Ugly but useful - the birth of the US$85 mobile phone

Targeting the seniors in the markets LG of Korea has launched a handphone that is most suitable for the elderly generation that is not yet used to mobile phones yet, or has problems with the small buttons or the tiny sizes, more fashionable models normally provide.

A venture company called "Interpulse" launched this new phone model for LG Telecom that is being sold for 1,000 Korean Won. The model only supports calling and SMS service, and it weighs 63g and is 15mm wide.

While it is pretty ugly, it surely is a useful thing to talk about. And we bet that better designs will be made available soon.

(By Asia Business Consulting)

China's handset makers to expand overseas

Chinese low-cost handset makers look overseas to rejuvenate their business and intending to follow the likes of Haier or the Lenova Group, formerly known as Legend Group.

Their challenges are tremendous:

- A saturating handset market at home where the average income of the next subscriber group has fallen to a monthly US$72.50, down from US$242 currently - okay, you talk about 100 million subscribers, but the shortfall is huge

- Satisfaction ratings with their products is low. A recent survey credited nearly three-quarters of complaints about handsets in China to domestic companies, which hold less than half the market, and mostly in low-end, simple phones

- They probably don't have the network that is needed to distribute their products overseas

- Intense competitive pressure forces down margins

- The domestic market growth slows down dramatically, while the replacement of handsets becomes a dominant feature. A report by Deutsche Bank estimated that replacement handsets in China accounted for 37 percent of demand in 2002 and 51 percent in 2003. By next year, the figure will be 66 percent.

Exports are taking off already, after the providers have captured ground domestically: Now, though, Chinese suppliers have gained some serious market share domestically, at around 40 percent by units or roughly 30 percent by revenue, according to Deutsche Bank. More recently, they have also increased exports. Bird, for one, sent out 600,000 mobile phones to foreign markets in the first quarter, followed by TCL's 280,000.

Will the growth continue? Sure it will and the article provides some god reasons:
"David Hind, general manager of Qualcomm China and a veteran of China's local industry, says yes. He believes China will, within five years, place a company among the top-five handset makers. To doubters, Hind points out that few thought Samsung would ever be a top brand supplier — before, that is, the South Korean company became one.

"With the cost of manufacturing as low as it is today in China, using the value chain, what will the percentage of Chinese-made handsets grow to by 2005 or 2006?" Hind said. "I tell you it will be a staggering number — easily more than 50 percent, maybe 75 percent — just because of the margin that carriers are driving in terminal manufacturing." That contrasts with estimates from market watcher iSuppli Corp., which believes China will account for 34 percent of global production by 2008, or some 231 million phones. Last year, China made 30 percent of the world's phones.

As carriers take a more proactive role in determining specifications, as a European group recently did, Hind believes the move to China will accelerate, since doing so can save a buck on every handset. "If I'm going to buy 50 million handsets, that's $50 million to my bottom line. And at the end of the day, that's what it comes down to," said Hind. "These people have already paid billions for 3G licenses, so they have got to get financial help and the only way they are going to get it is to take advantage of the value chain."

So expect more actions - we are crious about reactions from Nokia and how Samsung and Sony Ericsson will react.

On the right track – Malaysia wants to brand itself

Malaysia has a lot of competition, just like any other country. But since a couple of months it clearly is on the way to distinguish itself from the crowd and in a very positive sense.

Its new efforts started off with the election of Prime Minister Datuk Seri Abdullah Ahmad Badawi and his drive to clean up governmental organisation. At that time, we wrote about the new transparency and the potential to use this as a competitive weapon.

Recently, the country followed with his directive to develop Key Performance Indicators (KPI) for governmental-linked organisations (GLO). Now, his deputy Datuk Seri Najib Razak said during a key note address at the Harvard Business School Alumni Club of Malaysia that "to make the country more attractive in an increasingly globalised arena, there was a need to brand Malaysia according to the country's competence. He said that Malaysia's distinguished feature is its diversity and the preservation of all its many cultures (New Straits Times, July 28, 2004).

This is interesting since it brands culture instead of lines of business (think of Thailand and the tourism industry) or features (think of Singapore and the image of a squeaky clean and crime free city). It allows Malaysia to evolve if managed well, along to this lines.

Qantas tests check-in via SMS

Enough is never enough and what is in today is out tomorrow. A competitor is always close and the time between an innovation or an innovative approach to the market and a competitor either copying the innovation or developing something different is shorter today than ever.

In May, we reported that Jet Star in Australia would accept bookings via SMS (see our blog entry on May 01, 2004.

Now Qantas Airways is countering. They have begun to run trials to allow passengers to check-in via SMS for the route Sydney to Melbourne.

"To use the service, customers need to pre-register their phone and associate it with a specific frequent flyer number. Check-in is accomplished by sending a text message up to six hours before a booked flight. A virtual "boarding pass" that includes flight and seat allocation details is then sent to the phone, which must be shown to staff when boarding.

Passengers who are flying without baggage will be able to use the system without showing identification, while the luggage-laden masses will be able to deposit their bags at a counter dedicated to text-message check-ins after presenting suitable ID."

The system relies on bar codes - as such, only the most recent models work with the service. Now this is a service that is using suitable content in an alliance between the airline industry and mobile carriers.

Ruling on gambling via SMS in Malaysia

A Fatwa has been issued in Malaysia that states that contests based on short messaging service (SMS) which contain elements of gambling are forbidden to Muslims.  A Fatwa is defined as "legal opinion issued by a qualified Muslim scholar (alim, pl. ulama) on matters of religious belief and practice  (www.omarfoundation.org/Culture/Educators/Glossary.htm)".

The reason for this is that those contents were based on luck and could be exploitive in nature.  National Fatwa Council chairman Datuk Dr Ismail Ibrahim was quoted as saying that such contests are "... likened to gambling because the ultimate results of such games depend on the participant’s luck. They also exploit participants by urging them to spend money on these games. At the end of the day, participants who actually profit from these games are few while those who spend large sums of money don’t win  anything."  Telephone companies are urged to ban such contests.

Nothing to say against this but again, this is a case where something is banned just because of technology enables new distribution. 

However, wouldn't it be better to educate the population about gambling? About financial planning?  Or regulate the business and weed out illegal companies running those contests via police enforcement? Isn't it more likely that those who want to gamble go underground and are out of control and alone?  That you can still gamble, anyway, via the Internet - so this would be next step to do?  Where would it stop?  So basically, what we want to say is that this is an over-reaction, once again, as can be found across the world in the face of a fast changing environment based on innovative technology - camera phones are one of those issues, porn distribution via mobile phones in the UK another one - and there are plenty more.

 
Menji's Comments:
Menji wrote that our comment about that “As far as we Muslims are concerned, there is no "overreaction". As a matter of fact, I find your comment above to be offending my religious sensibilites. If an activity is considered to be haraam (forbidden), then it is haraam, full stop. It is then up to the responsibility of the Govt. to stop them (although why the Govt. would allow such activities in the first place is another story).”

Update: Asia Business Consulting apologises if we offended anybody’s feelings – however, what we were stating is only that it is a common reaction of governments across the world to ban or strictly regulate developments that are brought about by technology – camera phones in certain countries, music piracy and downloads from the internet and others.  SMS opened up a new distribution channel for organizers of any event.  No longer are they required to go through newspapers or television and advertise their events.  No longer do they need to only promote their contests or events via flyers or mailers. Sure, they still use those channels but to promote via SMS or the internet is way cheaper and can reach a wider audience. 
Those new channels are exploited by the private sector – with good and with bad intentions.  If the intentions of the private sector are basically good, nobody needs to act against it. 

However, if the intentions are bad, a ban cannot be executed easily.  It is education that is needed to enforce the ban.  If Muslim cannot participate in SMS contexts, how would anybody be able to control if they comply or not – it could only be revealed if a Muslim wins in the contest.  As such, only awareness and education is able to create a self-regulating trigger in any individual not to participate. 

Basically: If something is forbidden, but I don’t exactly know why, I might or might not comply.   If I am aware that it is haram or forbidden, I won’t do it and I am aware of the harm it causes. 
If I am not aware of it or not educate thereabout, I might still try my luck, and participate.  If there are no legal channels, there channels that are underground – and much more devastating and dangerous.

U2's new album Vertigo stolen in France - on its way onto the web?

BBC reports  that the music group U2 might launch their new album early, since it is highly likely that a copy of the unreleased version "Vertigo" was pilfered from a photo shoot in France last week and chances are good it's on the fast track to the Web - Gnutella is a hot tip amongst bloggers.

Well, if you can't beat them, now the band is considering an early online release. It might be that U2 will rush the record on Apple's iTune's store if the songs show up on peer-to-peer networks. French police have launched a major search for the missing disc, and about 20 people are interrogated. 

However, police is also careful with their statements, since the circumstance of the "theft" are not clear -  "We have to be careful. Was it lost or was it stolen? An inquiry is under way. We have numerous theories - from the fan who wants the rough cut for his collection to the web specialist who wants to be the first to put it out."

Well, it might end up on the web - or, it surely will. In any case, this is great advertisement for the band and a free promotion.  

TV producers get ready for action - Korea is coming

Television is thought to be an easy business to start developing a global presence.  Howevder, the ongoing convergence of the Internet with communications with entertainment made the life for producers more difficult.

Korea is now looking at the next power application in digital TV and as it is done the way the country is normally doing i, everything is planned out thoroughly.

In short, it intends to "digital TV will become the nation’s sixth global top 10 export item along with semiconductor goods, cars, cell phones, personal computers and ships." 

In fact, made-in-Korea digital TVs in the global market up to 40 percent by 2007 from the current 24 percent in 2003.

To quote some more:  The promising future digital TV market is globally expected to reach $50 billion by 2007. Our goal is to tap the market as one of the next generation growth engines. By then, we will expand product exports up to $15 billion, or 40 percent of the global market share.

As such, life just got a bit different for the likes of TCL International Holdings, a power, that just grew big last year, or Dell, that entered the TV business.  Who else is there?  Motorola wanted to get in again, Sony and many more.  So well, it is an exciting business, apparently.

Korea's mobile market saturating

Several newspapers reported yesterday that Korea's mobile market is quickly heading towards saturation. 

The Korea Information Society Development Institute, an affiliate of the Ministry of Information and Communication states that by the end of 2004, the number of the country's cell phone users may rise to 37.54 million from 33.59 million a year ago.  The number of mobile phone users in Korea will probably reach 39.43 million, or 81% of the population, by 2008.

Does this make sense?  This would mean that this year, the growth rate reaches 12%, while the growth rate until 2008 would be around 1.2% - there is no argument in the article justifying  this extremely rapid decline from double to low single digits.  In addition, there are enough countries, where the penetration rate reaches more than 100%, since some users have more than one mobile phone.

Nevertheless - this change, however pronounced, puts lots of strains on the companies. They need to put in content into the mobile phones so that users keep ringing up.  This means that they need to develop capabilities in alliance managements - forming alliances with companies that develop those contents.  In addition, the mindset in the companies need to change - you have a different approach to a business that is growing fast compared to a business that is growing slow - so transition management is required as well - and there are plenty more challenges.  Again, we are interested to see, how the powerhouses in Korea are going about this transformations. 

Spam - small businesses giving up?

An Australian government study showed that close to 30% of small and medium sized companies in the country don't bother installing anti-spam software and rather fight the spam "manually".

Other data of the study showed that more 50% of the SMEs would receive more than 5 spam messages a day - but that 36% of businesses believed staff spent more than 30 minutes a day dealing with spam. Spam cost 25 per cent of businesses more than $5,000 (it is not clear if this relates to Australian Dollars or US$) a year.

However, we believe that the amount of spam must either be much larger or that the receivers actually open the mail and read it, before deciding to delete the mail.  Why d we believe this?

Well, the study says that a minimum of 5 mails are received and that the executives deal more than 30 minutes a day dealing with it.  Does this make sense? Okay, spam decreases productivity, and our inbox receives more than 5 mails a day - we wish, it would be just 5 mails a day.

We don't want to underestimate the amount of spam that is being received, but show that the study either didn't include reasonable ranges in their questions or that it just doesn't make too much sense.

Virus Alert: Story about Osama bin Laden

Wired Magazine reports the appearance of a new virus.  The virus was attached to a message that was posted on over 30,000 Usenet newsgroups and is not being spread via e-mail, said Web security vendor Sophos. 

Apparently, readers are enticed to open the attachment as it pomises to contain pictures of Osama bin Laden being dead.

New development regarding I-Mode in Japan

I-Mode by NTT DoCoMo put Japan on the global map for telecommunications with its I-Mode service.  For a while - actually a long time - it was the fastest growing data service on the globe. 

The envy of other communications companies who studied the company that made data instead of voice fashionable, as they managed what other companies still struggle with:  To "entice" their customers to use their mobile phones to access data, share pictures, download ringtones and all of it with "simple" 2G technology.

Now DoCoMo is intending to transfer its massive subscriber base to its new, upgraded service FOMA, as the new service to prevent competitors to continue stealing market share from DoCoMo and its I-Mode.  May be this will be a new example on how to entice subscribers to move - something that European carrier struggle with as well.  If DoCoMo succeeds, assume that they will continue to be the darling of the international communications business.

The background story of the IPod

We believe the IPod is one of the coolest products around.  And as one of the fastest growing business segments of Apple Computers, it also enticed the recording industry to embrace online music stores.

However, let the story be heard.  Like in everything else, the birth of the IPod was not an easy one - and it was plastered with near failures, and a near death - can imagine a world without IPods?

Wired News has a great story - a bit lengthy for some with short attention spans, but really worthwhile the patience to read it.

Japan's government wants to tax wireless Lan

We always have the feeling that there is someone in every government just paid to look for opportunities to impose new taxes on something where taxes are possible.  We recently reported about initiatives in the government of the Philippines to impose taxes on SMS.
The Ministry Public Management in  Japan is now planning a bill that would charge consumers a radio signal fee (they always have great names for something painful) for operating devices that use wireless Lan

First Pocket PC Virus reported

Security firm BitDefender discovered the first virus for Pocket PCs.  The virus only spreads via Bluetooth.  It has not been released to the public, but was send to BitDefender in a "show of force" to indicate, that Pocket PCs are not immune to virus threats.

"The virus spreads to Pocket PC devices using Bluetooth – a method of wirelessly transferring files.  Once the virus is downloaded to a handheld computer it displays a message box that reads, "Dear User, am I allowed to spread?" The virus spreads only if the user selects "Yes" .

While the virus is harmless, it shows that the reach of those creating them has expanded way beyond computers.  Does this mean that sooner or later Pocket PCs and mobile phones - infected with a worm just last month - need to have the same protection? It is possible.

Internet inspires murder

It is just one of those stories, where the media confuses the reason with effect.  In Australia, some boys are charged of burning a homeless man to death and the murder is blamed on a video that one of the suspects downloaded from the Internet.

In fact, there is only one sentence referring to the Internet in the end of the article - does the journalist realise that it is pure rubbish what he is implying?  

There are plenty of movies available anywhere that highlight violence - and one can say that this is the driving line in the history of television and movies.  There were cowboy movies and space rangers earlier - does this mean that we buy a horse or build a spaceship to get the feeling of it?  Surely not - if this would happen, if there is a clear correlation, we would show more movies highlighting peace and love on TV and in the movies.  The question is - would anybody watch?  In the same vein - would anybody read a story without an enticing headline?  Just put porn into the header and ratings go up.  Put Sharukhan on the frontpage of a magazine, and circulation goes up.  As simple as this.
 
But the answer is that some people are more enticed by some events than others - but this is the context in which they act which is based on a  lot more than just watching a movie, reading a story, listening to music and so one.  It doesn't mean that everyone is acting in a similar manner - what drives us does not drive you. So don't blame the media, blame the context.

War against online porn in China

There is now a webpage in China, where people can report webpages with online pornography, online gambling and similar.  Apparently, a great success so far since around 22,000 visitors reported some "wrongdoing" already.

The government now launches another attack - It gives websites time until September to rid themselves of indecent content. And the article states that so far, 500 websites have been identified.

That leaves a couple of questions:

What is the definition of pornography - apparently, even "influential webpages" have been identified to contain some indecent content.  So it would be possible to approach those directly, of course.  If it is, on the other hand, a webpage that houses hardcore pornography, they could just move to another overseas host and relaunch from there. 

More interesting is of course that they identified just 500 websites - 500 only?  It might show "the decency of visitors", since anybody who types in "sex" in Google would get millions and millions of hits.  It might also show that those who complain, really, really mean the context in more reputable sites - and since China opened up a bit recently in terms of clothing and others, well, it could also be that they complain about fashionable clothes only - where a girl wears a short trouser, or a miniskirt.  Some might consider this already indecent contents already - now that would be sad.

Internet banking at ANZ Banking Group

As much as we are living in a new world, where it is important for companies to make their product or service attractive to existing and potential customers, many corporations still think about "locking them in". Already the word sequence sounds strange - to lock in your customers - close the door, lock it and throw away the keys.

Banks and their associated online banking was one of those institutions and their services that had a clear grip on customers.  Even if you are unhappy with your bank - and who isn't - who would like to take the hassle and change banks every time something goes wrong - discontinue accounts, change ATM machines etc.  Even with online or internet banking, where it is relatively easy to just switch and change to a local provider or even overseas (have you ever thought that your local bank is no longer competing with the bank next door only, but with European or American banks), it still is a hassle.   

ANZ bank in Australia says that this is also one of the main reasons why customers don't want to change - and intends to change the system. "It wants to do this allowing customers to simply enter all their relevant details once and the bank would then automatically generate the written advice to third parties telling them to switch accounts to ANZ". 

We hope this means that customers can fill out the details and that ANZ is than approaching their current institutions - the article is not quite clear about it. But if it is this way, than we have to say that this is a big step into the right direction.

Gambling via mobile phones takes on serious note in the Philippines

Frequently, mobile phones are now in the news when there are peeping toms that use the camera in inappropriate places, to express it mildly.

But every now and then, the Philippines pops up with a different issue - recently it was the idea of some governmental officer to impose taxes on SMS. Now, the Department of Justice seeks to ban mobile phones from school premises since apparently, students use mobile phones for gambling purposes - students, for example, bet on final scores in sports competitons, especially basketball. One student committed suicide after losing.

Okay, this is a serious issue, but isn't this more an issue of education and repositioning the problem? As the responsible secretary Merceditas Gutierrez admitted that this is a problem of the parents once students leave the school premises. So blame the technology, and not the real issues, such as education, lack of awareness creation etc?

Global executives exposing themselves to online threats

You can call it what you want.... A new study found that 78% of executives open attachments in e-mails even so they don't know the sender of the mail. This is happening after year on and on education not to do so. The worse thing is that those executives actually place worms and virusses at the top of their security concerns list (92%), followed by a far margin that says hackers would be a security concern (50%) and 40% claiming accidental damage as a risk to security.

So does this mean you are worried that you do something that you should know about, have heard about already, and that you still do it despite all of this? Simply curiosity or simply strange. Definetely a good business for companies such as Network Associates and Symantec. It is no wonder than that firms' budget for Information Security is rising, from 9% in 2002, to 11% in 2003. Spending was expected to hit 13% in 2004 - security to protect the companies from someone who is causing the damage.

The study by the Economist Intelligence Unit carried out for AT&T surveyed 254 senior executives around the world in industries ranging from automotive to tourism.

3G in Korea

We have to say it again and again - Asia rocks when 3G is concerned. However even here, you find huge differences. Many countries are still not sure how to treat 3G licenses - look at the Philippines or China. Others discuss the implementation of the service and potential costs - we are thinking of Singapore or Malaysia. Another group thought that NTT DoCoMo and Japan would lead the way. But let's go back to one of our favourite countries in terms of technology application and breakthrough developments. 3G is all over the place in Korea - of the 34 million that have a mobile phone, 30 million subscribe to one of the different versions. This compares to a 24% penetration of 3G services amongst the around 82 million subscribers in Japan.

Hutchinson and Telstra to work together

Hutchinson Whampoa confirmed that it was in talks with Australian telecommunications providers, amongst them Telstra, about sharing the high-speed mobile phone network - their third generation network (3G).

The advantages are clear for both - cost sharing. Hutchinson is suffering financially in countries where it already rolls out 3G services, such as the UK. And to build a 3G network from scratch is an expensive exercise. Telstra also assumes that it will save in the tie-up.

What is problematic is that the two companies fall out over disagreements in April this year over proposed network sharing - while differences are something common, and very often beneficial, to start an expensive venture in disagreement might not be the most fortunate beginning.

In addition, Telstra has a lot ongoing currently - it is "expected to complete the deployment of CDMA EV-DO network soon, which targets corporate mobile data users. It is trialling wireless technology from US vendor Flarion intended for very high speed data services in CBDs and wants to have its consumer mobile service i-Mode in place before Christmas.

A big program, using a lot of resources. Actually, each of those would already require laser-pinned focus, shaping the corporate culture and requiring great things from top-class employees.

RFID Tags for children

In Japan, school authorities in Osaka have decided to go ahead and install RFID tags in school gates, and other key locations to trach children's movements. The chips will also be put into the children's schoolbags, name tags and clothing.

RFID tags or Radio Frequency Identification tags is a method to store and retrieve data remotely from products that have those tags.

RFID tags are becoming common feature in today's retails life, pushed forward by companies like Wal-Mart and similar. They have their positive features, as they allow a supply chain to be streamlined, make companies more efficient and reduce waste. Nevertheless, privacy concerns are abound, since purchasers of those products are not necessarily aware of them.

It is obvious that authorities want to increase control over the children to avoid cases of kidnapping or other happenings that are increasingly common in Japan. It is not clear, if parents have a saying in these circumstance, like, if they can reject the motion to have RFID tags in their children's baggage or clothing. The scarier part actually is that authorities take this step without apparent involvement of the parents, and hence, overruling any possible objection.

Novels in SMS style

This is unique, but shows that people are catching up to all kind of new innovations. In China a new kind of novel writing has emerged - each chapter contains 70 characters and send to you via SMS - the whole story, called "Outside the Fortress Besieged" totals about 4,000 words.

The potential for such kind of stories must be huge, considering the size of the Chinese mobile market, but only, if the story entices and the plot is well managed. Naturally, all of it must be succinct.

This actually follows a Japanese model where a novelist sends SMS chapters via mobile e-mail. The difference is that mobile phones can receive e-mails of up to 1,600 characters. By the way, there was once the story in Korea, where users would receive short and daily video clips as part of a story that would run for about one month.

India emerges as biotechnology center

Most of us would associate India with outsourcing or BPO, but quite quietly (or not so), the country and here, again Bangalore, is making its mark in the global biotechnology segment as well.

There are now 240 biotechnology firms in India, with 110 of them located in Karnataka and 97 in Bangalore (which is the capital of Karnataka). Bangalore already employs 9,000 people. It is said that the firms generated US$227 million for the year ended in March 2004.

ERnst & Young states that the sector will generate US$5 billion in revenues and create more than one million jobs over the next 5 years time. In addition, Karantaka's chief minister Dharam Singh says that they would set up a biotech park in 2006.

The article, does not analyse the impact of the recent change in government on the sector, however, it is clear that India tries to make its name in another area with strong future growth potential.

E&Y also said that India is one of the five emerging biotech centers in Asia Pacific but ranked third based on the number of biotech firms. This indicates that another cluster of development is emerging - and considering the importance of clusters to the development of industry sector and its complimenting benefits, that surely is good news for the country. It, however, makes it more difficult for countries that are late to the sector.

Microsoft dropped in Best Brand Survey

This is news from the US, however, since it affects Asian companies, we report about it. Harris Poll reported on a survey of 2,100 consumers and found out that Sony topped the list of best brands among consumers in the US for the fifth year in a row.

Toyota, another juggernaut from Japan made it to rank 5. It hadn't ranked in the top 10 since 2001. Honda, the third company from Japan, came in at number 7.

Microsoft, increasingly under fire for slacking security in its Internet browser, dropped out from the first 10 companies, falling from number 5 in 2003.

To build it or not to build it - a giant mobile phone home

There is a millionaire in Australia called John Ilhan, who runs the Crazy John mobile retail outlets. He has now ordered a 34-storey city apartment building in Melbourne that will be build in the shape of a mobile phone.

"Boasting all the cosmetic features of a mobile phone, the 166-apartment building's exterior could feature numbers, "end" and "send" buttons as well as a rooftop antenna."

So far, there is no decision made which brand will be feature, and what other "functions" the building will show - What about a clamshell mobile? Which unfolds when the lower storeys in the building have been sold? Or multimedia video depicting the life of the inhabitants - one at a time? Just thinking aloud.

Asian mobile phone makers get it

Regular readers of our blog know that we observe trends in the market place regarding mobile phones and that we pointed out many times that Korean mobile phone makers just get it. Their products are simple, easy to use, and still full of features that are demanded by many users.

Strategy Analytics in a new press release just confirmed this thinking once again. They conducted a study amongst 1,000 cellular phone users in the US detected a 50% decline of users that are very satisfied with their mobile services, compared to 2001 levels.

Their findings said that the introduction of higher quality and feature rich mobile phones has raised user's expectations of their mobile phones - basically, you want more, if you know that it can be done, if you see it elsewhere, or if you got used to it. Expectations rising.

However, they also found out that it is the Asian handset maker, such as Samsung, LG and Kyocera, that deliver - coming from nowhere - and that users are very unhappy with the Nokia's and the Motorola's. Their handsets basically became more cumbersome with time, and some features just don't work that nice and easy as they used to.

Is this the wakeup call? Or do we witness the decline of yet another icon?

Branding is key to success

Someone said it right. To compete against Chinese products is not possible on price alone. And to have low prices is no longterm strategy, as there is always someone who will be able to produce at a lower price than you.

Giant Manufacturing Co, a bicycle manufacturer in Taiwan realised this correctly and he said that the only way to survive as a company is through branding. Starting off 18 years as an OEM producer for several other brands, he realised that the creation of an own brand is important after several of his clients switch to another manufacturer. According to international brand consultancy firm Interbrand, Giant has a brand value of US$210 million and ranked as the sixth most valuable brand in the country last year, after Trend Micro, ASUS, Acer, Master Kong and MAXXIS.

How can you measure the success of branding? Well, one could relate to the story mentioned in the news - The Chairman King Liu visited one of his outlet in Shanghai and "a customer told me that Giant bicycles are the most commonly stolen bikes. Her son has lost seven Giant bikes, yet he still wants a Giant."

Now that is something!

Michael Moore/ Fahrenheit 911 hopes for regime change in Japan, Australia and...

Michael Moore is the maker of the controversial movie Fahrenheit 9/11 which highlights the relations between the Laden family and Bush, before September 11, 2001.

In a press conference to foreign journalist, Moore mentioned that he hopes that the impact of the movie would be so great that viewers would vote supporting governments of the war in Iraq out of their office.

Just for reader's interest.

Two stories: Xiaolingtong or - you don't need an expensive mobile phone service and Arrested in China for illegal VoIP service

If you think about mobile communication, you think about Samsung, Nokia, Motorola, Sony Ericsson and so on. You think about 2.5 G, 3G, may be you are aware of 4G. May be, you still remember the expressions GSM or AMPS - but basically you would think about upgrading, upgrading and one more time - upgrading.

Right? Well, not always - a company in China called Xiaolingtong offers cheap service - voice communications and SMS only (hear hear), spotty service, no roaming and very limited coverage - and its service is booming. There are 50 million users in China that use their service - a simple service based on cordless-phone technology - and the company is growing rapidly.

As the Wall Street Journal points out that "The phones, as small and sleek as regular cellphones, are powered by rooftop-mounted base stations, which are specially equipped antennas that send signals a little more than a mile. That's a lot farther than cordless phones that allow callers to roam as far as their backyards before losing reception. Yet call quality can be patchy because the network is lower-powered than traditional cellphone systems. And users sometimes have problems getting a signal when they move around within a city and their call moves to a new base station." (.

Why is it booming? Because it is way cheaper - about 50% - compared to other services and other mobiles. And China has still got a huge number of people, even in cities, that are very, very poor but need something to communication.

Interestingly, and showing China's ambiguous attitude to technology regulators allow the service to grow or even to exist - Chinese regulators have quietly allowed Xiaolingtong to flourish even though the operators of the service are fixed-line phone companies without official wireless licenses.

This compares positively to another story - where a man was arrested in China because he ran an illega wireless voice-over-internet (VoIP) service. He was arrested after police raided his premises and found a number of facilities, including an illegal Internet gateway. His business activities were discovered when he started to advertise and offer cheaper call services to foreign companies - not smart enough.

Apparently, he took US$360,000 in VOiP services, resulting in an alleged loss of around US$ 1 million to state-owned companies - and here is the sad part.

We can assume that since they are state-owned, they can intervene against the man. It might be interesting to note that 36% of China Mobile's customer, one of the leading mobile operators in China with partial ownership by the Chinese Ministry of Information industry, also own a Xiaolingtong mentioned above, which might explain that the government does not intervene in its operations.

Wi-Fi in the global context - that is where we are

Wi-Fi has come a long way - it was said to be dead, overtaken by new technologies, handicapped by technical problems and challenges, but slowly and surely, it makes its marks.

I remember my time when I worked in Indonesia, and had to present to clients - setting the computer up for a presentation, attaching the wires to the LCD, and than, the big search for the power plug began.

Crawling under tables and cupboards, I mostly commented that I am looking forward to the time, when cables are behind us. Well, it will still take some years, until everything is wireless, and security surely is an issue, still. But it will come, and it willb e in my lifetime, I swear.

What is interesting, so, that the article talks a lot about the US, a bit about Europe, and only mentions Japan in Asia - I thought the trendsetters are here?

No net-based campaigning in Japan

Japan is know as a globally leading country in the Internet space with 77 million Internet users, and companies, such as NTT DoCoMo, providing great and innovative services. However, this does not extend to the political segments of the country during election time.

Candidates have Websites, blogs or e-mail newsletters but candidates vying for House of Councilors seats in Sunday's election will not have the luxury of updating their positions or activities via the of the Internet as this would be defined as text message.

All that is considered text is suppose to be put out to the public latest at June 23 - Public Offices Election Law does not allow candidates to update their sites or send any electronic information during the June 24-July 11 campaign period - which is based on a law introduced in 1950.

Regular readers of our blog will remember that the usage of the Internet was very popular during the Korean elections and during the recent US campaign to determine the candidate for their election in November. Considering the advanced stage of Japan in the Internet segment, it is quite amazing that such a law is still existing. But then, it happens often that politicians need to be helped by emerging realities.

Number portability in Korea

More and more mobile communications companies are forced to allow number portability of their subscribers - not only in the West, but also here in Asia. Number portability basically means, that a subscriber can move to another mobile phone company and takes his or her number along. When this wasn't allowed, carriers had a lock on the subscriber. Who would want to move when there is the hassle to inform friends and business associates about a new number? Business could get lost easily. In addition, this was also more cost-intensive for the subscriber, since initial sign-up fees needed to be paid.

In effect, it frequently allowed companies to treat their customers badly - those who signed up earlier had to live with bad service, and expensive call plans while those who signed up later had at least the advantage of choosing a cheaper call plan.

Number portability destroys this lock on the subscribers - and companies don't like it, assuming, it increases churn, as can be seen in the discussion in Korea. There are complaints of carriers about illegal marketing tactics and practices - but this is not the important issue for companies.

When number portability is introduced, carriers need to deliver on services, and innovation. It is not enough to start a pricewar, because every other company can sooner or later match the lower price. So, once again, number portability is good for the consumer, and in the end, those companies which don't realise the importance of service delivery will fail, ultimately.

Sore loser in SMS contest in Malaysia

Telecommunication companies of course use SMS messages to organise contests, attract new subscribers and engage existing ones. Now something went wrong and became pretty expensive for one participant in Malaysia.

The woman spent around US$5,000 only resulted in her winning the second price - a motorcycle worth US$1,600. The contest rules said that the highest number of SMS send to the organising parties together with a complete slogan including personal details and an advertisement would be considered in the contest. The winners (grand prize and first price) spend far less - US$270 and US$1,100 respectively to win prices worth US$40,000.

She complaint to the Consumer Claims Tribunal and wanted her money back from the organiser.

While it is tough to meet the criteria with a text message length of only 150 letters, it is easy to blame others, and not yourself, for an expensive undertaking.

Update:

The following comment was posted:
"By the description you provide of the contest criteria - the lady's complaint is valid - she spent more money than the first prize winner, which would mean that she sent a higher volume of messages - the criteria you state includes the highest volume of messages, the slogan is secondary to the numerical criteria."

Our comment:

We are not exactly aware how the various criteria were evaluated in the final decision of the judges. However, it does actually not make sense to include the total number of SMS send into the decision since sooner or later, the costs for the SMS sent would outpace the value of the winner's price - what than happened. The article also stated that there was another contestant who actually sent more SMS, but who wasn't considered since his entries were incomplete (a problem of the limitations of SMS - 150 letters, remember?). Overall, we wanted to point out that there are people around that go over the limits to win -not considering cost and value while participating.

Thanks for the comment, anyway!

Beautiful new mobile phone in Korea

Slashphone reports about a beautiful new handphone available from July onwards in Korea only. It has a 2 megapixel resolution and - this is the beauty of it - this shows that camera phones will soon become serious competitors to digital cameras - something, we have already reported about earlier (see our entry on June 10, 2004 - camera phones encroaching digital camera territory - http://asiabusinessconsulting.blogspot.com/2004_06_01_asiabusinessconsulting_archive.html#108693647723394618).

Australia's broadband usage crosses one million mark

Okay, this is nothing compared to powerhouses like Korea or Singapore, for that matter, as these countries have a broadband penetration rate of over 70% - companies in Australia report that the country officially passed the one million mark for broadband connections. Market leader is Telstra, with 750,000 subscribers.

The growth exploded after Optus entered the market. It offered broadband over cable earlier, but entered the ASDL market only recently. Following its entry a price war broke out between Telstra and Optus, with the final beneficiary being the customer.

India: Mobile phones to overtake fixed lines

India is one of the latest countries where there are more mobile phone users than fixed line users. This is nothing new, but the interesting fact is that the penetration in India is still so very low, standing at a current 7%. This is nevertheless up from one percent ten years back.

There are a couple of things here that needs to be observed - first, it is much easier and cheaper to erect communication towers across a country, than to install fixed lines. This is supported by the vastness of the country and the extend of the rural area.

Next, it is easier for people in rural areas - and not only here - to use a mobile phone. Basically, farmers can easier communicate without leaving their fields than going to the next place, probably farer away, to use a fixed line, even if it is a payphone.

Globally, the trend is continuing - mobile phones displace fixed lines, at least to a certain extend. This is challenging news for those companies who only focus on fixed lines, however, there are not that many which do that.

National Australia Bank to fight phishing

We believe that nearly everyone with Internet access and an e-mail account has received one of those mails where the sender is asking you to verify your account details. When clicking on the link, one is transported to a webpage that looks pretty much like the bank the sender is pretending to come from - be it Citibank, Standard Chartered or National Australia Bank - this whole thing is aiming at getting someones account details -creditcard number, passwords and so on, in order to empty it.

The whole process is called phishing. The National Australia Bank is now introducing a concept could pretty quickly gain momentum to fight phishing - it is an easy process, since it involves a bit of a hassle for the consumer - but what is the hassle against an empty bank account anyway. National Australia Bank (NAB) introduced a two-factor authentication - its one million internet banking customers will be offered the option of registering their mobile phone number with the bank, which will SMS a unique PIN to the phone during each transaction. Customers will then enter the PIN on the website to confirm the transaction. The one-time PIN gives extra protection for customers whose user IDs and passwords are stolen.

Urban development in Taiwan - another ambitious plan

Just two days ago, we wrote about the development of Intelligent Cities in Malaysia, and the “Crystal Valley” planned in Korea (http://asiabusinessconsulting.blogspot.com/2004_06_01_asiabusinessconsulting_archive.html#108858466770136337).

Now it is Taiwan’s turn and it is their aim to take Taiwan from a number 20 ranking to the top 5 countries in the world for wireless online access. Parallel, it is planned to bring the charge service fees down by some 80 percent to be competitive with the top ten most inexpensive national rates in the world.

Officials from the Cabinet-level Science and Technology Advisory Group outlined their plans that before the end of this decade, individuals would be able to get online connections with broadband services for teleconference calls, watching videos, and listening to downloaded music through mobile phone devices both at home and in public places with the completion of the "M-Taiwan" (Mobile Taiwan) project.

The project sounds ambitious but exciting – it involves the set up the basic infrastructures to combine cellular phone network service, IT computer platforms, and broadband Internet links with a total 6,000 kilometers of the broadband fixed networks, and 10 "mobile cities" plus 15 "special mobile districts" around Taiwan by 2008.

If the plans keep coming this way and if countries start implementing and executing on their goals, the scope for competition becomes wider – Malaysia, Korea, Taiwan and, earlier, Singapore, follow Silicon Valley – who is following them. If the trend continues, this will quickly become the baseline of the future for competition amongst countries, as companies will come to expect this environment for investment.

China intends to monitor SMS

We are not 100 percent sure, if this is a hoax or if this is true, but considering China's ambiguity towards new technology, it might just be real.

According to news reports, the Ministry of Public Security has licensed a system that allows the filtering of SMS messages. Apparently, the systems is designed for SMS providers, esentially the carriers. With the system installed, providers would be able to block and record SMS messages deemed inappropriate.