Research Notes

Have the mobile terminal manufactures teamed up and agreed upon a secret strategy

delaying the rollout of colour 2.5G mobile phones in Europe?
One of the many issues holding back the rollout of 2.5 G in Europe the past year, has been the lack of new mobile phones from the terminal manufactures. Without the new mobile phones with larger colour screens and built in GPRS and Java, 2.5G has not really been going anywhere and the mobile operators have been able to sit back and point their fingers at the terminal manufactures.

Technical problems, small shipping volumes and other delays do seem to be on the agenda, when new mobile phones are supposed to be launched in Europe and so far it has generally been accepted that it is only natural with new technology and is therefore to be expected.

Needless to say, we were somewhat surprised when we spent 9 months analysing the worlds most advanced mobile market in Korea and discovered that the 30 million mobile users have had access to 2.5G colour mobile phones since the middle of the year 2000 and advanced high speed, colour and Java enabled 2.5G mobile phones for the past year!

And it gets even better, because we are not talking small volumes either. In the past year, 9 million Korean mobile subscribers have bought new advanced 2.5G mobile phones and 3 million of those phones had colour screens!

Having finished our detailed report “The Korean Mobile market, a window to 3G”, that examines this unique mobile market that is 3 to 5 years ahead of the Europeans, we got to thinking about whether there was more going on behind the scenes at the phone manufactures strategy meetings, than meets the eye.

In general, during the last year or so in Europe, most of the mobile operators have had their 2.5G GPRS networks up and running. Although there has not been much consistency in GPRS pricing and very little content, it has actually been working and available. But where were the GPRS mobile phones? And what about low-end mobile phones sporting colour screens and java for the younger heavy-user segments?

If you think hard enough about it, you could get the impression that the terminal manufactures release new generation CDMA 2.5G colour phones in Asia, while at the same time, delaying GPRS 2.5G phones in Europe.

Why would they want to do that? The obvious reasons are:

-Extend lifespan of 2G mobile phones

-Clear 2G stocks

-Only sell 2.5G colour phones when the operators are ready

All of the above reasons would help the terminal manufactures, who are experiencing difficult times, markets that are slowing down and fierce competition. With regards to the last reason, the Korean mobile operators have worked very hard so there was ample new content for the new 2.5G mobile phones and marketed the 2.5G rollout through innovative new sub-brands with content, services and subscription offerings tailored to each targeted segment. Therefore the terminal manufactures knew that they would achieve high volume sales of new 2.5G mobile phones out in Korea – whereas, the European operators have as yet spent little effort on content, services and packaged subscription offerings. Indeed, many European mobile operators are still not sure what sort of revenue sharings business models to offer content- and service providers on the new 2.5G plratforms!

However, if this is the case and the terminal manufactures really are selling new technology by the millions in one part of the world and delaying it in another with their uhms and ahhs about technical problems etc, then somewhere along the line, the different manufactures must have sat down in secret and agreed to adopt this strategy. In other words – a terminal manufacturer world conspiracy worthy of a Hollywood movie!

Whether this is the case, will probably never be disclosed. So while Europe waits for more new and cheaper colour 2.5G mobile phones, the Korean and Japanese mobile users can once again feel themselves on top of the technological world of electronic gadgets.

For once though we can smirk a little at them – as their colour mobile phones do not work on our European networks, so they cannot send colour pictures home from Piccadilly Circus. Ha!

Today, the Korean mobile market is somewhere between 3 and 5 years ahead of the Europe and the lessons that can be learned from what the Koreans have achieved are many and invaluable – and of course a gift to a hard pressed European mobile industry, that still does not know exactly what sort of strategies they should be looking at for their 2.5G rollout.

The Korean mobile market is described in detail in Strand Consults latest report “The Korean Mobile market, a window to 3G”. We spent almost 9 months analysing the worlds most advanced mobile market. We met with all the players in the mobile value chain and been honoured to have access to information not previously disclosed. We describe what the operators, the content owners and the technology companies business case actually looks like for real. With key figures and information we give a detailed description of a mobile market with over 30 million mobile customers – of which 9 million are 2.5G users, with new innovative mobile services- and content and download speeds very similar to what we will see in Europe on 3G!
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