The runaway success of i-mode can no longer be put down to some characteristic of the Japanese that makes them keener on mobile technology. Fran Heeran says it’s the technology of the delivery mechanism, not the psychology of the user, that’s bringing in the big bucks. But can the i-mode model translate into Europe?
For years consumer enthusiasm for mobile content has set Japan apart from the struggles faced by the rest of the world’s mobile industry.
One of the strongest reasons for i-mode’s success in Japan was the close link between the content presentation and the business model.
Paying for content couldn’t have been easier for consumers: official sites can charge for content through the consumers existing monthly bill (and NTT DoCoMo takes between 12 and 15% of the revenue). The unofficial providers use other payment methods, such as credit cards (with NTT DoCoMo generating revenue from the data traffic).
So if i-mode is so well thought out, why can’t carriers replicate this success in other regions?
If European carriers had launched i-mode a couple of years ago it would have been revolutionary. But much has changed in the intervening years.
Other mobile data technologies have largely caught up. Europe, the US and a significant portion of the rest of the world now have fast, packet switched data networks, richer content formats with WAP 2.0 and powerful handsets capable of supporting a wide range of these new content formats. The emergence of 3G has paved the way for a new generation of content including rich multimedia such as video and music, and is doing so at significantly higher speeds than the original i-mode and WAP services.
So it will be very interesting to see how O2 markets i-mode to consumers. The anti-climax of the original WAP launch taught carriers not to market technology directly to consumers, but instead to focus on compelling services – a lesson perhaps best illustrated in recent years with Vodafone Live!
O2 appears to be following this trend in pitching i-mode as a service brand rather than “cool Japanese technology”.
The offer for Europe
So what does i-mode offer to European consumers, content providers and operators? And what might differentiate it sufficiently to stand any chance of gaining a foothold in this market?
For the content provider,
i-mode offers a significant improvement in the revenue model when compared to alternative content services.
i-mode employs a simple low-cost subscription model for the majority of its services. Compare this to the 40%+ extracted by operators for other services.
On the negative side, most providers cannot afford to ignore the WAP market, so i-mode means they will have to produce multiple format versions.
It’s easy to see the opportunity here for the content conversion/transcoding platforms, which is why you will generally find that the vendors of these (and i-mode related infrastructure in general) are so enthusiastic about i-mode in Europe.
For the operator, in this case O2, it’s harder to see the benefits. By all accounts O2 Active is very successful, and it has the established off-portal O2 Revolution services. With those O2 already has a well-defined and strongly promoted content business.
The Spanish axis
Some have suggested in the past, perhaps rather cynically, that any operator looking to launch i-mode in Europe does so in an attempt to make them an attractive purchase proposition for NTT DoCoMo.
In fact it’s doubtful that this played any part in O2’s decision – although it is interesting to note that Telefonica also offers i-mode services. This marriage perhaps represents i-mode’s best (and last) chance of gaining significant traction in Europe. With the combined footprint of Telefonica and O2’s operations, there is now the opportunity to push the service across Europe to a large, existing customer base.
But what, finally, does i-mode give the consumer? The simplicity of the i-mode offering, clear subscription terms and competitive pricing for content services should certainly prove popular, especially in a market continually criticised for vague charging terms and hidden subscriptions.
Simplicity may appeal to new subscribers and increase data usage among O2’s existing subscriber base, although how the data services will stand up to emerging 3G services such as video remains to be seen. Perhaps for those consumers unwilling to pay the significant 3G fees currently charged, i-mode provides a good, cheaper alternative.
We wait with interest to see the market proposition from the combined Telefonica/O2 entity around i-mode. It will take some time before the initial hype subsides, before its long-term proposition can be evaluated, and before a conclusion can be reached.
Latest posts by (see all)
- Avaya considering $5 billion buy out - March 27, 2019
- Mitel Appoints Graham Bevington as EVP and Chief Sales Officer - April 10, 2015
- Exertis is the New Name for Micro-P - October 24, 2013