Monday, July 23, 2007

Heated debate about i-mode's exit from the UK

One of the newsgroups I belong to, focussed on the mobile market in Japan, is up in arms about this article from El Reg claiming that it's cultural differences that have determined the success of i-mode in Japan. Unfortunately, the myths about Japanese life today still exist and the writer of the article has succumbed to them in terms of the Japanese not having home computers and the like (except that you can get rather nice laptops these days to desk top real estate isn't the issue it was 10 years ago). Not what one would expect from El Reg but hopefully it's a one-off.

Anyway, it prompted me to think about why i-mode failed in the UK...

1. It was an exclusive deal with o2 so had no chance of gaining critical mass. There were probably folks on other networks who would be interested, but not if it meant switching networks. AFAIK, there was little marketing effort to move existing o2 customers to i-mode and instead the marketing effort that I was exposed to was about recruiting new customers and it is common knowledge that it is way more expensive to recruit a customer than to retain one.

2. There is little awareness in the UK as to what i-mode is unless you happen to work in the mobile industry or are really geeky about mobile phones (in which case, you're probably working in the mobile industry!). I know of a few folks who had i-mode phones for testing but it never became their primary phone.

3. Timing was out. We were already in the start of the 3G world in the UK by the time i-mode came out. Why are you going to go 'back' to 2.5G/i-mode when you can have the overhyped wonders of the 3G world? The network operator Three had already spent millions on extolling the virtues of 3G so the i-mode message was lost in translation

What do you think? Was i-mode always on a hiding to nothing in the UK or could/should it have worked if handled differently?

4 comments:

  1. Hi Helen -- Another reason i-mode is failing in Europe is that it is yet another walled garden, not the Web. Yes, the walls of the garden are a bit more vaguely defined, but it is a walled garden none the less. i-mode content providers develop content for one operator according to that operator's commercial terms. The content is not available across operators and the charging model does not make sense when measured against flat rate Internet. My understanding is that even in Japan customers are demanding "full Internet" access through advanced browsers and flat-rate tariffs and operators are giving them what they want. The IHT called imode a "forerunner" of the mobile Internet. I think that moniker could stick.

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  2. I'd put it down the high revenue share on premium SMS in the UK compared to other countries, and the inability to allow for recurring/subscription charges for 3rd parties.

    First point, in a market where standard SMS rev share is 80%, offering 85% to build a the same service but only to target 100k customers is a waste of time. In other countries, where rev share on SMS can be as low as 40%, then the i-mode model is hugely attractive. In the UK, its not.

    Secondly, i-mode didn't allow subscription/recurring billing for 3rd party providers. So their choice, focus their efforts on 100k one-off purchasers, or 52 million people who might be charged multiple times with no effort?

    It's a shame O2 wasted their time with i-mode, we could probably have had cross-network premium voice and video shortcodes if they'd spent their money more wisely.

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  3. Dan's right. Surely the way to get real added-value is to take the dynamics of the web (open, free to experiment, cheap to make mistakes) and combine them with the genuine advantages of the mobile platform (eg, security, location). I never understood why a cut-down, locked-up mini-web would be attractive to anyone.

    By the way -- and I speak as a satisfied O2 Premium Customer -- O2 should focus on reducing the cost of data access and let other people focus on producing content.

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  4. I think one of the key reasons imode failed was because the handsets were rubbish...not to mention the ads...

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