Friday, 15 September 2006

Why can't we have a mobile network like the Japanese?

In this article, Brad Stone talks about his mobile experiences in Japan, where companies like Sharp produce mobile phones with features like high definition video and GPS capabilities, making full use of the services that are offered through the Japanese mobile networks (On a side note, he writes that it's frowned upon (as is stated by signs and public announcements) in Japan to talk on your mobile phone in bars or the subway. That's a great way to get away from some of those mobile disturbances). He also states that these phones are a bit useless in the US because of the lack of a high speed network and offered services. And it's the same in Europe, where most of the networks offer some UMTS/3G features, but are nowhere near the services that mobile carries in countries like Japan or South Korea offer. Why is that?

There are some answers to that question. Companies in the Pacific rim have always been very technology driven. Japan has been on the cutting edge of mobile technology for years with companies like Sony and Sharp. More recently companies in countries like South Korea (Samsung and LG) have been closing the gap (with Chinese companies joining the party in the near future) and started developing innovative mobile products. Many of those are only introduced onto local markets, which makes a fast mobile network necessary. The US (Motorola) and Europe (Nokia) also have those technologically savvy companies, but when it comes to products, they are looking more towards the packages carriers offer. It's also a hard for US or European companies to penetrate the Asian markets.

Carriers in Asia tend to be much more on the same page when it comes to which technology to use in the networks and agreeing on standards (for instance on video), making shared investments a possibility. Just as an example, in the Netherlands the three biggest Dutch providers are all investing into their own network using somewhat different approaches, making it a much more costly operation (with those investments adding to the reported 2,65 billion euro the providers had to pay to get the initial UMTS licenses which were sold by the Dutch government).

Asia (especially Japan) has a large group of technology hungry customers who jump when new technologies come out and are willing to buy the newest gadgets or trends. With that in mind (plus the fact that fast internet and mobile access is promoted by most Asian governments), it's not that much of a risk for companies to invest into the newest technologies. Most Europeans and Americans are much more conservative when it comes to new technology or products and need some assurance before for example embracing a new mobile lifestyle. There are early adapters, but in Europe and the US it's a much smaller percentage of the total number of consumers then that of their counterparts in Asia.

So as stated it will take some time before we have the same kind of services the Japanese enjoy now, mainly because of the difference in markets and consumer behavior. Of course when that time comes, they will be ahead by some years again...

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