Friday sees the launch of the iPhone for Apple. In March 2007, we published a theory about what people wanted from their phone depended on whether the mobile phone came before or after PC based internet was introduced widely to the geographic region. We’ve republished it below. According to this theory, a high spec’d phone like the iPhone’s is going to have an uphill struggle in the US – however, Apple’s design and brand loyalty might help battle that.
OK, so here’s a theory about mobile phones and their use: in terms of phones their are three regions: Region 1 where the internet reached most people before mobile phones (North America); Region 2 where the internet reached most people at the same time as mobile phones (Europe); and then Region 3 where mobile phones reached most people before the internet (Asia, South America, Africa). The timing of the adoption of the internet versus the mobile phone within a region affects the relationship that region’s citizens have with their phone; and therefore should govern the services that will be used there.
This could explain why cell phone services like video are ignored in the US while kids in India use their phones to download music for their mp3 players.
Because people in the US are ultra-connected with web services and the data they can find on the web through their computers, they don’t feel compelled to access the web from their phones. US users are ignoring the web services offered by cellular providers. FastCompany just wrote:
In the past few years cell phone manufacturers have dazzled us with an amazing array of features. Basic games and simple text messaging are now passé. Cameras were once considered a big deal. Now, the latest models come with music players and Internet access. Two percent of subscribers watch television on their phones and we are witnessing the first moves to create programming specifically for cellphones.
Ask anyone in the mobile phone industry and you will get one answer: It’s almost impossible to tell which features are more popular among consumers. Manufacturers, operators, advertisers, and software manufacturers — no one has a precise answer. At best they are guesstimates.
They better be sat down when they hear the news.
Meanwhile, mobile phones for people in Africa, South America and Asia is the internet. Business Week reports that in India they’re using their phones to buy music for their music players:
If you want to understand the explosive growth in India’s digital music download scene, check out the buying habits of college-bound Dipanjali Singh. The 17-year-old has a $14-a-month prepaid card for purchases on her $386 Motorola Ming smart phone, and she uses about 50% of it to feed her ravenous appetite for cutting-edge pop music.
At any given moment, Singh has a repertoire of 50 songs from various artists (her current passion is San Francisco post-grunge band Third Eye Blind) downloaded to her handset directly from the Internet. She also transfers her tunes to her iPod.
…for handset makers and Indian telcos, the digital music download craze is a huge and positive development. Downloadable ring tones—some 300,000 are digitally transmitted to handsets every day in India—are already a $45 million-a-year business set to grow at double-digit levels the rest of the decade. Ring tones also generate about 40% of the data revenues for India’s big wireless operators such as Bharti Airtel and Reliance Communications.
While we should be careful to get too excited about a story on the rare Indian who can actually afford an iPod and a Ming, it’s still a good indicator of future trends in southern Asia.
In Africa, we’ve seen how the mobile phone is revolutionizing economies. We wrote only the other day about mobile banking in Kenya and Paul Mason’s video report for the BBC called ‘From Matatu to the Masai via mobile’ is one of the most important reports on the power of the mobile phone published this year.
Meanwhile in Europe the phone seems to supplement web experiences. When European phone users aren’t busy sending instant texts to each other, they’re receiving alerts from sites and services they signed up to via a website.
So what does this mean for the US?
Maybe it means that there will never be a “third screen” in the US. Or not for a long while. Today’s digital services that have been designed to be used via the phone may never be truly used. Reuters reports that Yahoo Mail and Yahoo Messenger will be available to be downloaded onto several Virgin Mobile handsets. But will anyone bother? Engadget reports that Korean electronics company LG At least 10 new “LG-Google handsets” will start shipping globally in 2007, each with a preload of Google Maps, Gmail, and Blogger mobile applications. But with they ever get used, especially if we consider the usage charges associated with data-packets?
Of course, the US did create one big mobile application: the Blackberry. But the Blackberry became popular in the US before an early adopter mobile phone markets like Europe because the Blackberry provides email in the same way you’d use email at your computer when you’re away from your computer. It’s a duplication of your email program, not an evolution in communication design. A similar argument could be given for the popularity of the Sidekick.
What’s happening in the US is a gold rush to offer services that may work in other countries. But maybe these services shouldn’t be offered at all. There’s a rumor that the Helio party-phone has only 10,000 subscribers and that Amp’d Mobile is doing poorly too. Even more ‘cool’ ads on the sides of buildings may not change this: Phones that help you locate friends and parties with social services will probably not work in a country that would rather pick up the phone than send an SMS text. If we consider this ‘3 Nation’ theory,maybe Helio and Amp’d is the wrong side of the equator and should be in South America instead.
A telecoms company needs to deliver the right services for the right market not shoehorn services that seemed to be a good idea at the time. Create phone services for Region 1 countries (US, Canada), make supplemental services for Region 2 countries (Europe, Australia) make mobile services for Region 3 countries (Asia, South America, Africa).
Just a theory.
Facebook
Twitter
Digg
Reddit
StumbleUpon
To echo your thoughts, the Business Week article highlights the trend of technology jumping. This is where countries jump technology to a newer and more affordable option. For music in India this was both the CD and the computer/mp3 player. I posted a blog on this subject yesterday – http://www.threebillion.com/article.php?id=7
March 28th, 2007 at 7:28 pm
Great read Piers. My personal thoughts on the future of the US market for mobile Internet services can be summed up in one acronym: WIMAX. Combine that with something like the Nokia N800 Internet Tablet and you’ve got the beginnings of an interesting value prop.
See link below for 2 paragraphs on Sprint’s WIMAX plans.
http://www.wirelessweek.com/article/CA6404611.html
March 29th, 2007 at 6:41 am
Nice summary, Piers. You’ve articulated something I’ve felt for a while but haven’t been able to reduce to 3 alternatives–which, as we know, is the easiest and most comprehensible way to explain anything to a client!
I remember giving a lecture at a mobile conference in London in 1998 just after we’d done live mobile World Cup scores with Nokia. At that point, few Euros actually had a PC but streaming consumer data services were already up on the phones. I tried, and failed, to make the case that this might not happen in the States because “everyone” had a PC. The point didn’t go over … ah, if only I’d had your article. (And, I suppose, 9 years of evolution.) Thanks.
March 29th, 2007 at 7:26 am
Blackberry was born in Canada – NOT the US as you would like to believe.
Just thought I’d clear that up for you :)
kthankspeace
March 29th, 2007 at 8:47 am
It would be nice if I could get unlimited data in north america on one of the GSM networks for 10 USD per month. I hope WiMax comes to the next N800. I’d drop my N80.
March 29th, 2007 at 2:01 pm
Hey Piers,
Brilliant read on a Friday evening :)
I think your theory has merit, simply because one-size-fits-all, Moses-on-the-mountain approaches are dead! In fact I wonder if they were ever alive apart from the illusionary efforts of giant corporations trying to numb people day in and day out.
Anyways, I have a theory of mine which might have something to do with this geographical tripartite customisation of yours (fuck, that’s a lot of jargon there!)
My theory is based on the influence of inter-cultural interaction.
For instance, Western thought has dominated the world for over 500 years now. American pop culture led the way for the past few decades.
However, from the turn of this century, things seem to be turning around. Note, I said “seem” (nuances are everything).
The pace at which Asia or Region 3 in your theory is growing is somehow causing an influx of values of these regions into popular global culture (observe the anklets and earrings in USA, Europe, Australia which were once only seen in Asia or South America).
This century is also unique in its decade numbering as there are two “zeros” in every decade (2010, 2020, blah blah.
I believe that the “zeros” here represent a ratio and the numbers before and after represent degree of Western influence versus degree of Region 3 influence.
E.g.: By 2010, The Western world’s influence on global pop culture versus Region 3’s influence will be 2:1, by 2020, it will be 2:2, by 2030, 2:3 and so on.
Therefore, to cut a long story short, if companies have to develop uni-cultural products that need to appeal to all regions, it might be worth considering how Region 1 and 2 ar gonna adapt to the coming of the Region 3 tigers.
Just a theory :)
Cheers
Yousuf
March 30th, 2007 at 11:00 am
Hi Piers,
I agree with your theory,
as the city I’m living Hong Kong which should Region 3, I’m looking for a new mobile which could use most Google Software such as their Doc and Spreadsheet, Gmail and to write Blog. Those apps are most I used on my PC. And I wish I could use them on my way home or office.
But local telcom service charge is high for me, and I couldn’t find any unlimited usage service plan which block me from buying a new mobile for above usage.
Cheers
Billy
June 27th, 2007 at 10:46 pm
What a load of tosh. As is often the case with these seemingly simple explanations of our complex world, we’re asked to except that a single factor is responsible for all the differences. In this case the relative introductions/adoptions of the internet and mobile telephony, whilst there might be a correlation there it doesn’t meant there’s a causation.
Here’s my alternative analysis, and its not really that complicate either as it turns out. It all comes down to simple economics and some marked lifestyle differences. Necessity is the greatest motivator. The reason Americans don’t use a lot of the extra data intensive features on their phone’s is that they don’t need to or don’t have the time to. If they’re at home or work they’re close to a computer and when in between the two they’re more likely to be in a car than using public transport. Contrast this with Europe and the richer nations of Asia where people tend to commute on public transport far more and therefore have more time, opportunity and motivation to use the extra, often data hungry, features on their handsets. It might also be worth noting that the environments involved in public transit are not entirely conducive to voice communications, just one of many reasons Europeans and Asians make greater use of SMS services for instance. SMS took off in Europe because consumers found it was often cheaper than making a call, and the habit stuck. In the US, where both the sender and recipient pay for sending and receiving a SMS, the economic incentive is somewhat less.
Japan has some of the longest average commutes in the world, and along with Korea, has the highest take up of none voice phone utilisation(NVPU). Sit down on any commuter train in Japan and you’ll immediately notice that half of its occupants, the ones who are not asleep, will have their eye’s glued to their phone screens. In Japan you can run your life on a mobile phone. The Japanese are obsessed with miniaturisation, but a few years ago the phones there started getting much bigger. When you spend so much time staring at your phone the size of its screen becomes far more important than its volume in your pocket or bag. For many people it’s the only opportunity to send personal e-mails, pay bills, catch up on the news, or just peruse the web.
For the populations of the developing world the internet hasn’t really arrived yet, at least not as we know it. Most people in these countries can’t afford a computer of their own or to use someone else’s for that matter. So once again it comes down to simple economics and necessity. People can afford mobile phones and NVPU is pitched at an affordable level. I was amazed a few years ago in Goa, when confronted with an incredibly slow terminal in an internet café, to look up at the wall only to discover all five the terminals were connect via a cell phone!
June 29th, 2007 at 7:43 pm