Research Notes

Mobile Applications in South Korea open up for much more flexible pricing schemes and flexible pricing schemes open up for more revenue

In South Korea Mobile Applications have made a big impact on what types of pricing models the mobile operators can offer mobile users – and the new price models have made an impact on the usage of mobile services that are running on the Mobile Applications platform.

The Mobile Applications in South Korea are running on their “Virtual Machine”platform (VM-platform). VM is the platform that enables mobile consumers to download services and applications – for example games – to their mobile phones, which they then can use in principal for as long as they like or have paid for, without having to go online again. VM is a middleware platform, in between the mobile operator’s server and the consumers’ mobile phones. So a mobile user with a VM-phone can buy and download e.g. an e-mail application that then resides on his mobile phone, where he can read and write emails. He only has to go online briefly to send and fetch new mails – completely the opposite of a browser based WAP mail – where you had to be online the whole time you were accessing your mail.
One of the many benefits of Mobile Applications is the pricing possibilities that they can offer. For example, if a mobile user downloads a game to his mobile phone, there are countless ways of to accept payment:

-The download can include a free trial period, before payment
-The download can be free, but the users pays for each day
-The user pays for the service and can use it as much as he wants
-The user can use the service X number of times – or X number of days/weeks/months
-A game could be free, but the next level cost’s money to download – and so on.

There are many mobile services that are using Mobile Applications, simply because it gives the mobile users the opportunity to keep their mobile phones updated with the latest software and services. When the user tires of a game or maybe an e-mail application he has downloaded, he can simple go to the mobile operators mobile portal and find some new games and a new e-mail application with new features and download it to his mobile phone – replacing the old games and applications.

An average mobile phone in Korea has room for somewhere around 20 mobile applications – depending on their size – and when a mobile consumer buys a new 2.5G mobile phone and leaves the shop, some Mobile Applications have already been pre-loaded in his mobile phone that he can try out.
Once loaded, most mobile applications will not cost the user extra money, unless he has to go online using the application. Applications that need to go online are for example; e-mail to send and receive e-mails, multiplayer games and location based services. Whether the user is just paying for the traffic or also an added content fee on top of the traffic varies depending on the type of application.
You can read much more about Mobile Applications and the many other new mobile services that the South Koreans have been using for nearly two years in Strand Consults new report “The Korean Mobile Services Market – A window to 3G”.

Strand Consult 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 15 million today are “3G” users. Our work has resulted in two comprehensive reports; “The Korean Mobile Services Market – A window to 3G” and “The Korean Mobile Market – A window to 3G”. Together these two reports are a roadmap of what we can expect in Europe and other parts of the world – as 3G starts rolling out and new types of services, technologies and payment options start to emerge.
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