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Sunday, 04 March 2007

Comments

Tomi T Ahonen

Hi Dennis, readers of the Technology360 blog and commenters here, John and VV.

Thanks for mentioning my blog posting. I wanted to respond specifically to John's and VV's comments here.

John - thank you, and obviously my purpose in writing that blog was to reach people like you, and hoping to get people interested in this emerging new media. I'm very happy it invoked new insights in you.

VV - I hear you, and its a valid position. Perhaps you are observing mobile telecoms from an American viewpoint? While cellphones were invented in America, they were first commercially launched in Japan and America never regained the leadership in this technology. So its not surprising that many American experts still doubt the ability to generate addictive and compelling experiences. But allow me to address addictive and compelling.

Blackberry. No doubt all people following the IT industry or telecoms or e-mail or wireless knows Blackberry and how its often called the crackberry by its users, for its addictive nature. Arguably its the most addictive new technology used by adults in America? But launched in 2001, and having reached about 5 million subscribers worldwide by 2006, Blackberries are less than one third of one percent of all cellphones.

Not that its "an expensive smartphone" - Nokia's Communicator series (consistently the world's most expensive smartphone or PDA for 8 years since its launch in 1997, has outsold Blackberry every year since Blackberry's launch by at least 3 to 1) is a 1000 dollar smartphone and outsells Blackberry. Smartphones as a class sold 80 million units last year, so why is the "most addictive" device not in the pocket of every executive in the world?

As a British executive what is his most used, most valuable communication method, and you may think your question was accidentially answered by a teenager. Over 80% of British business executives will reply "SMS text messaging" Not Blackberry, not e-mail (nor voicemail nor voice calls). Yes, this pattern holds all around Europe and Asia and Australia and Africa, and starting to be true also in Latin America. If Blackberry is addictive, SMS text messaging is actually much MORE addictive. That is why the American executives - who never had cellphone based messaging before - fell in love with the "mild drug" ie Blackberry, but European and Asian execs have already been exposed to the much more potent drug (SMS text messaging) and now they will play with a Blackberry with mild amusement, but not fall in love with it. Because of this, Blackberries in all markets apart from America, have failed miserably.

Can mobile be addictive, absolutely, But don't take my word for it. Now there are plenty of academic scientific studies on addiction and the cellphone and SMS text messaging. The first to report was the Catholic University of Leuwen in Belgium in 2004, which found that SMS text messaging is addictive. The only service on phones that was. A follow-up study at the Queensland University of Australia found that SMS text messaging on cellphones was as addictive as cigarette smoking, and twice as addictive as any service on the internet.

Yes, it can be done. But you probably have not been exposed to addictive and compelling services yet. Mind you, SMS is the most personal digital communication ever, the fastest (by throughput) communication ever and the most secretive (confidential) communication system in existence. Do you think American bankers, lawyers, CEO's etc appreciate faster communication, and something that is more confidential (secret) than e-mail and also is less prone to intercept (as e-mail is by snooping secretaries, colleagues, wives, kids, etc). SMS is addictive, there is no going back. Even Americans are getting it, according to latest CTIA stats, already 43% of American cellphone users have started to use it, and that mirrors well the UK stats from about 5 years ago.

But lets go beyond SMS. You can probably grant me that iTunes is a success? Or that MySpace is a success? or that YouTube is a success? Well, if we as an industry, build the mobile service proposition right (including handsets, networks, applications, content, AND prices) - then we can do better than iTunes, MySpace AND YouTube.

South Korea is the world's most advanced digital society. The first country where all internet users had migrated already to broadband, they now sell 100 Mbit/s speeds and are rolling out gigabit/s broadband by early next year. To add insult to injury, Korea's broadband prices are the world's lowest. The same is true of 3G cellular. South Korea has jumped ahead of Japan and today has the highest penetration of 3G cellphone users at nearly 70% (world average is 8%, America is at 5%) and 99% of cellphones in use being cameraphones (world average is 45%, America about 30%). The same true of digital TV, IPTV, broadcast digital TV to portables, etc etc etc.

So can we build a compelling media concept for cellphones. Examine Cyworld in South Korea. Cyworld is a digital online social networking service for mobile and broadband.Today Cyworld is used by 96% of its target audience (teenagers). But it has moved totally beyond its youth audience, and today is used by 43% of ALL SOUTH KOREANS. Consider MySpace. Of its about 100 million members, about 65 M are Americans, the rest are international users. So MySpace is used by about 22% of the US population. So you like iTunes? iTunes sells in several dozen countries. But Cyworld also sells MP3 files and digital music, but only in South Korea (population 50 million, one sixth of the USA).

We all know iTunes is the world's biggest online digital music site. But the worlds' second largest? Yes, Cyworld. In South Korea 45% of all music sold, is sold to cellphones. Note that iTunes in the USA (best national market for iPod according to Apple) does not reach more than 10% of all music sold in America. And remember, South Korea is far more advanced in broadband internet than the USA.

So how about YouTube? The world's best known video sharing site. Already about a third of all YouTube users upload video clips from cellphones to YouTube, so obviously cameraphones are particularly well suited for such video (or picture) sharing sites. But what is the world's largest social networking site by the number of uploaded videos? Yes, you knew this was coming - Cyworld ! And again, YouTube serves dozens of countries, less than half of its users are Americans. But Cyworld is (still today, mostly) used only by South Koreans, a country one sixth the size of the USA.

Its not that Koreans are somehow more freakish about video. Its because they have the 3G cameraphones, the networks all are high speed and coverage extends into the subway stations and parking lots and skyscrapers etc, and the service concepts are optimised AND the prices are right. For example iTunes sells songs at 99 cents. But South Korean music services like Cyworld and Melon Music sell MP3 files to cellphones as full-track "over-the-air downloads" (ie direct to cellphones) for 40 cents each.

The future exists already. If you want to see what kind of concepts work on cellphones, visit South Korea and Japan and be amazed. 56% of Japanese consumers already use the "2D Barcode Reader" on their cellphones. This in 18 months from launch ! Its the latest killer app for the industry. Do you even know what a 2D barcode is? Does your cellphone have this ability? I'm a global leader in the cellphone industry and am using my 6th 3G phone already (11th smartphone) and this brand new Nokia superphone is Nokia's first model with the 2D barcode reader. (the phone is the N-93, this is the twisting/turning super cameraphone with optical zoom and DVD quality video recording, another 1000 dollar phone).

And to be clear, 2D barcodes (introduced in South Korea four years ago) or QR codes (Quick Response) are square scribbly blurs that seem a bit like fingerprints. They "magically eliminate the need for any typing" in web browsing. You point your cameraphone at the "fingerprint" and momentarily your cameraphone displays the web address encoded in the fuzzy square. BRILLIANT. No more clumsy long web addresses spelled out at the bottom of magazine ads or at bus stops and billboards and on business cards etc. Now just the handy 2D barcode and you can eliminate all typing

But you can't use them on a PC (in any meaningful way). You need a cameraphone to get the benefit. But in Japan, in 18 months, over half of all cellphone users already active users of this feature. This is the power of Mobile as the 7th Mass Media. Not inferior, dumb, little, crippled internet. But a new mass media, far superior not only in reach, but the ability of the medium in serving its audience.

Ok, hope you enjoyed some thoughts. Please stop by at my blogsite and post questions and comments, will be happy to give you more if you'd like. Also you might read a couple of the linked articles for more.

Thank you

Tomi Ahonen :-)
4-time bestselling author, lecturing at Oxford University on mobile, new media and convergence
founding member Wireless Watch, Engagement Alliance, Carnival of the Mobilists and Forum Oxford
website www.tomiahonen.com

John Proffitt

The writing in the linked piece is a bit strained, but the ideas are compelling and prophetic. It's something that wasn't touched upon at IMA (at least not the sessions I was in). We're still thinking about the Internet (web) as the big deal. Certainly the web IS a big deal -- a medium that has yet to be fulled tapped. But the mobile universe is likely to be bigger, for all the reasons cited in the article. I hadn't really thought about it before, mostly because mobile services in my area are quite expensive and still technically limited in some ways.

To anyone reading this comment -- be sure to read the linked article.

vv

I'm as fond of the penetration of mobiles as the next guy, but numbers do not a compelling experience make. Mobiles will make a dent as a media device only when they support addictive and compelling experiences

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