Thursday, 2 August 2007

O2 and i-mode

I am sorry to post on this a week after the news but I have read yet another article on the abandonment by O2 of i-mode which missed the point.

O2 never gave this a chance. It was possibly the most inept launch of an additional data service in the UK ever. In fairness I should say two things: one, O2 is usually very good at marketing execution; two, there is a lot of competition from other operators for this award and I might have been too hasty.

If O2 were to launch i-mode it should have done it as its exclusive portal not as a possible alternative to O2 Active. To run two side by side is completely perplexing (are you listening T-Mobile with web'n'walk and t-zones? Nobody understands that! - not even your product managers).

If O2 were to launch i-mode it should have done so on the maximum available number of handsets. Not launch it on four devices that looked positively prehistoric to the market, the NECs were an embarrassment which could not handle the incremental traffic that such early adopting customers would want to see. Devices which would laugh out loud if someone even thought about downloading an app to them. Trying to mimic i-mode through using the same handsets was pointless; it is correct that the devices were a defining element of i-mode in Japan but that was only because NTT DoCoMo had the market power to say to suppliers - "you will build devices like this" - and then built them precisely for its market. That was never going to be the case in the UK.

Finally, if O2 were to launch it should have done so with the full support of the management team - the alternative would be not to bother or fire them. What you see here is a classic of a project which was always doomed to fail because the whole team was not behind it - such projects litter large corporate history and particularly operators.

However, O2 did launch i-mode and yet has failed to extend its good points into the rest of the business which is possibly even worse. Fairer business models for partners and all inclusive pricing for the data would considerably improve O2 Active. On the latter it is lagging the market considerably. On the former, i-mode succeeded on a 9% and then a 6% revenue share for the operator and not on the ridiculously outdated 50% that operators persist in asking for.

i-mode had a great brand amongst the early adopter community and could have been a considerable asset in the UK if the operator had been brave enough to shift its existing product into it and make it is mainstay. If I were i-mode I would be extremely annoyed, learn for the future and make sure that if someone destroys my brand in such a way in a key market again that I have cause to sue.

For O2, at least their approach is consistent and it is clear (for now) that the O2 brand is pre-eminent. Remember that it voluntarily shelved Genie - probably the most successful youth mobile brand in history - to focus around O2. Really that i-mode has ended in the dustbin is no surprise, the writing has been on the wall for some time.

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