transmitting music files around the house through wireless means, such as Bluetooth and WLAN, are applications already in development.
That means the communication between mobile devices and household appliances is becoming more and more frequent. In the past, the method of operating a TV set or an audio system might vary substantially from brand to brand. The user interface of Brand A might differ from that of Brand B, even though they are the same type of product.
However, to realize the dream of digital home, allow dozens of digital appliances and their control center: the computer to communicate smoothly with the mobile phone, and reduce the complexity of operation, it is extremely important to provide consistent user experience.
In today's market, Microsoft is the only one capable of providing such user experience, from household appliances to mobile devices, and the software giant is working on its way toward that goal. The effort may seem fruitless in the short term. Yet compared with other rivals in this field, that might prove to be a real competitive edge.
In a market with hundreds and thousands of competitors, there might easily be calls for a leader. However, will the mobile terminal industry and digital home industry end up to be another IT industry, which has a very thin profit margin because manufacturers struggle under the heavy burden of license fee for the operating system? Let's wait and see.
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Prev : Ultimate Mobile Device (4) Email Service Anywhere Anytime Next : What to Invest When It Comes to Internet Business?
- Today in History
From Idea to Business (2) How to Estimate Your Income and Cost? - 2007/07/22
New Era of Online Advertising (2) from Exposure to Deal - 2006/07/23
Ultimate Mobile Device (5) Universal User Experience - 2005/07/24
