Posted on
by

A visitor lef a comment on my post “Linux Mobile Phone“. I try to answer this question here.

ohhh, You get a very thorough and impressive analysis here, as well as many insightful opinions.

I agree almost of your saying and share the same concern on mobile ecosystem progress in the approaching rich media era. With your great passion in this arena, you could be a great active PM to influce in this revolution.

But I wonder how does the factor plays between Technology Push and Market Pull here. Will be the customised phone more easily to use by the ordinary consumer?

Hi, Lu. I appreciate that you like my post, and you asked a very good question. I wrote that entry for hackers who want to build a mobile phone for themselves, and gave my view on linux-based mobile phone standards. It might be too geeky. However, I can answer your question in my humble opinion.

Of course a tailor-made handsets are more easily to use by the ordinary consumer, and they are welcome on the market, too. The mobile network operators are doing customized phone for years. The handset is already set when it’s sold to the end users from operators, and the end users don’t need to worry about their new devices for GPRS or SMSC settings. It’s not just changing the default logos or ringtones.

Furthermore, a nicely customized devices will bring more pleasure to users. Not only the rich user interface or applications, but a conveniently user experience. That will attract more users to the mobile network operators. The Japanese carriers are doing so, and doing great. They has continuously improved the user experience, making its services accessible and attractive to the mass market.

This approach is also helping handset manufacturers selling more devices. I’m not saying all users need a smart phone or cutting-edge products, but market differentiation by customized devices. There are many users who want a phone fit their lifestyle,some people who want a mobile phone which can do anything and the others may just need a basic phone.

Technology Push and Market Pull of forces are not conflict. The market needs an open platform for handset manufacturers to build more product for different market segmentation, and an open platform will generate ecosystems which will make the market stronger. There are a lot of platforms on the market, but most of them are very limit. Handset manufacturers can not provide new products by these platforms time to market, and the users can not have more application on these platform either.

There is an example. Motorola announced they was stopped to doing high-end devices, and focus on so-called “right balance between low-end phones and high-end 3G models” at Q1 this year. You can see what happened at the last 2 quarter. Last week, Motorola announced the disappointing Q3 sales, their net profit was down 45% at Q3 from the year-ago quarter. Then blamed on lower sales of iDEN handsets caused by customer inventory adjustments and slower GSM infrastructure sales in Europe. However, motorola do have about 39% increase in unit shipments, and they have 21.1% market share according to IDC’s report. But Nokia has 34.7% market share.

Actually, you can see that Motorola are taking different strategy with Nokia. Most of Motorola’s devices are powered by closed linux-based platform. Nokia are using Symbian as an open platform for high-end devices. In other hand, they are also selling easy-to-use, cheap models powered by Nokia OS for emerging market. In many countries, Nokia takes even more than 50% market share. Why ? Because the modules are not just cheap and easy-to-use, they have different features fits people’s life style

I must say, Motorola’s product line leaks differentiation. Some of Motorola’s product is really cheap, but these product will hit their profit. If they could not deliver new product faster and build a ecosystem for developers, they will lost their market share again. When people start to finger out that Razor is just a expensive slimming device without flexibility, they will stop buy in. Another market pull force is mobile network operator who are driving ARPU by providing more services for their customers. They will need to make application easy to access, a great UI and customer layer could deliver a higher ARPU. A mobile phone without network setting will kill a user who want to send a MMS, not only operators make no money. 😉

Customization is the way to meet these requirements.

  • Lu

    Rex,

    Thanks for sharing further detail views. I certainly agree and can see the benefit on the tailor-made handsets,especially with the ultimate rich generation in mobile application and all.

    So why I still pop out the Q? Well, who will execute the proces of customization?! If it’s from the carrier or the manufacturer end, then it is great. If not, then it’s a big headache for the ordinary end-user to figure out the steps to customized thier phones. (I had an assignment where I require to test various GPRS phones and found the user experience wasn’t great on some phones.)

    Ecosystem is the term refer as a system formed by the interaction of a community of organisms with their environment. Each vendor has their own agenda and their power play strategies. I think Taiwan telecom vendor can try to play the integrator role to create more value in the industry chain,as if their horizon can beyond a cost-effective device maker.

    A good article here just perfectly reflect our views. http://www.digitimes.com.tw/n/article.asp?id=1E73F8BF3154AB83482572180042EEB8

    Actually, Ericsson has also work hard on creating a better telco ecosystem by developing their network system to communicate the device terminal. So the carrier can help some the handset setting/management for their subscribers as the service.