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The Invisible Revolution
Hints from Asia on the Future of Mobile




      Benjamin Joffe, CEO | +8* | www.plus8star.com
 ...
I am going to talk about
            Asia
       Mobile music
        Mobile TV
     Mobile advertising
     Mobile commer...
Introduction
Internet      Mobile
1.3 billion   3.3 billion




                    Source: Morgan Stanley, 2007
Johnny Hallyday
The Father of French Rock’n’Roll
Manga: 1991
Animation movie: 1995




    Matrix: 1999
General assumption #1

Everything from USA is   great
General assumption #2

Everything from Asia is    weird
          (and sometimes funny)
Who came first?
Where do you get inspiration from?
Innovations are bound to happen
The 7 Mass Media
1st Media Print
2nd Media Recordings
3rd Media Cinema
4th Media Radio
 5th Media TV
 6th Media Internet
 ...
Quick overview
3G penetration in Japan and Korea
 is over 70%; it is <0.1% in China
100%


           80%

                                           USA
           60%
3G users




           40%

        ...
#2 economy, #1 mobile society

#1 mobile & Internet population

#1 digital society
Japan stopped selling 2G
        in 2007
Mobile music
Japanese like ring tones




                   Because they go to karaoke a lot



Anonymous manager at a foreign media c...
More music is sold “online” than
 “offline” in China and Korea
90% of digital music
sold in Japan is mobile
Digital music revenues in Japan




                     Source: Infinity Venture Partners, 2008
Ringback tones were created in
  Korea and launched in 2002

They reached 30% penetration
         in 9 months

          ...
Mobile TV
Koreans now spend more time on
  the Internet than watching TV
Mobile TV penetration in Japan
   and Korea is over 30%
37 million mobile TV phones were
   sold by June 2008 in Japan




     Mobile TV started in May 2006
Over 70% of new handsets in Japan
      are mobile TV-enabled
Mobile advertising
Minimum advertisement hides the
maximum potential.

Mobile is today the ultimate proximity
media, and reaching the Mobile ...
The mobile ad market in Japan was
  over 700 million USD in 2007
Have you heard of?
QR code in a train station
                         with directions to a hotel




QR code on a web page


               ...
TV ad
                                 for a show’s website
   Train ad       Magazine ad
for job portal   for cosmetics

...
Guess who Blyk benchmarked?



          Blyk?
Beyond mobile advertising
Mobile Commerce
Moba-Oku (DeNA)
 Mobile Auctions


              1. Take pic
              2. Select category
              3. Enter info
...
Over 6 billion USD in 2007
Japan’s m-commerce
            =
   2x mobile content
            =
10x mobile advertising
            =
  China’s e-comme...
Mobile books
Several best-selling novels in Japan
  were written on mobile phones
One full bookshelf
for mobile novels
at Kinokuniya,
Japan’s largest
bookstores chain!
The two volumes of
this book “Koi Sora”
(“Loving sky – story
of a love without
gentleness”) sold…
“Koi Sora” sold over 2 million
    volumes (8 EUR / book)



(You can read it for free on mobile)
Even on TV!
Digital books: Internet vs. Mobile




           Flat-fee data plans
             are introduced




                    ...
Mobile Social Networks
“Social Networking
 Is Not a Business”

MIT Technology Review
  July/August 2008
Build communities
                  with matching games
  Attract user
with free games
                                   ...
Starting date



2004   1997   1999   2004   2006
Registered users




60 mln   500 mln   20 mln   14 mln   10 mln
Country’s Internet users




60 mln    500 mln   20 mln   14 mln    n.a.
200 mln   220 mln   35 mln   90 mln   90 mln
Starting date (mobile)



2007    2000   2004   2006   2006
Mobile users (est.)




3 mln   50 mln   6 mln   10 mln   10 mln
Country’s mobile users




 3 mln    50 mln    6 mln    10 mln    10 mln
255 mln   580 mln   45 mln   100 mln   100 mln
Revenues 2007 (USD)




150 mln   520 mln ~200 mln 100 mln 150 mln
Profit 2007 (USD)




(50 mln)   225 mln ~100 mln   35 mln   ~60 mln
Average Revenue From Users



~0%   87%   80%   5%   50%
Impression unit price

                                           PC




                                           Mobile...
SNS on the stock market?
Market-listed SNS



 2006.12     2004.06    2006.09     2005.02
           100 bln HKD 87 bln JPY 104 bln JPY
76 mln EUR ...
Market-listed SNS
2008 Trends
SH906iTV for NTT DoCoMo
                           (June 2008)




                                         Mobile TV serv...
1                   2                   3              4                5                    6                   7

     8...
Mobile service trend
   Mobile TV          Mobile web browsing service




Video phone call            Mobile widget
Mobile lifestyle
infrastructure
Mobile  Media
3G
       +
Flat-fee data
For content, media and advertising:
  New service & revenue models
For mobile carriers:
indirect effects of innovations
Music service helps KDDI
                                              double its new subs
Monthly growth index
 1.50
New ...
More revenues from indirect effects?

                                   Revenue in 2006

                                ...
To remember from the KDDI case
KDDI do not get much revenues directly
from music
           but record companies do and mo...
Thanks!
Thanks!


& Rock’n’Roll :-)
About +8*
There are more ideas
outside your country
          than inside
                   Tom Kelley
                    CEO, IDE...
“Innovation Arbitrage”
• About us
   – +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in...
Selected References
•   Adidas | E-commerce strategy for China, Japan & Korea

•   Bouygues Telecom | Cases studies of lea...
Social Work
• Mobile Monday
   – Founder of the Mobile Monday forum in Beijing since 2006 (3,000+
     members, 23 events,...
Contact Us

www.plus8star.com

benjamin@plus8star.com

benjamin0123                           +81 | Japan

               ...
Mobile Invisible Revolution
Mobile Invisible Revolution
Mobile Invisible Revolution
Mobile Invisible Revolution
Mobile Invisible Revolution
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Mobile Invisible Revolution

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Mobile 3G services trends in Asia. Presentation at Stockholm's "Mobile Focus 2008" in November 2008

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  1. 1. The Invisible Revolution Hints from Asia on the Future of Mobile Benjamin Joffe, CEO | +8* | www.plus8star.com Mobile Focus Conference | Stockholm | November 2008
  2. 2. I am going to talk about Asia Mobile music Mobile TV Mobile advertising Mobile commerce Mobile books Mobile SNS 2008 Trends What to remember for 20 minutes
  3. 3. Introduction
  4. 4. Internet Mobile 1.3 billion 3.3 billion Source: Morgan Stanley, 2007
  5. 5. Johnny Hallyday The Father of French Rock’n’Roll
  6. 6. Manga: 1991 Animation movie: 1995 Matrix: 1999
  7. 7. General assumption #1 Everything from USA is great
  8. 8. General assumption #2 Everything from Asia is weird (and sometimes funny)
  9. 9. Who came first?
  10. 10. Where do you get inspiration from?
  11. 11. Innovations are bound to happen
  12. 12. The 7 Mass Media 1st Media Print 2nd Media Recordings 3rd Media Cinema 4th Media Radio 5th Media TV 6th Media Internet 7th Media Mobile Source: Tomi Ahonen, 2008
  13. 13. Quick overview
  14. 14. 3G penetration in Japan and Korea is over 70%; it is <0.1% in China
  15. 15. 100% 80% USA 60% 3G users 40% Chin Japa 20% a n 0% 0% 20% 40% 60% 80% % of Internet connections measured above 5Mbps (Source: Akamai)
  16. 16. #2 economy, #1 mobile society #1 mobile & Internet population #1 digital society
  17. 17. Japan stopped selling 2G in 2007
  18. 18. Mobile music
  19. 19. Japanese like ring tones Because they go to karaoke a lot Anonymous manager at a foreign media company in 2001
  20. 20. More music is sold “online” than “offline” in China and Korea
  21. 21. 90% of digital music sold in Japan is mobile
  22. 22. Digital music revenues in Japan Source: Infinity Venture Partners, 2008
  23. 23. Ringback tones were created in Korea and launched in 2002 They reached 30% penetration in 9 months Source: NMS Communications
  24. 24. Mobile TV
  25. 25. Koreans now spend more time on the Internet than watching TV
  26. 26. Mobile TV penetration in Japan and Korea is over 30%
  27. 27. 37 million mobile TV phones were sold by June 2008 in Japan Mobile TV started in May 2006
  28. 28. Over 70% of new handsets in Japan are mobile TV-enabled
  29. 29. Mobile advertising
  30. 30. Minimum advertisement hides the maximum potential. Mobile is today the ultimate proximity media, and reaching the Mobile is reaching the Consumer. Akihisa Fujita CEO of D2 Communications (Leading mobile marketing firm)
  31. 31. The mobile ad market in Japan was over 700 million USD in 2007
  32. 32. Have you heard of?
  33. 33. QR code in a train station with directions to a hotel QR code on a web page QR code printed on chocolate
  34. 34. TV ad for a show’s website Train ad Magazine ad for job portal for cosmetics Newspaper ad for health product
  35. 35. Guess who Blyk benchmarked? Blyk?
  36. 36. Beyond mobile advertising Mobile Commerce
  37. 37. Moba-Oku (DeNA) Mobile Auctions 1. Take pic 2. Select category 3. Enter info 4. Check 5. Done!
  38. 38. Over 6 billion USD in 2007
  39. 39. Japan’s m-commerce = 2x mobile content = 10x mobile advertising = China’s e-commerce
  40. 40. Mobile books
  41. 41. Several best-selling novels in Japan were written on mobile phones
  42. 42. One full bookshelf for mobile novels at Kinokuniya, Japan’s largest bookstores chain!
  43. 43. The two volumes of this book “Koi Sora” (“Loving sky – story of a love without gentleness”) sold…
  44. 44. “Koi Sora” sold over 2 million volumes (8 EUR / book) (You can read it for free on mobile)
  45. 45. Even on TV!
  46. 46. Digital books: Internet vs. Mobile Flat-fee data plans are introduced Source: Infinity Venture Partners, 2008
  47. 47. Mobile Social Networks
  48. 48. “Social Networking Is Not a Business” MIT Technology Review July/August 2008
  49. 49. Build communities with matching games Attract user with free games Chat Avatars BBS Journal Clubs Get new users with Word-of-mouth
  50. 50. Starting date 2004 1997 1999 2004 2006
  51. 51. Registered users 60 mln 500 mln 20 mln 14 mln 10 mln
  52. 52. Country’s Internet users 60 mln 500 mln 20 mln 14 mln n.a. 200 mln 220 mln 35 mln 90 mln 90 mln
  53. 53. Starting date (mobile) 2007 2000 2004 2006 2006
  54. 54. Mobile users (est.) 3 mln 50 mln 6 mln 10 mln 10 mln
  55. 55. Country’s mobile users 3 mln 50 mln 6 mln 10 mln 10 mln 255 mln 580 mln 45 mln 100 mln 100 mln
  56. 56. Revenues 2007 (USD) 150 mln 520 mln ~200 mln 100 mln 150 mln
  57. 57. Profit 2007 (USD) (50 mln) 225 mln ~100 mln 35 mln ~60 mln
  58. 58. Average Revenue From Users ~0% 87% 80% 5% 50%
  59. 59. Impression unit price PC Mobile April 2005 April 2006 April 2007 May 2008
  60. 60. SNS on the stock market?
  61. 61. Market-listed SNS 2006.12 2004.06 2006.09 2005.02 100 bln HKD 87 bln JPY 104 bln JPY 76 mln EUR 10 bln EUR 700 mln EUR 830 mln EUR
  62. 62. Market-listed SNS
  63. 63. 2008 Trends
  64. 64. SH906iTV for NTT DoCoMo (June 2008) Mobile TV service “One Seg” Twist screen with data menu overlay Decorated and animated mobile Internet browsing (left) messaging
  65. 65. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 • 1 | Music & video channel | Overnight download of • 13 | GPS | Location info, maps and navigation programs via 3G network • 14 | Area Mail | Public alert information service • 2 | “One seg” | Terrestrial digital mobile TV • 15 | Phone backup | Contacts, messages and pictures • 3 | iMotion Video Clip | Up to 10MB/video automatic Internet backup during idle time • 4 | 3D games with motion sensor • 16 | Remote lock | Remote locking of the phone • 5 | Full track music download • 17 | Phone search service | Locate your phone if you • 6 | Flat fee unlimited music lost or forgot it • 7 | Deco-mail | Rich HTML mobile push email • 18 | Wallet phone | Contacless chip for transportation, • 8 | Deco animation | Animated Flash mobile email membership cards, shopping (offline and online), credit card, key/ID • 9 | Receiver status message | Displays the receiver’s status message when calling him/her • 19 | World Wing | 3G + GSM international roaming • 10 | Video phone • 20 | Translator | Speak to the phone to get a translation to and from English or Chinese • 11 | 2-in-1 | Use two separate phoner numbers and mobile email addresses on a single device • 21 | High-speed | HSDPA with up to 7.2Mbps download speed • 12 | i-Channel | Information service
  66. 66. Mobile service trend Mobile TV Mobile web browsing service Video phone call Mobile widget
  67. 67. Mobile lifestyle infrastructure
  68. 68. Mobile  Media
  69. 69. 3G + Flat-fee data
  70. 70. For content, media and advertising: New service & revenue models
  71. 71. For mobile carriers: indirect effects of innovations
  72. 72. Music service helps KDDI double its new subs Monthly growth index 1.50 New subs share / Market share Ring songs December 2002 Full Song Downloads November 2004 1.00 0.50 0.00 Nov-01 Nov-02 Nov-03 Nov-04 Nov-05 Nov-06 May-01 May-02 May-03 May-04 May-05 May-06 Aug-01 Feb-02 Aug-02 Feb-03 Aug-03 Feb-04 Aug-04 Feb-05 Aug-05 Feb-06 Aug-06 -0.50 Source: Telecommunications Carriers Association, 2007
  73. 73. More revenues from indirect effects? Revenue in 2006 0.2 EUR / song Content fee (revenue share) 10 MEUR 50M full songs 44 EUR monthly ARPU New subs thanks to innovation 330 MEUR (~50% of subscribers increase) 1.25M new users 1bln EUR! Increased usage of existing subs 4.5 EUR monthly ARPU (~50% of data increase from 2.5G 648 MEUR to 3G) 12M 3G users Source: [+8*] estimates based on KDDI figures
  74. 74. To remember from the KDDI case KDDI do not get much revenues directly from music but record companies do and mobile music is still growing! KDDI makes HUGE money thanks to “halo effect” & indirect revenues from music data packages new subscribers churn reduction
  75. 75. Thanks!
  76. 76. Thanks! & Rock’n’Roll :-)
  77. 77. About +8*
  78. 78. There are more ideas outside your country than inside Tom Kelley CEO, IDEO The 10 faces of Innovation
  79. 79. “Innovation Arbitrage” • About us – +8* | Plus Eight Star is the leading cross-market and cross-cultural consultancy in Asia. – We provide local expertise & global perspective on mobile and Internet innovation from China, Japan and South Korea to add value to and accelerate the development of our clients’ businesses. • Our services – Analysis of proven best practices and business models from Asia – Other services: executive study trips, market entry strategy, M&A advisory, partners identification, negotiation support. • Founder & CEO: Benjamin Joffe – 9 years experience with mobile & Internet in Asia – Selected among “China’s Top 100 mobile industry influencers” in 2007 – Regular speaker at events on mobile and Internet in Asia – Fluent in English, Japanese, French with working knowledge of Mandarin, Korean and Spanish
  80. 80. Selected References • Adidas | E-commerce strategy for China, Japan & Korea • Bouygues Telecom | Cases studies of leading Asian Web 2.0 services and virtual worlds • Deutsche Telekom / T-Online | Benchmark of Korean mobile & Internet convergence strategies • Hemisphere | Analysis of mobile marketing best practices in Japan and South Korea (Hemisphere is a leading digital advertising agency), analysis of leading social platforms (SNS, virtual worlds, online games). • Microsoft | Analysis of Japan’s key players and market catalysts for mobile commerce market positioning in China • DeNA | Case studies of the best practices of leading social networks in China and South Korea (DeNA operates Mobile Game Town, Japan’s leading mobile SNS service) • China Mobile | Benchmark of Korean leading online communities • Sands Capital Management | Evaluation of China’s investment opportunities in social networks in China
  81. 81. Social Work • Mobile Monday – Founder of the Mobile Monday forum in Beijing since 2006 (3,000+ members, 23 events, over 80 presentations). • Media – Monthly column on Asian innovation for Asian Business Leaders (one of the leading Chinese business magazines), numerous interviews in international media. • Events – Regular keynote speaker and moderator at Internet, Telecom, Media and Investment events e.g. ITU Asia, Asia Venture Capital Forum, China Mobility International Summit, O’Reilly’s Graphing Social Patterns, Red Herring Asia, Media 08 Conference, Wireless Developer Forum, Open Web Asia, XMediaLab, Mobile Monday Global Summit, etc.)
  82. 82. Contact Us www.plus8star.com benjamin@plus8star.com benjamin0123 +81 | Japan +82 | Korea http://twitter.com/plus8star +86 | China Telecom & Internet www.linkedin.com/in/benjaminjoffe + Added Value * High quality www.slideshare.net/plus8star
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