Saving private Korea Inc - back to subsidies, but no way back

Better late than sorry. The MIC eventually allowed cellcos to subsidize handsets. Korea Inc can now boost DMB, WiBro and W-CDMA technologies at home. Bad news for SK Telecom's competitors*, good news for Samsung, LG & Co, who would have preferred this help much earlier for their international competitiveness**. Yet, note that debitel's DMB trials in Germany*** have just been confirmed, along with a nationwide coverage in 2007 (8 cities for the World Cup, 12 by the end of 2006).
The MIC set a few rules for subsidies (only 62% of subscribers can enjoy them now, and 18 to 24 month will be required between each favor)... with the notable exception of next gen handsets (DMB, W-CDMA, WiBro...). To avoid a loss of face, the Government intends to monitor the process even more closely than it does with real estate, thanks to a weird kind of reverse auction.
This Monday morning, March the 27th, each MNO will give its subsidy grid to the regulator and no change will be allowed untill April 27. You can give more but can never lower your level of subsidy.
Analysts expect a reasonable start (around KRW 100 k per handset - about $100), but all gloves are off... which might help those who'll purchase the brand new ring / wrist phones recently announced by manufacturers.
But the device of the week was presented by Samsung at their Mobile Solution Forum in Taipei. It's not a handset but the World's first SSD (Solid-State Drive) laptop : the 32 Gigabyte flash-chip drive is four times lighter than a 30 Gigabyte HDD, and the manufacturer expects the technology to snatch 30% of the laptop market with a $200 unit price by 2008 (the price is set**** at $500 right now).



* even if KTF will turn a few heads with KTF Technologies Inc's ultra-slim phone (7.9 millimeters - MP3 player - 1.3-megapixel camera - electronic dictionary with over 300,000 English words...).
** see "Subsidies : boosting subscriptions of exports ?" (20051026).
*** see "CeBIT unnovations" (20060312)
**** I don't say "fixed" because Samsung joined Hynix in sending employees in jail for price-fixing in the semi-con sector (the $300M fine paid last year didn't protect the individuals working for the company).

Alcatel - Lucent : the swiftness of paper

5 years ago, Lucent would refuse a merger with Alcatel because it wasn't a merger of equals. I'm not sure it is this time either, but do Lucent shareholders have a choice ?
This non-event simply epitomizes the end of Ma Bell as we knew her. AT&T, the born again brand, seems to enjoy a new life from Plano, TX... but whatever happened to those prestigious labs ?
It's no more about the creativity of human beings, the ability to cope with new environments, to face the future. It's about the swiftness of paper, the ability to purchase evolutivity, to buy a few months.
Today's R&D does require a pervasive networking approach, but beyond the imperialistic / Cisco model. At the end of the day, you can waste a few months if you gain a beautiful mind.

Apple - something rotten beyond the Kingdom of France

Proprietary digital media players are now illegal in France : consumers should be able to play the tunes they purchase on any given platform.
RealNetworks, Microsoft and Sony have less to lose than Cupertino's darling : Apple is even more iTunes dependant than iPod dependant.
If abandoning the French market won't kill the group, clinging to a non-durable business model certainly will. Steve Jobs can't say he wasn't warned : his company has a knack for narcissist autism.

Master Voda should gather force instead of pleasing the audience

Unsurprisingly enough, the Vodafone KK exception is over. Now, Japan Inc controls everything. AOL ? Nipponized. Yahoo! ? Japanified. By SoftBank, the country's #3 MNO's new owner. Vodafone ? Sorry lads, Masayoshi Son intends to get rid of the brand ASAP.
Arun Sarin will give the bulk of the cash (£6bn out of 6.8) to his shareholders ; more value for the short sighted. At least, Sir Christopher's successor starts preparing a much awaited coming out* : "We may no longer be mobile only. We may get into other services in the telecommunications space (...) not particularly (...) landline assets". A glimpse of a leader's grand vision or a shy follower's wishful thought ?
So the World's biggest mobile community focuses on Europe, with a few colonies around (as a MNO, M-VNO or reseller), and a big problem to solve in the US. I guess a smaller but stronger and more united Kingdom makes sense, but it would require a genuine shift in the business model to create long term value. Neither the flamboyant-arroGent way, nor the shareholder-first way - a different way.
When you think about it... what did this XXIst century commonwealth get for their £112 bn back in 1999 ? Arun Sarin plus Airtouch**... Time to prove all that was more than a touch of hot air.


* see last blog.
** allright... and some more paper to wrap Mannesmann up, not to mention a glass of Chivas Regal for J6M.

NTT - DoCoMo : remerge, split-up, disrupt ?

You don't want 65% of your group's profits wandering too far away. So NTT want DoCoMo back. But new entrant MNOs strongly disagree. While announcing the selection of Ericsson as eMobile Ltd's main 3G network provider, CEO Sachio Senmoto asked for an AT&T-like split-up of the whole shebang, including DoCoMo because of their 56% market share. NTT is already a patchwork of regional units, but who would dare touch m-Japan Inc's champ ?

eMobile's extreme request was mainly meant to prevent the reconstitution of NTTsama Bell. Even DoCoMo can be a struggling leader... but with the full back-up / backhaul of its mother company, no competitor could ever dream of annoying them.

I'd like to know what DoCoMo's top execs think about a remerger with NTT. The cultural gap with the fixed dragon has been widening for years, the group would be under even more scrutiny, and the "everything mobile / pervasive mobility" vision would badly suffer the contradiction... But shouldn't they somehow be asking themselves how much they need a truly convergent profile to remain at the top ?

Orange are logically adopting France Telecom's integrated vision and even at Vodafone, former Mannesmann - Arcor people keep pushing for a descent in the "fixed" arena (again, the other day, at the CeBIT, a Vodafone DSL revival). If I were DoCoMo, I would at least consider reviewing my 10 year old vision. And why not, seize the opportunity : escape the risk of NTT dragging down the company and demand a formal and final split-up. I want my liberty back, I want to deal with any fixed player I want or why not, build my own.



* More about eMobile : in "J:COM's quadruple play - within the fence" (20060210) and in "3Greenfield Japan" (20051113)

CeBIT unnovations

More than ever, the wireless circus focused on Barcelona rather than Hannover. That was Barcelona's first year and the CeBIT goes far beyond mobility, but still.
Samsung's 10 megapixel picturephone is no more a disruption than Sony Ericsson's 4 GB W950. xandros added UMTS to their Linux laptops but the technology was already a commodity. Microsoft eventually unfolded their Origami* but the UMPC (Ultra Mobile Personal Computer*) looks so much like the PDA all Samsung employees have been carrying everywhere in Korea for a couple of years. At the government's level, UK goes NGN and the EU goes RFID, but that's about time. I don't know how DVB-H is doing up there but France Telecom R&D seem to bet on Far East Asia (especially Korea and China) for mobile TV. What else ? Samsung will deliver DMB handsets in Germany on time for the World Cup, as expected**. With debitel as the entry point ; quite a disappointment. The industry eventually realize genuine VoIP over mobile requires HSUPA and a more mobile world requires more fiber. That was CeBIT CeLEBRATING 20 years of innovation.

Europe may remain the heart of GSM / 3GSM but for the rest, everything is being decided somewhere between Asia and America.


* see "Origami Project - a crush for paper tigers ?" (20060302). Before the take off, MS decided to nest their UMPC in the Windows XP environment : http://www.microsoft.com/windowsxp/umpc.
** see "Play it again, Samsung ?" (20060216).

Mobile TV between a ROK and a hard pace

Did Europeans learn the lessons from 3G ? Let's see if they can - with or without the contribution of the EU - handle mobile TV any better than UMTS.
While the war of standards is raging, ROK Corporation keep rolling with a solution meant for mass market and 2.5G... well, the mass of Nokia smartphones plus a few Sony Ericssons, a Samsung and Microsoft PDAs.
ROK TV is not actual mobile TV but (potentially TV) programs for mobile : ROK Player's 'Plug and Play' facility "enables people to watch full-length audio-visual programmes on their mobiles without the need for streaming or download".
Last year's launches went so well ROK Entertainment decided to let the masses try ROK TV contents for free (£0.99p per channel per month or all 12 channels for £9.99 per month). That's the official version. The fact is ROK need to act quickly before European MNOs find a common ground on mobile TV.
After the UK, ROK announced launches in the rest of Europe's top 5 (Germany, Italy, France, Spain), but also the USA, Taiwan, Thailand and even China (where they recently launched ROK Lotteries). But not ROK itself - The Republic Of Korea, where the company does have a subsidiary and intends to propose the whole set : ROK Player, ROK TV, ROK Lotteries and ROK Gaming.
ROK also developped a patent for memory-card storage of contents for mobiles, and that could prove to be an even more profitable spot : their Taiwan JV is a partnership with Catalyst Logic, a company part-owned by UTech (the world’s #3 content-contained DVD/CD producer) which is itself part-owned by Riteck Corporation. Riteck makes 40% of the world's blank CDs and happens to be a major manufacturer of memory-cards for the mobile industry...


ROK Entertainment Group : http://www.rokent.com.
ROK Player : http://www.rokplayer.com.
ROK TV : http://www.rok.tv.
ROK Corporation : http://www.rokcorp.com.

Bells ringing - Vivendeals ahead

Baby Bells grew up since Ma Bell died. AT&T Jr and Verizon should snatch BellSouth and Qwest, and three years from now max, they somehow will have built an international stronghold in the wireless area.
Vodafone will sell (Verizon, Vodafone KK), but also buy. As rumors revived, the French government released a report on potential targets from France's CAC40 companies. Among them, Vivendi Universal are enjoying their own headline news : the "Universal" part is dropped, and SFR's lifetime ad agency, Publicis, just snatched the France Telecom - Orange budget. Maurice Levy can split his teams but not his own self. The new budget can definitely mean bigger money, but the risk should be taken only if Levy is sure of getting the whole Orange (especially after a Wanadoo rebranding), and not so sure of keeping the SFR business away from Vodafone adcos.
Vivendi could sell their cash cow but if they want to fight as a European leader in broadcasting an increasing competition, the timing looks perfect.

BlackBerry and Chinese 3G to live another day

RIM eventually found a deal with NTP, but millions of users have had time to sweat and to look for alternatives. Even among the most addicted CrackBerries, some could change dealers next time...
In the meanwhile, the world's first 3G TD-SCDMA videophone is out. It's a Samsung device with a combined Philips / T3G Technology Co. techno, T3G* being the JV founded three years ago between China's Datang Mobile Communications Co. and South Korea's Philips - Samsung JV (Royal Philips Electronics and Samsung Electronics Co.).

Philips are betting more than a few bucks on TD-SCDMA : according to their CEO, the techno will not only be an entry point for the Chinese market (which is anyway also open to W-CDMA, CDMA2000 & beyonds), but for other emerging markets where data isn't so important. Philips even expect some developped countries to add this feature in due time (which is supposed to be not so difficult but hey, that's a vendor talking...).

Samsung should try and sell volumes before Chinese manufacturers take over. After that, collecting royalties through T3G could prove a more profitable business : as it is, TD-SCDMA won't be for high end customers with demanding data needs.


* see T3G Technology Co. website (t3gt.com), Philips news release.

Origami Project - a crush for paper tigers ?

Second week, second teaser on the Origami Project's website*. Microsoft being Microsoft and Origami being the art of paper folding, you must be patient and expect a full basket of wasted stuff before enjoying the real thing.
MS' viral marketing campaign started last year and will culminate next week at CeBit 2006. You can tell they're not familiar with viral marketing (except when it comes to spreading bugs, malware, spyware, stuporware...) : note the quantum leap between the first "hello" and the following "hi there" - what will it be next time : "Hang on", "Wait a sec'", "Got your attention ?", "Still there ?", "Pickaboo !"...?
The suspense is unbearable. How will the damn thing look like ? I guess something less steel-waffle-ish than Dualcor Technologies's cPC**, and something less ToysRUS-ish than the Ultramobile 2007 starring in last year's mini clips.
We already know its main and optional features : the PC DNA, the tablet PC assets (touch screen, pen, always-on, easy boot, easy break...), a medium-sized screen (rather 6 than 10 inches), wireless connectivity (Wi-Fi, 3G, Bluetooth, GPS, digital TV...), multimediapps (WMA & co, games, VoIP...), bizapps (MS Office, MS Server, MS Breakdown...), a few useful excrescences and holes (camera, USB port, card readers...), and of course the full Windows environment (including state-of-the-art BBS : Bugs and Blue Screen).
This iPod-killer / PSP-killer / mXbox was first supposed to cost under $800, then under $600, then again under $500... Come March the 9th, I expect under $400 and even under $300 for the launch : Microsoft are ready to lose more money than they did to help the Xbox survive its first years. Weakening Nintendo and Sony was a walk in the park, this will take much more.



* Origami project : www.origamiproject.com
** Dualcor Technologies : www.dualcor.com

iPub by O2 - boozer friendly

InfoSpace designed this pub-like environment for i-mode ; a perfect wrap up for their popular games (Pub Pool, Pub Fruity, Pub Darts) and the ideal platform for evolutions (Pub Brawl), synergies with Telefonica (Pub Tapas ?), or even sales of music (Tom Waits' "The piano has been drinking" ?) and movies ("Barfly" ?). Even if O2 is no more listed, shareholders can order a Pub Fish & Dips, but smoking remains forbidden. The bartender charges a boring £3 per month. One could have expected a volume based billing system - by the pint.