Mobile Point View by Paul Ruppert

China's 3G Soft Launch planned for Beijing Olympics

3G in China hits the Olympic Track

According to Xinhua, China's government news service, third-generation (3G) mobile phone service will be available for use at August's Beijing Olympics as the high-speed wireless connection service and related products were presented as SWAG to Olympic VIPS on Monday.

China Mobile and South Korean mobile phone producer Samsung presented 15,000 3G handsets, plus data cards and nearly 3 million yuan (US$ 428,600 ) of calling fees to the VICs (Very Important Chinese) of the Beijing Organizing Committee for the 29th Olympic Games in Beijing on Monday.

With the limited base of staff and volunteers for the Games who can utilize high-speed data transmissions, allowing them to view mobile televised games, play videos, and surf the Internet on cell phones, it signals the Chinese government's intent and interest to issue licenses and finally enter the foray of 3G mobility. CMCC's technology is the Chinese 3G standard, known as TD-SCDMA (Time Division Synchronous Code Division Multiple Access), and has been conducting limited trials of 3G service in China.

China Mobile has building out their TD-SCDMA network in eight cities, five of which are to host events for the Beijing Olympics in August, including Beijing, Shanghai and Tianjin, advised company insiders.  China Mobile is the sole Olympics partner/sponsor for the Beijing Olympics for mobile communications services while Samsung is the only sponsor for mobile terminal supply.

The beginning of the beginning of the 3G wars

With the ITU (International Telecommunication Union) having recognized TD-SCDMA as one of the world's three official 3G standards in 2000 it is inevitable that the next mobile technology wars will be started soon. The other two are Europe's WCDMA and North America's CDMA 2000. With close to 600 million mobile users in the Chinese domestic market, close to twice the US population, as well as the twice the population of the EU, where do you think this market battle will be settled--out of the US, Europe or China?

Facebook's Hong Kong Connection vs QQ

Li Ka-Shing overlooks QQ?

Last month it was reported that Li Ka-Shing, one time plastic flower manufacturer, 11th richest man on  the planet and Hong Kong billionaire upped his stake in Facebook to more than $100 million according to  published reports. Li previously invested a reported US$60 million in Facebook in November 2007.   

That means that he now owns nearly 1 percent of Facebook, assuming the deal was made at the same $15 billion valuation that had been placed on the company since Microsoft's US$240 million of October 2007. If the valuation has dropped, he owns even more!

Li, who is chairman of port conglomerate, real estate speculator and telecom company Hutchinson Whampoa, told reporters on his company's conference call:

"Facebook is doing very well and we could have some synergy between the 3G services of Hutchison and Facebook, so the customers could use Facebook on mobile phones."

Certainly, mobile is the biggest opportunity for social networking in China, with close to 600 million mobile users in the middle kingdom, versus less than 30% of that for China's web uses--172 million users. Facebook may be considering this as a move to enter the China market by thinking it can get "on deck" with the Chinese carriers, resulting in tens of millions of users very quickly. If Facebook thinks this is access to China's mobile silk road, ask yourself how much of CMCC does Li Ka Shing own? Answer: 0%. Such simplistic theories are easily dismissed.

An Investor First

The "Chinese Way" prefers to do business with a local Chinese provider. Better joss with a local who can then go global, than a loa wai company entering China. The cultural reveloution was not that long ago, and just as economic nationalism is expressed with US consumers (Buy American!), the same happens in China. Facebook will not so easily enter the Chinese market on the coat tails of Li, especially since mobile operator Hutch 3 (Li's primary property) in Hong Kong has no formal commercial presence in the mainland. Better to deal directly with the Chinese, something Facebook's new COO, Sheryl Sandberg is likely to be the only one in the building who has ever sat across from a Chinese functionary, from her prior experience at the US Treasury Dept.

Plus there are rumors that Facebook is seeking a revenue return for Facebook subscribers who utilize mobile operator text and mobile messaging through their Facebook account. Whoa--they think they will get operators to pay them for messaging traffic. A very bold commercial position which would be an attempt to realign the mobile messaging business. This is an opportunity that I've surmised in the past and that I think is possible where social networking services could capture messaging traffic if they approach it correctly--not by confrontation with the mobile operators but through co-opting. Perhaps they think China's social silk road runs through Li Kai Shing. Perhaps they think they can leverage CMCC much as Apple has in taming the Dragon? Clearly University Ave is a long way from Tsim Sha Tsui and I don't think the Cuppertino business case is the one to follow in China.

What will QQ will do?

Who is QQ you ask? For the uninitiated or overly  western centric in the audience, QQ is the world's largest social networking service with over 300 million users in China, with revenues exceeding US$523 million. That's almost 4x Facebook's estimated US$150 million in revenues. With an operating profit of US$224 million, and 21% of its total revenues of US$334 million generated from NON ADVERTISING MOBILE revenues of $110 million perhaps Li Kai Shing should have invested in TenCent the owner of QQ.

QQ is still growing. Notably, the ad market is largely untapped - mostly due to the misunderstanding of IM and SNS by ad agencies and brands in China. Lots of work to convince those folks that a service that attracts so many millions is, perhaps, a media in its own right. Probably why Li Ka Shing invested in Facebook in the first place. He gets it that it is an emerging media platform, not a simple application.

 

Interview with Laura Marriott, Mobile Marketing Association

Here's a an audio (scroll down) primer on the Mobile Marketing Association from its President, Laura Marriott. I had the distinct pleasure--and fun--of meeting and interviewing the President of the Mobile Marketing Association at CTIA which you can listen to here.

Laura's s view of CTIA

...not much emerged at the show from the mobile advertising segment. Although there was increased interest and attendance from the agency and advertising arena reflecting a growing understanding and recognition of the importance of mobile in the marketing mix. Meaning: good things to come in mobile marketing.

What is the MMA?

Good question--a laurel which Laura tossed my way twice in the interview. MMA is a global trade association across the entire mobile marketing ecosystem with regional representation in the US, Europe, Asia and Latin America reflected by 600 companies in the business drawn from across the world. The Mobile Marketing Association is the premier trade association that strives to stimulate the growth of mobile marketing and its associated technologies. It's membership is comprised of drawn from the worlds of advertising agencies, advertisers, hand held device manufacturers, carriers and operators, retailers, software providers and service providers, as well as any company focused on the potential of marketing via mobile devices. 

Listen to Laura describe the differentiating aspects of innovation and creativity development across the world.  (1x, 11:51 min)

Is the MMA important?

Yes. As consumers increasingly use their handsets to browse the Web, it's no wonder that advertisers see mobile screens as valuable turf. In the US, cell phones haven't yet proved to be the same kind of advertising bonanza as the Internet, mostly because of the wireless industry's more controlled nature and the slower adoption of text messaging and mobile Web services. But momentum is gradually building, especially behind text-based marketing campaigns, which are more prevalent in Asia and Europe.

According to research firm eMarketer, worldwide spending on mobile advertising totaled $2.7 billion last year and is expected to hit $4.6 billion in 2008, rising to $19.1 billion by 2012. In contrast, eMarketer projects that Internet advertising in the U.S. alone will reach $25.9 billion this year. Global brands drive much of it since the advertising business is driven by global brands, while the types of marketing varies region to region. More text based in other parts of the world than the US, with use of sponsored Peer to Peer messaging for example in places such as India and Africa.

MMA Boards in each region set the regional focus while following global advertising guidelines and policies. Overall goal of the MMA is to provide ease of use of for global brands to enter the market on a global basis, not a carrier to carrier, country to country basis. Part of this is promoted through 8 events across the globe sharing as a best practice identification and inspiration process source. For those who are interested in pursuing the MMA best practices, there are also lots of white papers and other free downloads at their website.

The Elephant's Legs

MMA dances between the legs of two industry elephants, advertising and mobile. Through the deft leadership of Ms. Marriott she's been able to wrangle these beasts and have them cooperate successfully. Challenges exist such as extending reach and fully using the feature rich phones for advertising, but through education of brands as well as consumers on leveraging the technical sophistication of mobile phones the conversation around mobile advertising has made great strides.  As Laura rightly concludes: "Mobile advertising is going to be hot this year!"

GestureTek: CEO Interview

While at CTIA 2008 in Las Vegas I ran into to William R. Leckonby, CEO of GestureTek which you can listen to here (scroll down).

Bill Leckonby doesn't look like your EZ Bake CEO so often seen at fledgling companies. Bill is in his 60s, a silver haired Yale trained engineer and has over 22 years of CEO or President experience. That's reflective of GestureTek's heritage, a going concern launched in 1986 when they invented and shaped the field of ‘applied computer vision’ for computer-human interaction. The company’s multi-patented video gesture control technology (VGC) lets users control multi-media content, access information, manipulate special effects, even immerse themselves in an interactive 3D virtual world – simply by moving their hands or body.  Think either CNN anchors on election night changing screens with the movement of a hand or Tom Cruise in Minority Report--all their handiwork.

Listen to my interview with GestureTek CEO (1click, 5:38 mins)

GestureTek now has jumped to mobile. Through the camera on your mobile phone, any handset device  device can be enabled to control the device through gestures such as shaking, rolling, or banking.  Minimal software embedded on the camera pre-distribution by the operator, and that's it. Alternatively it can be downloaded via a game program which incorporates the GestureTek software. Very low calorie high impact solution. GestureTek already has their software on applications within NTT DoCoMo and Telefonica in Spain.

Watch GestureTek. They are about to become a long term, overnight success story.

China Mobile: It Pays to be a Winner

US$3.4 billion revenues in one quarter

China Mobile (CMCC) the world's largest mobile phone carrier, announced today that its first-quarter profits are up 37%. China has the largest population of mobile users, with around 520 million subscribers. The Chinese government predicts that this number will increase to 600 million by the end of 2008.
China Mobile posted a profit of 24.1 billion yuan (US $3.4 billion) in the first-quarter that ended on March 31. Subscriptions rose 6% for a total of 392 million users. New accounts accelerated by 33% to 7.6 million per month in the quarter, driven mostly by new business in rural China. China's eastern cities are near the saturation point, so the company is targeting the countryside. With everything in China on hold post the Olympics, the closely awaited issuing of third-generation (3G) licenses will probably be announced sometime in October.  Just imagine two years from now how much influence will have in the mobile business. CMCC as a buyer with close to a billion users of handsets, infrastructure, applications and content needs. Wow.

China Mobile's iPhone BATNA

What is CMCC's BATNA point ?

Reports from Beijing indicate that China Mobile is taking a silence is golden approach with Apple over the introduction of the iPhone in China. Of course the phone itself is already there being hacked and  sold in the after market to interested inhabitants of the middle Kingdom willing to shell out about 3400 RMB

"We are keeping in touch with Apple over the iPhone, but details such as business models and commercialization should be settled before we enter into formal negotiations," said Chairman Wang Jianzhou at the 2008 Conference of Boao Forum for Asia on Saturday in South China's Hainan Province. 

Reports in January indicate a breech between CMCC and Apple on the amount of revenue share Apple expects and the cost of the iPhone relative to the Chinese market. Some Chinese mobile observers are claiming that Apple is expecting a 20%-30% share of air time revenue from China Mobile. A potentially staggering sum for such a small slice of the Chinese market. I don't think it is worth it from the Chinese side, and their negotiating gambit is a good one.

Given the extreme costs of roughly $500 for a mobile phone expectations are naturally low from the Chinese side on the number of potential units to be sold relative to the over all market, and the trade off in revenue from a high end user is very high for the "opportunity" to carry the iPhone. No wonder the Chinese rightfully stepped back from the negotiations. Their BATNA, or Best Alternative to a Negotiated Agreement, is to do nothing. They loose nothing in doing nothing.

The after market is small enough that those who really want the phone are being supplied sufficiently with hacked iPhones. Scarcity keeps the black market price high enough that only highly motivated buyers seek one out, for mostly the status of it. For example, in the most mobile messaging dense nation on earth, the iPhone is hardly messaging friendly. So China Mobile looks at this and probably thinks "Much ado about nothing." Meanwhile the mostly internet driven media, especially web based writers, pant and sweat as though it is the second coming.

Like so much else in China right now, the Chinese are waiting the west out, and don't expect anything concrete to happen until after the Beijing Olympics.   

Ring Ring...it's Mt. Qomolangma!

Everest: Ready for the Torch

30 Reporters have reached the  Mt. Qomolangma (Chinese name for Mt. Everest)  media center ready to cover the Olympic flame ascent. Described as the "first media team" in the Chinese press, they are poised to cover the Olympic torch relay as it ascends the tallest mountain in the world.  The media center, built at an altitude of 5,040 meters (16,632 ft), was opened on April 2, Yang Zhanqi, an official with the Everest Olympic Torch media center advised on Monday.  Recall in an earlier post here, "Mt Everest Calling", I covered China Mobile's successful installation of 17 base stations and 22 repeaters on Mt. Everest, the highest being at 22,000 ft.

The first team consists of 19 Chinese and 11 lao wai (foreign) journalists. "It's a little bit tough all through the way here, but it is a high altitude, so I still need to take time to get used to it," said Ariane Reimers, a female reporter from the Beijing Bureau of the German ARD Television.     "It is about five thousand meters high, so I still have headache and sometimes could not sleep well in the past few days. We came a long way to reach this high so I really want to write some stories about the torch relay and the torch bearers. It is a great feat to build such a great media center this high and set up camps on the way to the summit. The mountaineers are wonderful," she added.

China Mobile is on Top of the World

The exact time for making the historic ascent has not been identified, perhaps for security reasons as much as the volatile weather conditions on Mt. Everest, but it is thought that sometime this month the torch relay will ascend Qomolangma. No doubt someone already is making calls from up there, with some great roaming revenue for CMCC.

Given all the coverage of the paid for ascents of Everest, one can only imagine whether the trail of demonstrations will lead to Qomolangma as well. I think not since this is Chinese territory. Look for media coverage of the event soon....

Carnival of the Mobilists # 118 is here!

This week's 118th edition of Carnival of the Mobilists is dealt to Mobile Point View, on the heels of CTIA from Las Vegas. I'm pleased to host this week's gathering of all those--including yours truly--emerging from the haze of a week of playing, partying, partaking, praying for, and prestidigitating mobile deals at CTIA in Las Vegas.

The mobile world divinied inspiration while surviving the neon campfire of the Vegas strip with elements of rankings, checking, betting, calling, folding, flirting, raising, and bluffing all while still on the show floor. So follow the dealer playas,  Live from Vegas baby, it's COM #118!

This was my all in bet to have the best hand of CTIA coverage in the mobile world, and my wager has payed off with no fixed limit raises from those contributors who attended CTIA and those who didn't. Thanks to all who contribute to CoM 118 here at Mobilepointview.

Dealer opens with the door card dealt to Jamie Wells at Mobilestance.com, which presents the CITA winners of "The Swaggies" - their clever homage to those unimportant conference freebies and neglected art form of awareness artistry, which inevitably decorates corporate cubicles and children's bedrooms spanning the globe.  [BTW, my best swag scores at CTIA: an iPod nano from Telcordia and DVD boxed set of Ocean's 11,12, & 13 from Nokia. Mucho gracias!]   Great idea Jamie, score some sponsors and make this a regular event for all the major conferences...Jamie, you recieve my recognition as the The Ace of Diamonds submission for this week's CoM for the most innovative take on the common place at a cellular convention.

Chetan Sharma of Always on Real Time Access AORTA shows a gut shot straight with his "CTIA Roundup" covering Mobile's implied odds against any downturn in the economy and covering practically every facet of the industry at CTIA. And, if you haven't read it, join the crowd and get Chetan's new book, "Mobile Advertising: Supercharge Your Brand in the Exploding Wireless Market." Even for insider readers it is clearly the best overview and most current coverage of the mobile advertising opportunity.

The dealer's choice is at Mobile Messaging 2.0 where there's video from Airwide Solution's media event covering Mobile Advertising. Your's truly, Paul Ruppert leads a round table discussion on mobile social networking with additional contributions from Tullio Siragusa of M3Mob, Simeon Coney of Adaptive Mobile and John Puterbaugh of Nellymoser.

Nellymoser's same John Puterbaugh flips the flop card at Mobile 2.0 and Emerging Mobile Media  Services in his "Between a place and some location", where he provides a great analysis of what constitutes same same within a mobile context--plus he graciously mentioned me in his post--Tip of the hat thanks, John.

GoMo News submits a video interview of Evryx Technologies VP of Marketing Dan Dato from GoMo's CTIA News on Wheels. Evryx' SnapNow solution was a finalist in the CTIA Emerging Technology competition--it enables your mobile phone's camera to link to the mobile internet via a click of the shutter. I saw the solution in practice: A) it works  B) pretty kewl.

With the river card, in "SMS Globalization & Growth",  (moi) Paul Ruppert interviews Sybase 365 CEO Marty Beard here at Mobile Point View. In this podcast conversation Marty covers the importance of Sybase 365 in the mobile messaging value chain, including routing over 10 billion SMS per month through the Sybase365 network, Sybase365's foray into mobile banking and commerce, plus Sybase365's innovation R&D in text messaging.

From off the casino floor, come the non-CTIA related posts, including Mike Mace at Mobile Opportunity, who covers research out takes from Rubicon's survey of iPhone users like the date bait factor and where people carry the iPhone in "Some other things you didn't know about the iPhone."

Tomi Ahonen from the Communities Dominate Blog, in Mobile advertising evolving: User-distributed ads, User-created ads, User-priced ads, addresses the obstacles, realities and opportunities of user generated, created and priced mobile advertising.

Vero Pepperrell, Community Gal at Taptology, provides "20 Great Resources for Designers & Developers of Websites", providing a laundry list of valuable touch points for developers seeking both the science and the art behind mobile website design.

Andrew Grill of the eponymic Andrewgrill.com in "Location Based Services Applications Round up & Review", throws a scare card in his review of location based social network applications and examines location enabled mobile applications appearing this year - could this be the long awaited start of mainstream location based services?

Barbara Ballard of Little Springs Design, specializes in the tell (user behavior in poker or mobile) with The Future of Content Adaptation regarding mobile sites. Long tail, money and the semantic web all have parts to play in her hand, so check out her contribution to the pot. 

C. Enrique Ortiz raising the eponymic sites to #2, cenriqueortiz.com, in "Phone Program helps break Communication Barriers"--CEO relays the value and power of Edioma's Edigo software, a telephone translator service which targets the needs of Spanish speakers who require instant translator services, available through their mobiles. 

Ajit Jaokar writes how "Personalization is not a substitute for critical Mass" at Opengardensblog. Ajit takes up the contrarian view against the buzz of pesonalization in mobile versus the ease of monitization power in critical mass. Spot on Ajit.

Dennis Bournique of Wapreview.com in "WIND Italy - Great Deal for Travelers" breaks down his experience as a pre-paid SIM user on WIND during his trip to Italy last week (D, sounds like you fell into the right portal at the Venetian in Vegas)

Ray at Money Blue Book, under the category of frugal tech, covers how you can shave your cell phone costs in "Employee & Student Discounts for your Cell Phone Service."  After a week of opulent illusion in Las Vegas, we all need to be a little frugal with our airtime. And at the wire, Alfie Dennen at Alfie's Blog covers 118118's Ask Anything Service posited against Textperts in the UK.

Don't forget to leave a Toke (tip) in the form of a subscription or a link for the dealer as you depart the gaming area.

And...seems like the group Zanex is wearing off, so let's call this a wrap from CTIA in Las Vegas & CoM #118. Thanks for visiting MobilePointView. Debi Jones at Mobilejones.com hosts next week's CoM #119. Send your submissions for next week's CoM to: mobilists at gmail dot com.