Asians and their love of all things mobile

Being here in Asia, I'm continuously exposed to tidbits of the Asian mobile phone experience, and it is clearly more intense than that in Europe or America. The April edition of Telecom Asia had a great article about Asian mobile phone users, based on an Asia-Pacific wide survey of 16,000 consumers in 29 countries by TNS Global. So this is not just the wealthy parts of Asia like Japan, South Korea, Hong Kong etc; but also includes the poor parts like India, Indonesia, Vietnam etc.

And your stats-rat was of course immediately all over these numbers. Here is the big picture. There were about 1.4 billion people here in the 29 countries in the Asia-Pacific region, who have a mobile phone subscription. Or to put it in another way, 42% of all mobile phone accounts are here in Asia-Pacific. And now lets see what kind of findings we have from the TNS Global survey.

SMS text messaging is the most popular service on mobile phones in Asia-Pacific, no surprise here. It is used by 88% of all phone owners here, or that is about 1.23 Billion people. More people in Asia-Pacific send text messages, than the total number of email (or IM Instant Messaging) on the internet worldwide.. Puts it in context?

Games. This is a big number. 71% of Asia-Pacific mobile phone owners play games on their phones. These are obviously not all downloadable games, it includes the preloaded games, such as Snake on Nokia phones, etc. But still, 71% means 994 million people! Almost a billion people entertain themselves with games on their phones, in Asia-Pacific (alone). That is a massive number.

And then the cameraphone feature. The digital camera on a phone is used by 61% of the mobile phone owners here. The number might seem modest, but consider the enormous populations here who are that poor that they cannot afford a new phone, or if a new phone, only the most simple one, without a camera. The total installed base of cameraphones - from the same survey so this data is consistent - is 62% of the mobile phone customers here. So of those mobile phone owners in Asia-Pacific who have a cameraphone - 868 million people (62%), 854 million (ie 61% of all phone owners) use the camera. Among those people who own a cameraphone, 98% use the camera feature..   Still, 854 million people here in Asia-Pacific snap pictures on their cameraphones.

Moving on down, then what do they do with those pictures. Most will save most pictures only onto the phone. But the TNS Global survey found that 48% of all mobile subscribers - or 672 million people - use MMS, the picture messaging service. Out of owners of cameraphones, that is a very respectable 77%. And out of users of the simple SMS text message, it means that 55% of users of mobile messaging in Asia-Pacific have already "upgraded" part of their messaging traffic to MMS picture messaging. A good number. I do need to point out that TNS Global did not talk about the frequency of MMS use, so this is going to be very tiny numbers in terms of traffic and revenues, compared with SMS text messaging traffic. But still, for those who were frustrated by the lack of immediate take-off by MMS, in Asia-Pacific the user numbers keep growing, and today 48% of all mobile phone owners send picture messages at least sometimes. Not bad.

Then lets look at music. Again an interesting number. 43% of all Asia-Pacific mobile subscribers use the music player function on their phones. This is a gigantic number for the music industry - 602 million people! Consider that there are about 150 million iPods, to put that into context. Also please note that most of these users will be "side-loading" music, ie they will not be downloading paid content from mobile music services. But still, this is a dramatic cannibalization of the global music player industry (as we predicted here at Communities Dominate blog way back when..).

Internet users? The percentage is not that impressive, at 34%, but the scale of Asia-Pacific does make that a big total number: 476 million people. Again remember that there are 1.3 billion internet users in total (which includes mobile users) and about 950 million personal computers in the world. And in just the Asia-Pacific region, 476 million people access the internet by mobile phone. And for those who like to argue the definitions of what is and what is not the internet on mobile, this number includes WAP usage and similar services like iMode in Japan etc.

Then they asked about TV and video consumers. 20% of customers here consume those services, which is 280 million people (still almost the size of the population of the USA).

And as a final comment, for all those who pray at the altar of "LBS" location-based services, a word of warning. Only 3% of customers in Asia-Pacific use location based services which is 42 milllion people. Bear in mind, that LBS services were launched around the same time as music, gaming and the mobile internet here in Asia; and even more alarmingly, LBS services were launched several years before cameraphones and MMS picture messaging. Yet LBS has found a total traction of 3 percent in this time, when other services get 30%, 40%, 50% even 70% usage levels. I am serious that I truly do not believe in LBS as a mass market proposition. Don't bet your company, product, brand or career on LBS, ha-ha..

Ok, that was the quick summary of the TNS Global survey covering 29 countries here in Asia-Pacific. I expect these kinds of numbers in Europe very soon, this year, next year or so. And North America will see all of these trends then after another year or two behind Europe.

Comments

[Giff Gfroerer, i2SMS]

Tomi,

Can you expand on your LBS comment a little? 3% is a low number. What can we expect in North America and Europe in the future in LBS? What services outside of navigation will work? We have long believed LBS will be a niche market, so what is it that is working in Asia?

Thanks

[Tomi T Ahonen]

Hi Giff

The big opportunities in LBS, according to all I've found since my first book had a chapter on it - tend to be enterprise/corporate solutions. The LBS based parcel tracking, driver or vehicle tracking, etc. type of services. There is some marginal take-up of friends-finders, but not much. The LBS based personalized weather is a total waste of effort (how many minutes will this rain continue raining right over me - launched years ago in many markets and no mass success), as are various "I'm lost as a tourist and I need to find a cash machine" type of services.

Even in Tokyo, one of the world's most miserable cities to navigate - even taxi drivers are perennially lost, because the street numbering is NOT in numerical order. The house in front of you might be number 7, the next house down the same street, be number 44, the next house after that number 15, the next house still on the same street and same block, be number 61. The house numbers on streets in Tokyo are never in numerical order!

That would be the ultimate opportunity for any location-based guidance service, where is the nearest Pizza Hut, where is the nearest locksmith, where is the nearest post office etc. The service was launched in Japan by KDDI in either 2000 or 2001, and still today has miniscule subscribers and no significant killer apps. In Japan where more internet users access on mobile than PC and where all phones sold today are 3G phones - and LBS was launched at the start of this decade, still today, not a mass market. When I heard this from KDDI a few years ago, I totally gave up on the LBS dream, ha-ha..

So yes, what might work? Some LBS games may succeed, like BotFighter from Sweden or Mogi in Japan. These tend to be short-lived. There can be some campaigns or short duration services with some gimmick around it.

The "grand idea" that Disney MVNO had in the USA, to use the children's phones as trackers so the parents could snoop on their kids, was pretty much what killed Disney's venture. Kids hated it, but not just the "toxic" Disney phones, they hated all kids who carried them - because Billy's mom might tell MY mom where I was... So kids with Disney phones soon were excluded from all activities, so they started to lose or forget or break their phones.

So yes, the child-tracker, what sounds such a safe and good idea for parents, is of course what kids hate, so it won't fly. Not with teenagers at least (maybe with under 10 year olds..)

I have catalogued well over 100 LBS services over the years, nothing truly amazing among them, perhaps my fave is the "pay-as-you-drive" insurance service in Britain, which is LBS for your car, the way you move your car will determine how much your insurance is. The guy who is the driver for the kids going club-hopping on weekends downtown, will pay far higher insurance than the driver of the same age, who only drives the car on weekends on country roads with no congestion.. Makes sense. But again, not a mass (telecoms) market opportunity, more a niche opportunity.

Thanks for writing

Tomi :-)

[Lars]

Thank god we've managed to block all LBS initiatives in my company. Too many mobile operators are wasting important resources on LBS.

Tomi is right, this is for enterprises and GPS and GPRS/EDGE takes care of these needs much better.

With GPS becoming standard on many mobile phones we might see a development in the mass market in the future on GPS and 3G(who knows what will happen). Let it happen that way. As always, the users will show the way.

[Rainer]

Tomi, fully agree with your view of LBS. There's no true mass market. But still - I'm one of those people who pray at the LBS altar ;-)

Yes, they're a niche market. But right now, there's a technological move away from closed operator-centric LBS infrastructure, towards open Web-based systems and client side positioning (GPS and 'hand-mapped' cell IDs like in the mobile Google Maps client). What we're seeing now, is a new situation. That didn't exist in the times before camera phones and MMS.

LBS are now entering the game of long tail economics. I think there is a future for LBS. Though not necessarily the way the operators have expected.

[alex]

I see one fundamental end-user need: to communicate my location to someone else. It's not solved well today. You often have to give lengthy explanations where you are and how to get there. You might know where you are but not well how to tell somebody else how to get to you.
Even more difficult in places like Tokyo without addresses in Western sense.

That's why I haven't given up hope that one day some LBS will win by solving this end-user need. It is not easy, for sure.

Does anybody know examples for LBS that tried to primarily solve this problem (and not as one of a bazillion other problems)?

Alex

[Tomi T Ahonen]

Hi Lars, Rainer and Alex

Thanks for the comments

Lars - good point. I do think this is over-investment by several orders of magnitude, and most dabbling in the LBS space will get burned, but the market will sort things out.

There was a time they said the next generation of mobile telecoms was satellite phones - and two rival satellite communciation systems wasted billions shooting rockets to space for satellites to give us even more mobile communications than terrestrial cellular telecoms. Not every good technical idea has commercial merit, ha-ha..

Rainer - good point about the long tail in LBS. That is most certainly valid. I am 100% certain LBS will not "ever" become a mass market commercial service, and by ever, I mean during the next decade ie as far as we can possibly see in this technological climate. But the more creativity we can find into this space, the more long tail type of niche opportunities will emerge. Then when we have our GPS receiver in our handsets, our maps pre-loaded on our phones, then yes, we will occasionally find a good LBS need.

Hunting dogs. A Finnish company launched the hunting dog tracker for mobile phones - including the GSM dog collar, that included a microphone, so the phone owner could also listen to the dog, is it barking, etc. And track the hunting dog as a moving dot in real time on the map on the phone. Yes, this kind of niche app, why not. But we had a hunting dog when I was a kid. My parents both were big hunters. Yet my mother insisted the dog not be trained for hunting. So even as we were very close to the target audience, we would not have used the service ha-ha... Long tail yes, mass market no.

Alex - good point. And those services exist, in many markets already. You can register yourself and your friends have to register, then you can track each other. We have had that in Finland for many years, they have it in many countries. The early services were based on EOTD (Enhanced Observed Time Difference) so its a triangulation technique for cellular telecoms, gives about a 100 meter (300 feet) accuracy. Today with GPS we get the accuracy to almost perfect.

Incidentially, everybody, I've been asked to post a main blog entry about my doubts about LBS which I will do as part of the current iPhone 3G hysteria, in particular as it does have the GPS receiver..

I'll do that shortly

Thanks for writing

Tomi :-)