Asia's Mobile Mashup Free-For-All

Across the region, carriers and handset makers are locked in a race to pack the most features and functions into cell phones

by Brian Bremner

China Mobile chief executive officer Wang Jianzhou is clear on the role he wants cell phones to play in the lives of his subscribers. "We want to make the mobile phone a Swiss Army knife that can do anything for you," Wang said in a recent interview with BusinessWeek editors.

His company is well on the way to reaching that aim. China Mobile (CHL), the world's biggest mobile-phone operator, has a subscriber base of some 300 million—roughly the equivalent of the U.S. population. Those subscribers have sent some 255 billion short messages so far this year, and they're serial music downloaders.

Little wonder non-calling services already make up almost one-quarter of China's Mobile's total revenue. By contrast, data makes up only about 13% of service sales at Cingular Wireless, the top U.S. wireless service provider.

Convergence of Features

The idea that the mobile phone should be a one-stop shop of digital services is universally shared in Asia. The region's universe of wireless-handset subscribers is approaching 900 million, and markets such as Japan, South Korea, Australia, Taiwan, and Hong Kong offer the bleeding edge in mobile calling, applications, and services. There's also a convergence of features among cell phones, personal digital assistants, cameras, MP3 players, and high-speed wireless networks that's turning mobile phones into all-purpose digital devices.

Telecom giants across the region are encouraging the trend, hoping to boost sales of the higher-margin non-voice services and applications. Global handset makers are doing their part, too. Nokia (NOK), Motorola (MOT), Samsung Electronics (SSNGY), and Japan's NTT DoCoMo want to position their gadgets as a must-have, multi-faceted digital appliances for those on the go.

Monster Mash

"What's interesting right now is there are the first signs of a convergence between the mobile world and the Internet world" in Asia, says Aloysius Choong, a senior market analyst at IDC's Asia/Pacific personal systems division.

But the combination of disparate features into one device isn't just a top-down phenomenon pushed by carriers and manufacturers. Consumers often take the lead, playing with user-generated content in myriad ways. They can seamlessly "mash up" or combine, say, music or video from various sources and integrate applications from their personal computers and printers with their handsets.

The feature-power of mobile phones and the creative melding of content and software applications are bound to increase as 3G mobile handsets and ever-speedier wireless networks continue to be rolled out across the region. Roh Jun Seok, a researcher at state-funded Korea Culture Content Agency in Seoul, notes that plenty of consumers are already using their handsets to shoot digital photos and video clips and then transferring them to PC-generated home pages and blogs.

What Doesn't It Do?

Wang of China Mobile expects significant growth in mobile Internet applications, such as search, in China, where the total of Internet users has reached some 120 million (see BusinessWeek.com, 11/1/06, "BW CEO Forum: China Mobile at Full Speed").

In Korea, cell-phone subscribers "have begun using their phones to write music, create new game characters, and design games by using simple software," Roh says. To keep up, Samsung continues to crank out feature-laden multimedia phones. The Samsung SCH-B600, for instance, boasts the world's first 10-megapixel camera phone with an optical zoom lens. It also works as a satellite TV receiver, a Chinese and Korean electronic dictionary, a personal media player, a file viewer ,and a removable storage device.