Let me begin by saying that I am not in China, and therefore I believe unequivocally that the 21st century begins January 1, 2001. As the 20th century draws to a close, I'd like to recap the hype and reality of wireless and even -- gasp! --make some predictions about the future.
2000: WAP promised, i-mode delivered
Don't need to spend much time on this tried-and-true diatribe: WAP promised everything from the Internet in your pocket to any information, anytime, anywhere. It delivered painfully unusable services with a kicker of a price tag. i-mode, on the other hand, has given 15 million users exactly what they expected: easy-to-use and reasonably priced email, entertainment, and useful content.
So what lessons can we learn? Well, if WAP operators spent less money on advertising and engineers and more money on market research, they would have realized the obvious:
- Go after the youth market first to prove untested technology and services, then move upstream to business users.
- Give people what they want. Billions of SMS messages are sent every day in Europe alone, so I guess that means users want ... Web surfing on a 4-line screen?
- In order for users to pay for content/services, said contents/services must be A) priced reasonably, and B) easy to pay for. After all this time with decidedly failed business models, none of the WAP operators have gone out to hire their own Mari Matsunaga.* Instead they continue to pin their hopes on technology: GPRS (packet-switched networks) will solve the connectivity problem, new billing software will solve the payment problem, 3G will give us multimedia and solve the content problem ... which is a perfect segue into my next topic.
2001: Java, 3G, and i-mode goes global
So those silly Europeans have dished out some billions (billions! ) of dollars for 3G spectrum, but they can't even figure out how to make money off of their existing data services, let alone how they're going to do it on new spectrum. And to make everyone feel really stupid, NTT DoCoMo gives the world a reality slap by announcing, in no uncertain terms:
- Paying all that money for new spectrum was kind of silly, really, because those costs will just get passed along to the user, making any potentially killer new services darn expensive.
- Initial 3G roll-outs will be a modest 384 k/s, not the 2 gigs/s everyone had been hyping/hoping for.
- Since no one's really sure what kind of services will be killer apps on 3G wireless, current billing models will remain in place for now (and the killer app is still messaging, which doesn't need fat bandwidth!)
So my predictions for wireless in 2001 go something like this:
- i-mode the brand will (has been) surreptitiously slipping into various markets all over the world via minority investments and will force dominant players to wake up, listen to customers, and offer some truly useful and usable services.
- Killer app will still be messaging, but some trivially simple, extremely useful wireless location-based service will explode out of nowhere, shredding existing business models and spawning others.
- There will be a reverse brain drain from the West to Asia (or at least more Western businesses will turn to Asia), as Asia's advanced wireless markets drive up demand for cutting-edge services and solutions that can't be met with local engineering and VC supplies.
- The PDA and cellular phone markets will not converge. Many devices will appear that combine the best and worst of both (and some of them will dominate niche markets, like RIM's BlackBerry in Wall Street banks), but the device of choice for the mass market will still be a phone; keypad, screen, mic, speaker.
- Microsoft, Sun, Nokia, Palm, Symbian, and everyone else will have a huge Cold War battle over the phone's OS and GUI: PocketPC will flounder along, buoyed by Gates' unending capital pool. Java on the handset will be a godsend to businesses trying to turn the phone into an enterprise device. Palm will be reborn as a services/value-add company (or risk ending up like Apple?)
- Wireless gaming, especially with tight integration to PlayStation, GameBoy, and other gaming/consoles, will eclipse PC gaming.
- GPRS deployments will birth desperate attempts to woo early WAP users back for a second try after such a miserable experience the first time around. Stay tuned for "WAP II: Return of the Living Dead" as WAP operators go out on the hustings to renew excitement about data services.
- Western countries, spoiled by relatively cheap, hi-speed, desktop Internet access, still won't "get" this whole wireless thing. Meanwhile the entire rest of the world will leapfrog directly to advanced wireless, and "getting on the net" will mean opening your phone.
Corollary: someone will come up with a cool buzzword to distinguish the 'traditional' (PC-accessed) Internet/Web form the 'Wireless' Internet/Web. Said buzzword will grace cover of every major magazine from Business 2.0 to Red Herring to Time. My failure to be said author is imminent.
- VCs will dump even more capital into any business plan with the word "wireless" in the Executive Summary. Stocks and valuations will rise. And fall. A couple of businesses in California or New York will start a service or license a technology to Korea or Japan or Hong Kong and make a bloody killing. Their competition will keep waiting for the 100 million wireless users in North America to stop driving to work, stop watching TV, stop accessing the Net via DSL, and get wirelessed. They will still be waiting by the end of next year.
So, a year from now many of you will turn your vitriol knobs up to 11 and remind me how many of my feeble predictions were wrong. I salute you. It's the rest of the so-called wireless players I worry about. I can still see them, muddling along with failing business models and never-increasing customer pools, mumbling to themselves "but i-mode's proprietary!" and "those crazy Japanese will buy any old gadget!" and trying to figure out why nobody is using their WAP phone ...
Thus ends my current beef. Gochiso-san.
* Mari Matsunaga was the decidedly non-technical genius behind i-mode's original contents. In a company dominated by engineers and bureaucrats, she had novel ideas like: make i-mode fun and easy to use; users don't care about technology -- they care about contents; brand and marketing are important ...
Beef back to the Chief of Beef: firstname.lastname@example.org