eCommerce revolution in Korea: online sales become the first distribution channel

When I first came to Korea 20 years ago, Department Stores were becoming the main distribution channel for many consumer goods, taking over traditional door-to-door sales.

Convenience stores (FamilyMart, LG25 - now GS25 -, BuyTheWay, 7Eleven...) were also gaining ground. Then came the hypermarkets (eMart, Carrefour at one moment, Samsung / Tesco HomePlus, Lotte Mart...), and the SSMs / SuperSuperMarkets (Lotte mySuper, HomePlus Express, eMart Everyday...).

One by one, small groceries / mom & pop stores closed, and traditional markets plummeted, killed by discount shopping (or supposedly "discount" shopping : a recent survey pointed out that for many food items, traditional markets are actually cheaper). Survivors could count on one system that protected both food majors and small distributors : product packaging including the price tag regardless of the sales channel, which guaranteed the same price for such basic items as instant noodles or ice creams. But this system is about to be abandoned and anyway, it didn't mean much anymore : big discount sell their own brands of instant noodles, and my local SSM offers a year-round 50% discount on all ice creams.

Even as competition raged between discount shops, many opening 24/7/365, Department Stores (Lotte DS, Shinsegae DS, Hyundai DS, Galleria DS...), sometimes growing into ambitious complexes (ie Shinsegae Centum City in Busan) remained ahead for many consumer goods and fashion.

Until now : online sales have just become Korea's first distribution channel.

This doesn't come as a surprise for anyone living in "ubiquitous" Korea : beyond pure players (ie Auction), even brick and mortar leaders are pushing ecommerce very hard, prefering cannibalization to the loss of a customer.

Somehow, we're back to square one and door-to-door sales. The first door is your mobile, PC or TV screen, but everything is done to deliver it wherever you live (home deliveries keep booming), wherever you work (Seoul would collapse without cheap express deliveries), and even wherever you go (ie location based services and mobile couponing).

Like for ADSL or FTTH, Korea's economy of access is unbeatable. Because of urban density, because major players are ready to offer what comes as a premium anywhere else, and furthermore because in many cases for smaller fish, the last mile is provided by people working under the legal hourly wage, ready to make a buck even if it doesn't make any sense if you simply take into account transportation costs. When you see a truck carrying about five hundred eggs on a highway, you know something is wrong. And when you order a book online, the delivery person is rarely twice the same plain-clothes individual.

I guess that's one of the reasons why Amazon is not in Korea. The retailer tried to do some business via Samsung / SIMS more than ten years ago but failed. So Amazon ships from other countries to international customers while Kim & Chang law firm securely protects Amazon.co.kr URL.

Of course, Amazon would face pure players in cultural goods, such as Aladdin (now Aladin.co.kr), or Kyobo Book Center (very ambitious in the ebook ecosystem), but I don't think it's about competition : players differenciating themselves on logistic platforms tend to struggle here. Carrefour left the country in spite of commercial success for regulatory reasons : it couldn't operate with its usual purchasing power model. I think the logistics equation could be very tricky for Amazon.

eBay is faring much better in Korea (as Auction.co.kr) - it even wolfed down G-market, snatching it away from Inter Park... but eBay more into auctions and C2C than into retailing and B2C. And when it advertised massively on internet shopping, big retailers pushed the pedal to the metal.

But the biggest revolution for e-commerce in Korea this year is the end of Microsoft Explorer's de facto monopoly since July 1st : since 1999, all online shopping and banking services had to use ActiveX systems, but the Financial Services Commission put an end to it following the recent boom in smartphones.

mot-bile 2010 - see also my original post on Seoul Village

3D notebooks from LG

LG is not only betting on TVs for 3D (1 million units expected this year) : 3 new laptops have just been unveiled, priced about 20% more than standard models (KRW 1.6 M to 1.9 M - USD 1,330 to 1,580 these days). Desktops and monitors were also introduced, all requiring 3D glasses to enjoy the effect.

The Korean manufacturer expects 3D to represent 30% of its laptop sales in 2011, and the segment to boom (1.1 M units in 2011, 13.5 in 2013). For the number 2 player in TV displays, 3D could prove a game changer in a market where it's struggling among second-tier manufacturers. The move is also defensive as TV and PC converge, often sharing the same screens.

Beyond movies, web enabled / 3D devices are ideal online gaming and MMORPG, key drivers in Korea : LG could leverage on the PC Bang - game editors ecosystem to accelerate adoption and stimulate content production.

mot-bile 2010

VoIP over 3G, unlimited data... SK Telecom victim of the summerheat wave ?

SK Telecom is lobbying in favor of a more open regulation for mobile Voice over IP in Korea : instead of being only legal on Wi-Fi, it would be authorized on 3G as well. SKT would then provide the service through Skype-like solutions - actually, I wouldn't be surprised to see some Google inside (see "Gizmo5 found its Google Voice"), and consumers would only pay for the data (not to mention fees from the app provider).

OK OK. There's a catch : data rates are pretty expensive in Korea.

Well, not so much now : SK Telecom also announced an unlimited data plan for all subs with a data package of over KRW 55,000 (about USD 45) per month. That would be for smartphone holders, but as far as I know, you can use your smartphone as a modem for greedier devices.

Alright. Here is a small operator struggling for market share, desperate to win big customers, and not worried about network capacity.

Wait a minute. SKT is by far the leader of Korea's (saturated) market, with about 51% of the pie. SKT does not sell iPhones like AT&T, whose success with Apple forced a spectacular backpedaling on unlimited data plans, but SKT is doing pretty well with Samsung Galaxy S (over 300,000 units sold for this Android handset in Korea). Its position doesn't seem that much threatened in the short term.

But what looks like a desperate defensive move following data rate cuts by competitors is also an aggressive move on convergence / quadplay offers (or is it pentaplay, now that the battle rages on wi-fi hotspots ?). Voice ? A commodity, sooner than later - losing a big customer altogether would cost me much more. And guess what ? Ultra-Broadband Convergence Network (UBcN) is around the corner (that's to say 2013 but blocks are bigger around here).

Still, unlimited data plans are a very risky bet in "ubiquitous Korea".


mot-bile 2010

Cisco Cius ? Put it on my Samsung Galaxy Tab

With its Android based Galaxy series, Samsung seems to have packaged a nice alternative to the iPhone / iPad duet. Or is it the whole industry that's growing tired of the Cupertino arrogance ?

Anyway, the Galaxy S is already selling very well in Korea (over 200,000 units within days) and overseas (the top 5 MNOs went for it, 100 worldwide), and NTT DoCoMo already announced the launch of Galaxy Tab in October 2010 (LG's tablet is still expected in Q4).

Meanwhile, Cisco gave a new shot at the business tablet concept : the Cisco Cius is expected H1 2011. Also based on Android, the Cius looks much smaller than the 7 Inch Galaxy Tab, and seems to focus on video calls : "HD video (720p) with Cisco TelePresence solution interoperability for lifelike video communication with the simplicity of a phone call"*... That, of course, is provided you're connected to a big pipe, say Wi-Fi for instance.

Funny how Wi-Fi coverage is getting popular again : MNOs are abandoning flat rates for data... and all hopes that LTE can support the boom in heavy mobile / nomadic usages.

Cisco also throws in EVO 4G, Bluetooth, USB, the last one a sure bet.

But I would rather bet on RIM than Cisco for a hit in business circles, even if the BlackBerry Tablet is supposed to rely on the Blackberry handset for connectivity. Actually, that major drawback for the enduser could prove an excellent argument for CIOs and CFOs.

Nevermind that geeky CEO.


mot-bile 2010

* other applications apabilities (see Cisco Cius website) :
• 802.11a/b/g/n Wi-Fi, 3G/4G data and Bluetooth 3.0 help employees stay connected on and off-campus
• Virtual desktop client enables highly secure access to cloud-based business applications
• Android operating system, with access Android marketplace applications
• Collaboration applications including Cisco Quad, Cisco Show and Share, WebEx, Presence, and IM
Tablet Highlights:
• 7” diagonal, high-resolution color screen with contact-based touch targets delivers an elegant, intuitive experience
• HD Soundstation supports Bluetooth and USB peripherals, 10/100/1000 wired connectivity and a handset option
• Detachable and serviceable 8-hour battery for a full day of work
• Highly secure remote connections with Cisco AnyConnect Security VPN Client
• HD audio with wideband support (tablet, HD Soundstation)

Woot flows with the Amazon

In his own words*, Woot CEO Matt Rutledge announced the agreement between his hot sales website and Amazon.com. The Woot brand shall survive like today : barely Audible, but with a music of its own.

Barely Audible ? I wouldn't be surprised to see Jeff Bezos use a loudspeaker for that one on social networking sites.

mot-bile 2010


* see "Amazon, Woot, and You: But Mostly Woot", following an email stating "BREAKING: Woot To Be Acquired By Amazon, Then Left To Amuse Ourselves - Holy crap! Woot has signed an agreement with Amazon - yes, the Amazon - to become an independent subsidiary of the ecommerce colossus. Woot HQ will remain in Carrollton, Texas, and will operate as autonomously as other Amazon companies like Zappos and Audible. Visit the blog for our usual snarky commentary and tell us what you think. - Woot" (NB at this stage, nothing about the deal on Amazon.com's corporate website)

YouTube sails away from Viacom in safe harbor

Google soberly* claimed victory over Viacom in a legal battle about copyrighted contents illegally uploaded on YouTube : removing them swiftly guarantees the portal a "safe harbor".

In Lingua Googla, the act of cleaning up the mess is reworded as "work cooperatively with copyright holders to help them manage their rights online". This is not policing but good editorial business.

In other words : Google, the piggyback media, is relegating Viacom into commodity categories. The real media is not Viacom but Google.

mot-bile 2010

* "YouTube wins case against Viacom"

Korea : Nexus One in June, more robust networks in sight

Korea Telecom announced Google's Nexus One (HTC on Android FroYo) for June 2010.

Since Samsung preempted the green android territory and even protected the brand for handsets*, KT will have to find a different angle.

June, World Cup, Frozen Yoghurt... expect something fresher for this smartphone / app phone. Patbingsu style.

KT claimed its 700,000th iPhone sold in May, and boosted wireless data traffic by 17.5 in Q1 2010 vs Q1 2009. Q2 should be much more impressive as smartphones rise on track with 5M units sold by EOY 2010.

And 3D TV is becoming a reality (also on time for the FIFA World Cup), 3D is bound to pop up on Korean mobile phones as soon as possible. It's a matter of pride for Samsung and LG, it's also a priority for local authorities who are planning the country for very very high speed broadband.

That's for 2013. But mobile network capacity will become critical much earlier, even with LTE, and Korea's dominant operators (SKT and KT) are intensifying their aggressive race for WiFi hotspots.

mot-bile 2010

* see "KT claims 500,000 iPhones"

Google TV - watch for commercials

At Google I/O 2010, developpers were offered Frozen Yoghurt and a nice cartoon. FroYo is Android 2.2's nickname, the cartoon an introduction of Google TV* :



Nothing disruptive here. The message to developpers ? Come join our ecosystem, dig this Sony screen, check that Logitech box and wireless keyboard (and you haven't seen our Google Tablet yet), hear that Intel inside jingle from our teevee, enjoy these Android apps, enhance your tube with YouTube, watch those flicks on Jinni.com, see how this Flash animation rocks... We don't do Jobs, we do our job, folks.

mot-bile 2010

* google.com/tv

Euphemism PR 101 : "Nexus One changes in availability"

As Andy Rubin, VP, Engineering, put it in Google's most elaborate backpedaling announcement ever, "innovation requires constant iteration".

I can't wait to see the next iteration of such innovative PR.

A few months ago, when Google was trumpeting online distribution for its Nexus One, I pointed out that "Google are not into distribution, IRL.*" This operation was bound to fail : not only because this is not Big G's trade, but also because Big G cannot grow bigger in every single dimension without endangering its own stability, including from a regulator's point of view. Furthermore, yes, "it's clear that many customers like a hands-on experience before buying a phone, and they also want a wide range of service plans to chose from".

So the only questions were "when" and "how". When would Google stop this joke ? The answer is today. For the "where", the official Google Blog was the natural channel. Now I really loved the "how" they did it :

- Google is not stopping online sales : "Nexus One changes in availability"

- Google is not abandonning independence : it offers "more retail availability" and is going to be "working with partners"

- Google is not closing its online store : "we'll stop selling handsets via the web store, and will instead use it as an online store window", and we even call this innovation "from retail to viewing".

Now it takes guts to deliver such a pitch without guffawing. Google probably learned that skill from Chinese authorities.

mot-bile 2010

* "Google Phone At Hand. No Kindling."

Disney - SK Telecom JV

SK Telecom and The Walt Disney Company announced during the Seoul Digital Forum a 51/49 JV meant "to Launch Korean-Language Disney Channels in South Korea"*.

Already available in Korea, Disney Channel and Playhouse Disney Channel will develop local content and diversify to new platforms (HD multiplex, SD over cable, IPTV...). Once okayed by the Korea Communications Commission, this partnership shall bear fruits next year.

Disney picked a strong partner : more than a leading operator, SKT is a multimedia and technology powerhouse, a local major with a tradition for exclusive, premium, and even in-house contents. The main question is : will actual innovations come out of this partnership and be rolled out internationally ?

In the common press release, SK Telecom's President and CEO Man-won Jung seems in the mood for this kind of love : "The joint venture with Disney carries significant meaning, especially considering the business environment of nowadays where customers consume content not only through television, but through an array of devices including mobile handsets, laptop computers, and tablet PCs. In the future, by forging a close strategic alliance with Disney, we hope to create more opportunities between the two parties."

But Andy Bird, Chairman, Walt Disney International centers the scope around the consumer and Korean local market : "South Korea is one of the most exciting digital media markets in the world. Disney's creativity and innovative content, combined with SK Telecom's leading global expertise in digital media and telecommunications, present a unique offering that meets the growing consumer appetite for quality family entertainment where and when they want it".

Disney has always been a follower in new technologies, embracing them once they've been proven robust, absorbing an expert if necessary. Even if SKT were to fail in altering this tradition, this majority stake definitely confirms its expertise and success as a media, far from its original trade.

mot-bile 2010

* "SK Telecom and The Walt Disney Company Announce Intent to Form a joint Venture to Launch Korean-Language Disney Channels in South Korea" (SK Telecom Press Release - 20100512)

Google and Verizon eye a pad - or at least a patch

In interviews to the Wall Street Journal and Bloomberg*, two Verizon Wireless execs confirmed the carrier's discussions with Google to launch a tablet running on Android OS.

The absence of such discussions would have been surprising.

Verizon and Google will probably accelerate TTM for one manufacturer, very much the way they did with Motorola for Android handsets, and together they have enough power and motivation to close the gap.

Close the gap ? For Verizon Wireless, tablet TTM is definitely less important than LTE TTM, and recent LTE trials in Boston seem to confirm this sense of emergency. VZW can not only remove its CDMA-GSM handicap vs AT&T, but also enjoy a temporary competitive edge when its Texan rivals struggle with capacity issues (partly courtesy Apple). Likewise, tablets and other devices will be less critical than the ecosystems behind : AT&T may or may not keep its exclusivity with Apple for the iPhone until 2012, it still managed to open up to both the Kindle and the iPad. V wants more control on the value chain than pipe filling, and on a more sustainable basis ? Time to prove it.

Close the gap ? I never considered the key race to be between Apple and Google. Mountain View is more aiming at Redmond's throat than at Cupertino's. Yes, Apple the manufacturer is succeeding where Nokia the manufacturer failed, in trade diversification**, but Apple will never enjoy Nokia's record market shares. Yes, Apple played the role of an accelerator for existing usages and business models (ie didn't invent smartphones nor app stores), but Google can go much further and not just because, as expected, it's pushing Android ahead on handsets : Google can literally become a category killer for the wealthiest players around in the telecom and software industries. Operators know it, Microsoft knows it. A success of Google's instant cloud scratchers on bigger screens represent a much bigger disruption than the iPad itself (not really a game changer in the global ecosystem).


mot-bile 2010

* "Verizon, Google Developing iPad Rival" (WSJ) / "Google, Verizon in Talks About a Rival to Apple's iPad" (Bloomberg)
** OK, Nokia has gone a long way from timber

As Daum goes (a bit) mAd, SK Telecom jumps to L Commerce and Mobile Virtual Banking Operator

I've been expecting a lot from Korea's leading portals Naver and Daum*, but so far, they've not exactly revolutionized mobile internet. For instance, they've only recently set a timid foot into mobile advertising**.

To their credit, it's hard to get a slice of the wireless pie consistent with their impressive web portal market share, even after the implementation of USIM cards, which undermined Korean MNO's lock on handsets, and even after the rise of smartphone apps, which also weakened their positions on the value chain.

According to KoreanClick, #1 NHN / Naver controls 63% of the portal market (31 M Unique Visitors for Naver.com in April 2010) and #2 Daum 21% (28.9 M UV), but #3 Nate (10% MS, 24.7 M UV) can leverage on key enablers provided by owner SK Telecom : the leading cellco, already a quadplay giant, has always put a lot of importance on Location Based Services and financial enablers.

That focus has become even more evident with the creation of the Hana Bank - SKT JV (see "SK Telecom's Wild Hana Card"), confirmed by the first services earlier this year***. The recently rebranded Hana SK Card targets 400 to 500,000 cardholders by EOY 2010.

SKT has also been redefining the "mobile wallet" concept over the past few weeks : leveraging on Visa PayWave radio frequency technology, the "T Smart Pay" (always that "T" umbrella brand of SKT's) concept allows the consumer to monitor up to 8 credit cards, 30 mileage / point cards, and 50 coupons with the same '13.56MHz RF SIM' card (always that "technerdy" trend of SKT's), to the risk of storing all your most critical information on one single device. Each time you present it for a contactless payment, you're proposed the choice between all registered cards.

Of course, Hana SK Card holders can also enjoy a simplified UI :



Here, SKT almost acts like a Mobile Virtual Banking Operator roaming on tens of rival networks and helping the consumer make the most of each buck, picking the best provider depending on the store, account status, promotion... Needless to say that this entry point will be massively exploited for contextual offers : ever since NATE Coupons, SK Telecom has been a major innovator in couponing and in July, SKT will launch 'L-commerce', a new set of Location Based Services bound to confirm the return of its mojo.

About ten years ago, I was impressed by how deep this player ventured into new trades like media or banking. Since then, SK Telecom didn't fully succeed overseas as a classic mobile operator, and at one moment lost some appeal as the marketing king at home, but lately, it seems to be experiencing a revival. Even telematics are back in fashion (SKT MIV / Mobile in Vehicle).

Note that on the more traditional battlefield, SK confirmed 8 more Android handsets by EOY (see "SK Telecom pushes Android"), and KT remains the most likely guess for the iPad exclusivity : Apple's latest gizmo is being approved for import, and TriGem, Samsung, and LG will suffer from a minimized delay before their own tablets****.

mot-bile 2010


* see "KT claims 500,000 iPhones"
** "Daum rolls out mobile advertising network" (JoongAng Daily 20100511)
*** see "Wal-Mart's Vudu Trance - home entertainment and apps"
**** see "Samsung S Pad in a Flash"

Samsung S-Pad in a Flash

LG and Samsung are rumored to launch their answers to the iPad during the second half of the year. Fellow Korean TriGem will shoot first (end of H1).

Samsung's S-Pad is expected to run on 3G (SK Telecom) and Wi-Fi, and on an Android OS, providing a bigger playground for Flash, which remains banned on Apple's iPad (to cheer them up, Google offered Adobe execs a couple of Android phones).

Repositioned as an editor, Apple has a right to decide what it considers entertainment or education, what fits its editorial line. But it should be careful not to position itself as AOL did against the world wide web. Apple wouldn't want to suffer from an AOL syndrome.

mot-bile 2010

HP buys a Palm ? Big deal...

$1.2 billion for Palm Inc., the sale itself a non-event, 3Com and its spin-off reunited under the Hewlett-Packard umbrella... times have definitely changed over the past 10 years.

Even if the Palm + HP combo can propose a seamless handset-PDA-tablet-laptop-desktop platform, this episode is not likely to bring real disruption to the market. And to me, it doesn't mean that HP is becoming smart : it simply confirms that smartphones are becoming if not commodities at least more and more common things.

No change for Microsoft : WebOS won't kill Windows Mobile by itself. But the eventual emergence of a more consistant open / Linux-based alliance remains more than ever the base case scenario.

No change for Google : it still needs to succeed regardless of the OS, and Android / the Open Hanset Alliance are bound to merge with some rivals anyway.

No change for Apple : Cupertino still needs to change its strategy if it wants to become THE leader, which I doubt. And there's still a lot of money to make where it sits (and moves), including as an editor.

No change for Research In Motion : it still can stick to its profitable niche, or accept a nice offer.

And most of all, no change for Nokia : the leader in hardware and mobile OS has not been acting like one for too long.


mot-bile 2010

ITA Software : Google's dark cloud obscuring the skies ?

mot-bile 2010 - Location, location, location. That's what matters when you're purchasing properties.

ITA Software Inc., an expert in online travel solutions, is said to be the next target of Google. Google, a young and promising company, is said to have a few ambitions in things mobile. Come to think of it, Google Earth is the world's biggest virtual airline.

Big G strikes when all airlines are grounded by an icelandic volcano, and competitors can be fuming : some rely on ITA for their travel search engines.

Google's engines probably won't be damaged by their ashes.

Korea Telecom Qooks ebooks

mot-bile 2010 - In spite of a long literary tradition, Koreans are not big readers. Worse : in 2009, 90% of Korean publishers didn't print any new book.

Through the Korea Electronic Publishing Association, the Ministry of Culture is betting on ebooks to revive the habit (target : 100,000 ebooks per year). Kyobo Book estimates the Korean market at about KRW 1 tn (over USD 900) EOY 2010 and KRW 2.4 tn EOY 2012.

The Ministries of Knowledge Economy and Education are joining this national effort, which will also benefit local manufacturers : those guys didn't wait for the local market to do something (ie Samsung Papyrus, iRiver Story), but the issue became sensible after the launch of the iPhone, and the iPad buzz.

Harmonizing the 40 or so existing distribution platforms is a key factor of success, and the association recently held an "e-publication standardization forum" at the Korean Education & Research Information Service (KERIS).

Education is key in a country where families spend fortunes to help their kids survive one of the most competitive education systems in the world.

Precisely, for its first ebook distribution partners, Korea Telecom picked Woongjin Thinkbig, Inc., which holds a strong position in private tutoring text books, and Wisdomhouse Publishing Co., Ltd., which also has a specialization in educational contents.

The funny thing about the service is the brand : we've already mentioned Qook, KT's umbrella brand for home services. "eBook cafe / Book Cafe" makes sense because book cafes are getting popular in Korea. But "QOOK Book Cafe" bookcafe.qook.co.kr) sounds like the Java hub for rogue accountants.

Lagardere Active meets YouTube

An interesting partnership was announced at the 2010 MIPTV between Lagardere and YouTube for the international distribution of online videos, ranging from short programs to fictions and documentaries.

Turning the group's traditional media brands (ie Elle) into truly multimedia cash machines... this 3-year agreement is vintage Didier Quillot, who already boosted digital revenues to 7.5% of Lagardere's total turnover.

YouTube / Google promotes its own key features : advertising and DRM, with the IDfication of each content and the total control of diffusion for each region. Of course, this is pure streaming and no download is allowed.

Both partners will share advertising revenues, and the enduser will access new contents for free :
. short in-house programs (caranddriver.com, elle.fr, europe.fr...) : 7,000 by summer 2010, 15,000 by EOY. Distribution : 45% for the French market
. long programs (Lagardere Entertainment) : 315 hours by summer 2010, 600 by EOY. Distribution : 80% France 20% International
. TV programs and cartoons from Lagardere channels, including TV archives. Distribution : 100% for a French audience.

mot-bile 2010

iAdMobsters and multitaskers

Apple will take a 40% for all ads on its new advertising platform : iAd.

Google will gobble AdMob (whose moto happens to be "Enriching Mobile") with the benediction of regulators on the grounds that Quattro Wireless* + iAd = Google left some room to whatever's left of competitors.

iAd focuses on in-App advertising across iPhone, iPad*, and iWhatevercomesnext. Steve Jobs estimates the potential at 1 billion ad impressions per day on existing Apple devices.

Google focuses on everywhere, including iPad, iPhone, and iPutaspellonyou. It's been a long time since Big G ditched that billboard advertising "over 1 billion burgers served".

But iPhone OS 4 also offers improvements in multitasking, a word Cupertino definitely seems to be getting a grasp on.

mot-bile 2010

* snatched by Apple last January (see "SK Telecom pushes Android"). Google's purchase of AdMob last September has not been okayed yet.
** which eventually sold 450,000 units in 5 days instead of the 700,000 on day one earlier outoftheballparked by a fan (see "iFad's deliberate marketing blur") - anyway a good score. More significant : 600,000 ebooks and 3.5 M apps downloaded (iPad apps store claims 3,500 applications).

FCC : the end of regulation or the end of non-regulation ?

mot-bile 2010 - A regulator that fails to regulate may need some fixing.

After being awarded the right to deregulate broadband by a Supreme Court ruling in 2005 on the ground that it would not be a telecom service but an information service, the FCC allowed broadband subs to plug whatever hardware or software they pleased to their access, but after that ordered ISPs to fight against peer-to-peer abuses. Comcast logically sued and won the case at a federal court.

That same FCC has also been working on a much advertised National Broadband Plan which now appears to be left to its own devices.

The only way out of this farcical situation would be for lawmakers to restore some regulatory power, a move that could prove unpopular for partisans of freedom on the liberal front (no regulation for the internet : that's fascism) as well as on the libertarian side (no regulation whatsoever : that's socialism). If Obama thought he was done with ideological battles between health care madness and financial reforms, here's yet another hot potato to catch before mid-term elections.

iFad's deliberate marketing blur - Naver / Livedoor

With 700,000 units sold on launch day including pre-orders (according to Gene Munster, Piper Jaffray), iPad already found its spot on the market. Apple hypists fueled this early success, but other segments may follow, including technophobe seniors who are neither interested in computing nor in exotic web browsing.

Other players targeted this segment, but the Orange Hello and Orange Tabbee proposition, for instance, is clear a deterrent for hypists (see "Orange Hello, is it me you're looking for ?"). Why ? Because it is marketed around functionality-segment duos that mirror the very classic engineer-marketer binome.

The smartest thing about the iFad is the deliberate marketing blur : Apple refuses to build artificial segmentations and prefers to let the market decide, hoping the device will find more niches than initially thought. But the manufacturer pushes the concept with a clearly identified "software-level warranty" to help the hardware concept look more sustainable in the potential purchaser's mind : iPad v1.0 is not the best tablet*, just like iPod was not the best PMP or iPhone the best smartphone, but just like iTunes came from Apple computers to secure the launch of iPod, iPod music platform served as a base for the iPhone, and iPhone apps are paving the way for the iPad.

So if the iPad is not a category killer per se, it could help kill artificial categories, and tear down artificial walls.

Just one word about NHN / Naver, who would be about to snatch the Livedoor portal and its 30 M subs put on the market by LDH Corp (formerly Livedoor Holdings). It reminds me of the Daum / Lycos deal a long time ago. Korea gains an entry point in Japan the same way it did in the US : in a very traditional way. And I hope Naver has bigger plans than Daum. For instance, I wonder which role Naver, as it enters a new country using non-latine alphabet / characters, intends to play in the promising hosting business related to Internationalizing Domain Names in Applications (IDNA).

mot-bile 2010

* and certainly not the best ebook : too heavy, UI and screennot optimized for reading...

KT claims 500,000 iPhones

We've seen earlier how Korea, a laggard in smartphones, woke up with the help of iPhone* and the arrival of Android**. Now "smartphone" and "apps" pop up anywhere anytime, relegating "ubiquitous" or "well-being" to corny conversations. Among recent developments :

. KT announced today that it sold its 500,000th iPhone four months after launch, and that it's now batting a steady 4,000 new ones every day. Good score, but Samsung's Omnia 2 (Windows Mobile) will remain ahead (600,000th handset sold yesterday). Yet, Apple reaches beyond the smartphone, and KT estimated its market for apps, contents and software at KRW 470 bn, plus KRW 230 bn for accessories (KRW 700 bn means about USD 600 M these days). Unsurprisingly, early bird iPhone caught heavy mobile internet users : 44 times more than other KT customers (includes the majority of non users).

. Last month, Samsung made the headlines by snatching Android trademark for hardware in Korea, preventing rivals from branding any Android gizmo beyond the OS. LG's "Andro-1", an horizontal slider with keyboard sold exclusively by KT, definitely sounds borderline. Andro-1 itself is borderline : even if it came after Motorola's MotoROI (2.0) and the Samsung SHW-M100S (2.1), it runs on Android 1.5...

. In a country plagued with voice / email phishing scams, or even North Korean e-blitzkriegs, the brutal success of smartphones was bound to cause a considerable number of attacks much scarier than Rick Astley***. Competition among crimefigthers is quickly going wireless, and local expert AhnLab released new versions of its star antivirus : V3 Mobile for Android and V3 Mobile+ for iPhone. But operators don't want netcos to claim their own territories and the next day, mobile leader SK Telecom decided to offer McAfee antivirus to all its Android subs. Besides, even if for the moment the bulk of smartphone users are over 18, adult content is also becoming an issue...

Local internet powerhouses Naver and Daum don't want to be followers - Daum even planned to equip all its staff with iPhones ahead of the launch. Both are seizing opportunities and multiplying applications, and the coopetition between Korean netcos and MNOs will really become interesting.

mot-bile 2010

* "iPhone rocks Seoul and sacred cows"
** "SK Telecom pushes Android" followed by "Wal-Mart's Vudu Trance - home entertainment and apps"
*** see "iPhone worm raises its ugly head : Rick Astley"

Video In Print : an example in video

French advertizers' Bible Strategies published* this interesting video of a video : inserted in Enjeux-Les Echos (business news magazine), all commercials for Citroen DS3 car are played on small LCD screen with a rudimentary mike :



Beyond the mag (10,000 copies), the campaign run by agence H (Groupe Havas) also includes billboards featuring video and interactivity with cellphones.

For this model, the carmaker and its agency have been targeting urban hypists with an "anti-retro" claim, where Marilyn Monroe or John Lennon deliver dopey versions of "think different, think Pepsi".

The screen and holes in the cardboard for the mike do look retro compared to say the seamless and flexible epaper on that Minority Report subway, but that's enough for the buzz.

mot-bile 2010

"Le magazine Enjeux-Les Echos diffuse une vidéo dans ses pages" (Strategies 20100330)

Broadband by Google "small dot" com : cloudy, with chances of bitballs

mot-bile 2010 - Over 190,000 individuals and 1,100 communities contributed to Google's request for information about its "experimental fiber network"*.

Of course, the aim of this RFI was to optimize the buzz, to impress the FCC, and to scare competitors : the only thing Big G keeps saying about its "Ultra high speed broadband" project is that it will reach 1 Gbps FTTH (don't expect Google Broadband to be con-TISPated**), and that the "experience" will involve between 50,000 and 500,000 customers (small figures for a boolean search, but half a million sounds like a Warren Beatty kind of testbed).

So instead of a network coverage map, Google delivered this splendid PR map where "each small dot represents a government response, and each large dot represents locations where more than 1,000 residents submitted a nomination" :



And "wherever we decide to build" is up to us guys.

Said guys are in Vegas (along with Google, of course) at the CTIA show, listening to T-mobile about 3G++, Verizon Wireless about LTE, and Sprint about "4G" WiMAX***. All making plans to prevent network overloads courtesy iPhone, Android et al.

Next thing you know your Ma and Pa CLEC / coop telco looks attractive again because Google needs a really rural testbed in Armpit, ND or any other "small dot" on their map to tell the FCC they're not only rolling out fiber in San Mateo or Houston.

Wheather forecasts ? Cloudy, with chances of bitballs.

* "Next steps for our experimental fiber network" (Official Google Blog 20100326). Note that the number of communities almost doubled between the 3/26/2010 10:00:00 AM post and its 3/26/2010 05:26:00 AM update.
** "Google TiSP - US Open at Flushing Windows"
*** "HTC EVO 4G : Sprinting to 4G... or rather 4G WiMAX/3G EV-DO Rev. A"

HTC EVO 4G : Sprinting to 4G... or rather 4G WiMAX/3G EV-DO Rev. A

Sprint unveiled the HTC EVO 4G at CTIA : "America's first 4G phone" will be "Coming Summer 2010", and offer "3G/4G mobile hotspot capability-extend the power of the Now Network"*.

4G ?!? Don't expect LTE but simply 4G WiMAX combined with 3G EV-DO Rev. A. Yes, WiMAX got the 4G label**, just like DECT was 3G ITUwise.

But this HTC EVO is far from being a dud, dude. It also features :
- from Google : Android 2.1, Android Market (30,000 apps up to now), and among Google mobile services clearly advertised by Sprint : Google Talk and Google Voice.
- from HTC : a 4.3-inch screen ("with unique kickstand for easy media viewing", a connection "to your HDTV so you can watch HD movies" on a bigger screen), HTC Sense UI (with "social networking integration with Facebook, Twitter, Flickr and more"), 1,500 mAh Lithium battery, dual cameras (8 megapixel primary, 1.3 megapixel front-facing), proximity and motion sensors, digital compass, 1 GB ROM, 512 MB RAM
- from Qualcomm : 1 GHz Snapdragon processor
- from the air : Wi-Fi, GPS Navigation, Stereo Bluetooth, FM radio
- for the plug-ins : microSD Card slot, micro USB, 3.5 mm headset jack, HDMI output...
- from Sprint : Now Network, Sprint TV...

Yeah. The operator is not doing much beyond rolling out his 27-market WiMAX network and putting a sticker on the phone. The real PR winners here are HTC, Qualcomm (stuck to its proprietary 3G but associated to "4G"), and even more Google : Android starts outhyping iPhone, and Google mobile VoIP gets a front seat.

Hoping that Sprint's networks and HTC's batteries won't spoil the fun.

mot-bile 2010

* see now.sprint.com/evo
** as we saw earlier ("Aloha's long goodbye, Standards Wars Episode 4G and the phantom menace"), the ITU has been kind to WiMAX.

Energize your handset, nevermind the consequences

Indian manufacturer Olive Telecommunications launched a mobile phone where AAA batteries can give you up to 3 more hours of conversation when the lithium-ion battery is exhausted. "Olive FrvrOn" (Forever On, not Fever On) costs $37 and targets rural areas where plugs are not always available.

Smart and simple, but not very environmental friendly. How many AAA batteries do you think will be recycled in the dead middle of India ? How about the cost of logistics for this noria of 11.5 gram AAA batteries ?

Now there is a power issue here (and there as well). Such manufacturers as Samsung are investigating other solutions, more or less relevant*, but all based on a more sustainable concept : generate your power on the spot, be it using your own force of with the help of the sun.

So OK, this manufacturer will sell a lot of devices and change the lives of a lot of people but I hope this quick fix won't be too successful.

mot-bile 2010


* see "Samsung's power grip", "Samsung Crest Solar"

Wal-Mart's Vudu Trance - home entertainment and apps

mot-bile 2010 - What is exactly "home entertainment" according to Wal-Mart ? Everyday low prices for home movies or everyday more promotions for everything else on your TV screen ?

The Bentonville, AR giant acquired VUDU, Inc, an online video service embedded in broadband-ready TVs and Blu-ray players, and "combining VUDU's unique digital technology and service with Walmart's retail expertise and scale will provide customers with unprecedented access to home entertainment options as they migrate to a digital environment".*

But Wal-Mart also mentions VUDU Apps, a very crucial entry point in households for all sorts of services, including Twitter or Facebook, the kind of "web family names" we mentioned earlier as the hottest TV stars of the year (see "Skype on your TV : home improvement ?" - 20100106).

Wal-Mart was not the only bidder for this entry point : it won over direct rivals (Amazon & co), victims of Vudu curses (Blockbuster & co) media manufacturers turner entertainers (Sony & co), or the usual Redmond suspects (Micro and Soft).

Now back to the smaller screen, but still in the retailing arena : SK Telecom and Hana Bank eventually released their joint services** in Korea. Push and pull location-based marketing make sure you have always an incentive even if you came out without your paper coupons.

Note that in their latest TV ads, SKT are marketing Android a very cute way with a green robot dancing on "That's the way (uh uh uh uh) I like it", and that's likely to boost the brand's fun factor. The Android brand, I mean : the character bumps into SKT's dull "T" logo and roars at it... There was probably a smarter way of celebrating this encounter of the third kind.

* "Walmart Announces Acquisition of Digital Entertainment Provider, VUDU" (20100222)
** on this killer alliance, see "SK Telecom's Wild Hana Card" (20090612)

WACking Apple's App Store : United Colors of MNOs or WAP redux ?

The Wholesale Applications Community (WAC) chose the Mobile World Congress in Barcelona to announce its foundation. The aim it to make application standards transparent, and services available on as many platforms as possible, or as the association puts it from the customer's point of view : to offer "a broader choice of innovative applications and services available on a wider choice of devices than ever before". From the application developers' point of views it goes like this : "a single gateway (...) to access a vast potential customer base".

How big ? Among the 27 founding members of the WAC, 24 operators claiming 3 bn subs : America Movil, AT&T, Bharti Airtel, China Mobile, China Unicom, Deutsche Telekom, KT, Mobilkom Austria Group, MTN Group, NTT DoCoMo, Orange, Orascom Telecom, Softbank Mobile, Telecom Italia, Telefónica, Telenor Group, Telia Sonera, SingTel, SK Telecom, Sprint, Verizon Wireless, VimpelCom, Vodafone, Wind.

The casting is less impressive for manufacturers : Samsung, LG, Sony Ericsson. Significant players, but all losers in the smartphone standards. Yeah, Samsung is showing off its Samsung Bada OS in Barcelona but come on, that one is not going to become number one. Even Nokia and Intel combined can't make it with their brand new Meego.

Anyway, here's the deal for developers : on one hand, become one of the billion plus apps available in the App Store reserved to iPhone users... and on the other, tap into the 3 billion plus market opened by this elite of haves and havemores.

Tired of the multiplication of proprietary platforms ? The WAC intends to make that layer transparent for you. And when the WAC writes "developers will only have to create one version of their application and this can be used on multiple types of devices and operating systems (such as Symbian, Android, Windows etc)", it's up to every potential "etc" to decide : keep playing it solo or join the party.

Some developers may remember how WAP struggled in its early stages. Will this WAC work ? Fool me once, shame on... shame on you. Fool me... you can't get fooled again'.

Can you ?

I think Vodafone, Orange & co remember perfectly the WAP episode. Since then MNOs proved they could work on common platforms to boost the ecosystem (ie Gallery in France). And if they fight against each other, they would love to commoditize markets they cannot rule anyway.

I'm not worried about technology roadmaps and paths.

But the editorial line... believe me, that one is gonna be a long and winding one.

mot-bile 2010

* see "Leading Operators Unite to Unleash Global Apps potential" (20100215 - on wholesaleappcommunity.com, the association's website)

Microsoft Pink Phone : sexing up Windows Mobile 7

A fun handset with an innovative ergonomy and an app store ? Before Apple came Danger, who remained below the radar after Microsoft purchased it.

Granted. The Hiptop has a vintage look of a Minitel II, but what matters is the platform, and the industry has been bracing for the Danger + Zune + WM7 combo for months.

What's in a (code)name ? Pink stresses the need to sex up the Windows Mobile platform against iPhone and Android.

WM performed well in Korea against the iPhone (Samsung Omnia)... but only for lack of an alternative before the arrival of Android (see "SK Telecom pushes Android"). Motorola's Motoroi has just been introduced on a market suddenly converted to smartphones, and Samsung and LG are working double time on Google's platform.

Microsoft, Apple, Google... sooner or later telecom "incumbents" will raise their voices, and leader Nokia will have to do what it does worst : look cool, not cold.

mot-bile 2010

Google Smokescreen Computing : May The Dark Fiber Be With You

Google has made some progress since its previous experience as an innovative ISP (see "Google TiSP - US Open at Flushing Windows). Big G issued a nice video (see below*), but here are a few keywords :

Crowdsourcing - "Today we're putting out a request for information (RFI) to help identify interested communities".

Interested in what ?

1 Gbps FTTH - "We'll deliver Internet speeds more than 100 times faster than what most Americans have access to today with 1 gigabit per second, fiber-to-the-home connections. We plan to offer service at a competitive price to at least 50,000 and potentially up to 500,000 people."

A lightweight on the market ?

Lobbying - "We've urged the FCC". We'll soon be urged by the EU but that's not the issue of the day...

Not in a hurry when it comes to digging your own grave ?

Digging - "We'll test new ways to build fiber networks". Like we don't actually build but find partners, or bail out people lost in the dark fiber, or invent smokescreen computing.

Smokescreen computing ?

The highest stage of cloud computing.

mot-bile 2010

*

"Think big with a gig: Our experimental fiber network" (20100210 - Official Google Blog)

Google Avatar

"Parisian Love", Google's Superbowl ad. Rom@nce, cliches and snapshots... as artificial and predictable as Avatar, only cheaper. And just like Avatar, you keep watching :