More on Microsoft Monoculture: Mobile Phones

The Chosun Ilbo English edition carried an interesting article yesterday headlined, "Microsoft Can't Get a Handle on Mobile Phone OS Market." Of course it can't. This is highly relevant to the current situation here in the Korean market, which has been described as a "Microsoft Monoculture." (see my earlier post) The article relates to a growing concern I've had with developments, or lack of development, in South Korea's mobile market over the past several years. This nation, which has the most extensive and advanced digital networks in the world and where 100 percent of the population carry 3G, internet-browsing capable phones, finds itself in the somewhat embarassing situation. Only about 10 percent of the population actually use there phones to surf the web, for two reasons. First, the exorbitantly high data rates. Second, and more importantly, two of the three mobile service providers do not even allow web-browsing on most of their phones, instead providing a Korean-language only walled-garden database which, in the case of SK Telecom is called "Nate." All of this prompts the following observations.

• Microsoft's whole business model was built around the PC and desktop computing, an era which is now ending with the advent of cloud computing and true mobile broadband.
• To be more specific, Microsoft's Windows Mobile platform was modeled after Windows itself, which may only now be emerging from the disaster of Windows Vista. Industry and expert reviews of the latest versions of Windows Mobile are hardly encouraging. Those who know a little bit about software will surely go for Android, Apple's iPhone or Symbian before venturing into a Windows Mobile user environment.
• Korea's major handset makers, LG and Samsung, both have big business deals with Microsoft. In the case of LG, it made a long term commitment to manufacture handsets using the Windows Mobile platform. Samsung is currently trying to sell its Omnia and other nice new AMOLED touch screen phones in Korea, with the Windows Mobile OS. This at a time when consumers here in Korea want the iPhone or something much like it--the Android.
• Both mobile service providers and handset manufacturers in Korea appear to have "missed the boat" in the Korean mobile market by about two and a half years. That is how long ago the Apple iPhone was first introduced in the U.S. and some other markets. Korea will catch up. I never bet against this country in the long term, but valuable time has been lost.
• I expect to see Android emerge as the leading OS for mobile communication over the next 5-10 years, perhaps even sooner. There are solid reasons for this expectation. Read David Pogue's review of Motorola's Droid in the New York Times.

Android to Overtake iPhone in Worldwide Mobile Market

Finally a colleague sent me the study I've been waiting to see.  According to a new Gartner forecast reported by Register Hardware, Android will have more than quadrupled its market share by 2012.  Its market share stood at only 1.9 percent in the first quarter of 2009, but will grow to 14.5 percent by the final quarter of 2012.  This would move Android from the sixth most popular operating system for smartphones to the second most popular, following Symbian.  The main reason for this market share growth is because, unlike Apple, Google licenses their OS to multiple original equipment manufacturers (OEMs).
If this projection is even close to accurate it holds huge implications for the mobile communications market here in Korea, which is on the verge of a major transition to mobile handsets capable of surfing the web (all of it!) with a host of new services and content appearing in the process.  Not all of the services and content will be "made in Korea," but a flood of new applications should strengthen, not weaken, South Korea's mobile content, services and software sector.  If all works out well, 2012 should be very interesting, with gigabit per second internet service in major cities and much faster mobile broadband.

Korea's Mobile Market Malaise

I've just returned to Korea from a one-week visit to Barcelona as noted in my earlier post.  As I catch up on some reading of tech articles, I cannot help but mention several developments that go a long way toward explaining the malaise in South Korea's mobile communications market.
A headline in The Korea Times a couple of days ago asks "Can Smartphones, Netbooks Save WiBro?"  The answer to this question is pretty obvious to those following the massive shift in the mobile market worldwide, away from phones per se and toward internet-enabled devices like the Apple iPhone, Android and other would-be competitors.  At least one company in China seems to understand what is going on as China Unicom, the country's second largest mobile operator, announced with Apple that it will launch the iPhone in China.  It is more than a little interesting that this comes before any Korean mobile operator announces a similar deal.  For details, check out The Financial Times article.
The answer to the Korea Times headline question is that phones like the iPhone, Android phones and the like can do a great deal to boost interest in WiBro.  Why?  Because they allow access to the entire internet at reasonable monthly rates.  Also because WiBro-equipped devices offer greater speed than 3-G connections to the internet.  Internet users around the world have proven many times over that they value the speed of their interconnection.   Simply put, when it comes to broadband, speed matters.
People in Korea should not be wondering so much why WiBro has not yet taken off here. The experience of the iPhone for over two years now in many other countries shows that (1) people want internet access, not a small, pre-packaged segment of the internet only in Korean or only in any other single language (2) they prefer faster rather than slow access via their mobile device and (3) that people find different applications very useful, including many types of geospatial and social networking applications.
Failure to realize the importance of the Google-backed Android and the iPhone have put the Korean market well behind (2+years) significant global trends.  The whole mobile communications market in South Korea will only emerge from the current malaise when one or two companies start offering internet services via the iPhone, Android phones and possibly other competitors.  Although the iPhone was first out of the starting block back in 2007, I think Android will give it a run for the money worldwide,including the South Korean market.  Comments welcome.

WiBRO a White Elephant? I Think Not!

I saw a copy of the Korea Times this morning while strolling through our third floor offices and could not avoid noticing the frontpage article with the headline "WiBro Turns into White Elephant."  Although this makes for a good headline, after reading the article I think the analysis is way off the mark.  Most of the argument seems to be based on the fact that projections for WiBro in the local Korean market, including some by the Korea Information Society Development Institute, were overly optimistic.  Furthermore, the reporter notes that in a country with one of the most advanced wireless networks in the world WiBro looks like a "solution without a problem."  I beg to differ.
Consider the following:

• There has been relatively slow and little uptake of the internet services offered by nation's mobile service providers on their 3G phones.  I have Nate and other SK Telecom services on my Motorola Razr phone but I seldom use them because of the inordinate cost.  The cost of surfing the web on current 3G services in Korea is way out of line.  There is your problem and it is a big one.
• The Apple I-phone, Google Android based phones give a glimpse of what is coming.  It is really a hand-held computer that also serves as a phone.  I want my next phone in order to do Google searching, read BBC or the New York Times, check my e-mail, or make a Skype or other VOIP call.  The Korea Communications Commission has recognized that the world is full of consumers like me and so they have opened up the mobile market to the I-phone, Blackberry and other international competition, starting in a few months.  

The Korea Times article also says that "WiBro is designed as a predecessor to mobile WiMax."   This is in error.  WiBro, as it is called here in Korea, IS mobile WiMax in the terminology used by most other nations. Furthermore, the comments in the article about standards are potentially confusing.  WiBro, or mobile WiMax has been accepted as an international standard.  The major competing standard, also accepted internationally, is LTE, but it is further from implementation than WiBro.   Reading this article, one might think that WiBro, rather than LTE is lagging.
At this point, there is very little question that both WiBro and LTE will be successful for the simple reason that they add mobility to our experience of the internet.  I've used WiBro and it works just fine, thank you.  So will LTE, when they get to the same stage of technology rollout.
One final comment.   Of course SK Telecom doesn't like the thought of WiBro handsets, WiBro notebooks and all sorts of WiBro-equipped devices. ``We would need to invest at least two trillion won more to complete a nationwide WiBro network, and the cheap calls on WiBro handsets will erode our profits by initiating fierce competition,'' said an SK Telecom spokesman.  So what else is new?  Of course it will erode SK Telecom's profits and initiate competition.  I would only suggest that SK Telecom cannot forestall the inevitable move to more powerful handsets.  Nor will it thrive in the long run through thinking only about protection of short-term profits.

Korea Opens the Mobile Market

The press here in Korea have widely announced the opening of the mobile communications market.  This is very important news, given the importance of mobile communications in the future information society in Korea and around the globe.  The Korea Communications Commission has eliminated WIPI, a local software standard, and thereby opened up the mobile communications market.  This means that the Apple I-Phone, along with the Blackberry and other phones from around the world will be entering this market next year.
This is a welcome development and one that I am sure will invigorate not only the Korean market, but its role in the international marketplace for mobile communication.  As mentioned in an earlier post, I eagerly look forward to seeing what Samsung and LG will offer as their first Android phones.  If all the capabilities of Korea's handset makers are brought to bear on the Android project, it could make the Apple I-phone and the Blackberry look like "drops in the bucket" as it were!  This should be interesting.  I hereby volunteer to test any one of these new devices.

Android Phones in South Korea: A Breakthrough?

The Economist has a thought-provoking article in its current edition entitled "The battle for the smart-phone's seoul."  It expresses many of the thought's I've had about the mobile phone market in Korea.  I am among the many who can't wait to get their hands on an Android variation of Apple's i-Phone, so that we can carry all of the "killer applications" of the internet around in our pocket or on a belt clip. 

Rather than opening up its mobile market to the I-Phone and other innovations, South Korea chose to maintain a special WIPI software requirement.   As far as I can determine, this software requirement serves no useful purpose other than to make it more difficult for Apple or others to enter the South Korean market.   If you read the Economist's latest analysis, it implies that this nation should completely open up its mobile communications market to encourage innovation and also to help its leading exporters of handsets.  Among the main points are the following.

• According to Informa, a market-research firm, the market for smart-phones will grow from $39 billion in 2007 to $95 billion in 2013, by which time they will make up nearly half of the handset market by value (though only 34% by volume).
• More importantly, as handsets get smarter the nature of the industry will change. It will be less about hardware and more about software, services and content, as illustrated by the accompanying chart. This is why, for the first time, a fierce battle between operating systems for handsets has broken out.
• It has taken two outsiders to shake things up. One is Apple, with its iPhone. As well as being a paragon of hardware and user-interface design, it comes with a flat-rate “all you can eat” data plan.
• The other disrupter is Google, with its Android platform. It also lets users download applications from an online store, called Android Market. But it differs from the iPhone in that Android is just software, which Google makes available to handset-makers and operators.

The Economist goes on to point out that these developments have prompted the incumbents in the mobile phone industry to look for new operating system platforms as well.  The main point of all these developments for South Korea seems abundantly clear.  Both Samsung and LG are members of the Open Handset Alliance, a group of more than 30 technology and mobile companies who came together to accelerate innovation in mobile.  Their first product was Android.  Therefore, the whole world will be watching to see just how innovative the first generation of LG and Samsung Android phones will be.  If I were in charge of long-term strategy at either of these leading mobile handset manufacturers, I'd bet the bank on this one.  Take the best in design from the I-phone and your own prior models, program Android to place the "internet in your hand" and lead the way!

The Future of Mobile Technology

The following discussion at the World Economic Forum in Davos makes for interesting viewing.  I recommend it to readers of this blog.

Google's Android Phone: What Will Samsung and LG Do Now?

With the release of the world's first Android phone yesterday by T-Mobile in the United States, following on the success of the iPhone in most of the world, Samsung, LG and other major players in the South Korean market should be prepared to act boldly.  Failure to do so could damage the efforts of these companies and others here to maintain a healthy share of the international market for mobile phones and other portable devices.
The iPhone and the Android make it very clear that convergence has already brought the internet experience to mobile phones, and consumers all over the world will be clamoring for these devices.  There will also be pressure for the leading mobile operators to provide high speed internet access at reasonable rates.  Here in South Korea, we still have the unusual situation that neither the iPhone nor the Google Android are available yet.   Clearly, many consumers would like to purchase one, or both of these phones, given the high levels of internet use here.   As a consolation prize, many are hoping, with me, that LG and Samsung will soon launch their own Android phones here.  Both companies are members of the Open Handset Alliance .