Japanese And European Mobile Are Not So Different, But Europe’s Operators Have A Lot To Learn, Forrester Argues
One-third of Japanese consumers use one of the country’s three mobile Internet services — NTT DoCoMo’s i-mode, KDDI’s ezWeb, and J-Phone’s J-Sky. Meanwhile, less than 2% of Europeans use WAP. How can the Japanese be so different? According to a new brief by Forrester Research B.V. (Nasdaq: FORR), the startling answer is that they’re not. Europeans embrace exactly the same data services as the Japanese do — but in the form of SMS, not WAP.
“The story’s the same in both Europe and Japan where mobile phones reach more than half of all consumers — 58% penetration in Japan against 65% in Europe,” said Matthew M. Nordan, research director at Forrester. “Equally, there’s parity in the popularity of mobile applications. In both Japan and Europe, messaging is the top data application, ring tones and picture downloads come next, followed by news, weather, and sports information.”
With SMS in the picture, Europe stands slightly ahead of Japan in mobile data adoption, but mobile Internet technologies are thriving in Japan while WAP has failed to displace SMS in Europe. The reasons are threefold. Japan has better networks that give consumers instant-on, push-capable mobile data services. SMS offers Europeans the same crisp experience, but WAP over Europe’s GSM networks doesn’t. Japanese operators dictate handset standards to manufacturers, so all phones give users the same smooth online experience. In Europe, manufacturers set the rules — yielding confusion and incompatibilities. And while European operators pursued “walled-garden” approaches, Japanese operators encouraged open content creation and marketed through mass media, phone shops, and on-street demonstrations.
In contrast to Japan, where mobile Internet adoption rose sharply, Europeans will only gradually migrate as networks get upgraded for fast, instant-on data that matches SMS. Firms can get ahead now by importing Japanese know-how to build back-end expertise, marketing acumen, winning content, and handset technology.
“Japan’s mobile Internet boom hinged on pay-per-use billing options and content distribution facilities,” Nordan added. “Dutch telco KPN should tap its stakeholder DoCoMo for these capabilities — not for the i-mode brand. Few European operators have successfully marketed new data services, whereas independent phone shops like The Carphone Warehouse have succeeded. The UK phone shop leveraged its physical distribution network to make Mviva, its mobile portal joint venture with AOL, a strong competitor to mobile portals run by the operators it sells subscriptions for. Vodafone should mimic how its Japanese subsidiary J-Phone uses retail outlets as education centers for new services like mobile photos. European media giants like Endemol can learn how to manage content in multiple formats from Japanese specialists like CYBIRD, which develops and hosts Disney’s content across Japan’s three incompatible mobile Internet services. Finally, the operator-developed mServices standard shows that Europe’s handset business is becoming like Japan’s. Matsushita or Sony Ericsson could take a bite out of Nokia by building phones to spec for operators like Vodafone or Orange.”