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The Mobile Revolution : the Making of Mobile Services Worldwide / Dan Steinbock

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The Mobile Revolution : the Making of Mobile Services Worldwide / Dan Steinbock ❙ i London and Sterling, VA ii ❙ Publisher’s note Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors. First published in Great Britain and the United States in 2005 by Kogan Page Limited. Reprinted 2005 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publi- cation may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses: 120 Pentonville Road 22883 Quicksilver Drive London N1 9JN Sterling VA20166–2012 United Kingdom USA www.kogan-page.co.uk © Dan Steinbock, 2005 ISBN 0 7494 4296 4 British Library Cataloguing-in-Publication Data A CIP record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Steinbock, Dan. The mobile revolution : the making of mobile services worldwide / Dan Steinbock. p. cm. Includes bibliographical references and index. ISBN 0-7494-4296-4 1. Wireless communication systems. 2. Mobile communication systems. 3. Telecommunication. 4. Internet. I. Title. HE9713.S728 2005 384.3’3–dc22 2005004338 Typeset by Saxon Graphics Ltd, Derby Printed and bound in Great Britain by Thanet Press Ltd, Margate ❙ iii Contents List of figures v List of tables vii List of boxes ix Acknowledgements xi Acronyms xv Introduction 1 From technology innovation… 1; …To marketing innovation 2; Mobile services worldwide 4; The structure of the book 4 Part I Market transformation 1 Globalization 11 Globalization of markets 11; Worldwide market evolution 19; Regional market evolution 20; Great new growth markets 26; Toward the next ‘next big’ market 31 2 Innovation 35 Waves of innovation 35; Market innovation 40; Mobile service innovation 50; Unique characteristics of mobile services 53; The services marketing mix 56; A total service portfolio 57; New service development 58 3 Service pioneers 63 Service innovation 63; The birth of i-mode 66; Service portfolio 71; The progenitors 75; Exploding content market 81 iv ❙ Contents Part II Mobile consumer services 4 Service innovation 87 Service categories 87; New services 90; Content evolution 104; Mobile portals 107 5 Content services 111 NTT DoCoMo’s pioneering 111; Evolution of mobile content 116; Mobile music: ringtones everywhere 125 6 Mobile media and entertainment 137 The emerging value chain 137; Pioneering efforts 144 7 ‘Device formerly known as cellphone’ 163 From brick to self-expression 163; Design evolution 165; Variations of segmentation 173; Toward wearables 190 Part III Mobile business services 8 Mobile marketing and consumer behaviour 195 The mobile marketing business 195; Mobile marketing service innovation 200; From campaigns to diffusion 206 9 Mobile business services 223 Evolution of mobile business services 223; Business service innovation 231; Enterprise solutions providers 240; Corporate markets 243 10 Strategy and mobility 255 From market signals to economic value 255; Mobility and competitive advantage 257; Mobility and competitive strategy 265; Mobility, business models and strategy 270 Notes 275 References 287 Index 297 ❙ v Figures 0.1 Innovation waves defined by technologies 2 0.2 Innovation waves defined by markets 3 1.1 Regional evolution: most populous country markets (1984–2003) 12 1.2 Industry globalization: industry value system 13 1.3 Triple convergence: US information technology, European mobile communications, Asian consumer electronics 14 1.4 China’s mobile marketplace: Nokia’s presence (autumn 2003) 18 2.1 From Marconi to 4G: technology and market evolution 36 2.2 Expansion of wireless bandwidth 38 2.3 Evolution of mobile phone categories and segments 47 2.4 Product, process and service innovation in the mobile business 52 2.5 Making the intangible tangible 54 2.6 Total service portfolio 57 2.7 New service development 59 3.1 Evolution of content services 64 3.2 The origins of i-mode 65 3.3 Origins of i-mode: the collaboration concept 68 4.1 Service categories 90 4.2 Messaging migration: from SMS to multimedia 94 4.3 New services and usage scenarios: lifeblogging 96 4.4 Mobile trading, mobile banking, mobile transaction payments 103 5.1 The mobile multimedia frontier 112 5.2 NTT DoCoMo advanced service innovation from 1999 to 2010: evolution of FOMA 114 5.3 From digital cameras to scanners to mobile wallets 115 5.4 Evolutionary phases of mobile video services 117 5.5 From mobile video to mobile television 121 vi ❙ Figures 5.6 From mobile video to mobile phone television 124 5.7 The changing context of music 132 5.8 Complementary objectives 134 6.1 Digital rights management (DRM) 139 6.2 N-Gage 153 7.1 Nokia’s design categories: evolutionary branching 166 7.2 From colour to fashion to luxury to imaging 170 7.3 Mobile networks and handsets 174 7.4 Two logics of segmentation 175 7.5 Moto-morphing things 177 7.6 Nokia’s product category matrix 182 7.7 Introduction of the Nokia 7650 (March 2004) 186 7.8 FingerWhisper 192 8.1 The role of mobile marketing service providers 199 8.2 Building deep relationships: mobile matrix 203 8.3 Innovation and diffusion: innovation adopter categorization 217 9.1 The enterprise solutions addressable market (2004) 242 9.2 FT Global 500: Market capitalization (US$ billion) and number of companies 245 9.3 Communication and IT needs vary by industry characteristics 247 9.4 Two axes: service and mobility needs 251 10.1 Valuation peaks, 1871–2000 258 10.2 Mobility and the value chain 260 10.3 How mobility influences industry forces 266 ❙ vii Tables 1.1 The world’s leading mobile operators (1983–2002) 15 1.2 The next ‘next big markets’ 33 3.1 i-mode service variety 72 3.2 NTT DoCoMo market research: subscriber behaviour 74 4.1 Initial and evolving i-mode categories 104 6.1 Media and entertainment services: payment, revenue sources, time-use 138 6.2 CNN mobile services: timeline 145 8.1 Mobile marketing services 204 8.2 Innovation and diffusion: mapping early-adopter opinion leaders 219 9.1 Examples of notifications and the mobile workforce 237 9.2 Communication and IT needs vary by enterprise size 245 9.3 Employees need a multitude of services 251 9.4 Two axes: service and mobility needs 253 viii ❙ This page intentionally left blank ❙ ix Boxes 1.1 ‘It’s a different market now’ 17 1.2 The great reversal: scanning markets worldwide 22 1.3 The SK Telecom success story: translating technology pioneership to service innovation 24 1.4 Pioneering mobile markets in China 27 2.1 Disruptive potential of broadband wireless 39 2.2 The first call 43 2.3 Differentiating in a crowded market 48 2.4 Toward the future 60 3.1 Disney and DoCoMo’s pioneership 70 3.2 Going for global multimedia 82 4.1 Mobile communities – Asian style 93 4.2 Wall Street in the palm of your hand 99 4.3 Mobile sports and games 101 4.4 New York Times: ‘It must be 10x better’ 105 5.1 Mobile streaming 119 5.2 Disruption through mobile broadcasting 123 5.3 Mobile music: the Nokia–EMI deal 127 5.4 Licensing the ringtone revolution in the United States 129 5.5 Integrating mobile music 135 6.1 Mobile media licensing 141 6.2 May the best content win! 147 6.3 Developing unique positioning 154 6.4 Where are your customers? 156 6.5 Quality sells 160 7.1 From functionality to experience 175 7.2 Smart phones: the Microsoft vision 179 x ❙ Boxes 7.3 The birth of the imaging era 184 7.4 The world according to Moto 188 8.1 Science fiction or reality? A day in mobile life 196 8.2 Mobile tweens 214 8.3 The Asian mobile momentum 220 9.1 Toward mobile Windows devices 225 9.2 Enterprise solutions – Verizon Wireless style 229 9.3 Transforming industries 233 9.4 IBM’s middleware solutions 244 9.5 Mobilizing the entire workforce 249 ❙ xi Acknowledgements As I was researching The Mobile Revolution, I nicknamed it ‘The Great Software Monster’, as Nokia’s struggling executives once termed the GSM project. Fascinating subject, but a lot of work. I’ve written most of the book in downtown Manhattan, Shanghai and Pudong, London, Helsinki and Hong Kong. The experiences of the leading mobile pioneers – vendors, operators, Hollywood studios, media companies, music publishers and record companies, marketers and advertisers, as well as global brands – are not just important, but make a fascinating story. I am indebted to some 80 senior exec- utives across the world. In addition to these interviewees who so generously gave their time and thoughts, I owe an additional debt to their assistants, secretaries, PR agencies and spokespersons because often they were the ones who made these interviews happen. In particular, I would like to extend my sincere thanks to Anssi Vanjoki, executive vice president of Nokia Multimedia, the marketer who globalized Nokia’s brand in just a few years and is now one of the visionaries of mobile multimedia; Geoffrey Frost, chief marketing officer of Motorola, Nike’s former brand wizard who created the great Michael Jordan and Tiger Woods campaigns and is now ‘Moto-morphing’ the mobile world; Sean Maloney, executive vice president of Intel, the technology and marketing guru who is mobilizing Intel for a new era; Dr Paul E Jacobs, group president of Qualcomm, the pioneer of the core technology of the 3G era (CDMA), and a tireless promoter of the BREW platform; Bert Nordberg, senior vice president of the LM Ericsson, the veteran Swedish leader of infrastructure equipment; and Ed Suwanjindar, lead product manager at Microsoft’s mobile devices who has persuasively advocated the adoption and use of smart phones worldwide.
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