When I first visited Seoul in 2004, South Korea was already a CDMA stronghold, and Korean consumers were hooked on the services available on their phones via a reliable and relatively high-speed mobile data network. This gave Korean companies such as LG and Samsung a considerable advantage over rival manufacturers as operators in Western markets struggled with nascent 3G WCDMA networks.

It was also apparent that vibrant colour screens were a key differentiator. They featured on Korean PNDs and mini-TVs delivering a quality of experience I had never seen before.

Other technology advances struck me during subsequent visits. By the time I visited Korea in 2006, it had a 3G WCDMA network as well as mobile TV DMB technology. I went out during the evening that the South Korean football team was playing a qualifying game for the World Cup. The number of people I saw in shops and restaurants crouched over their phones watching the game on innovatively designed clamshell handsets with rotating screens that allowed landscape TV viewing amazed me. I’d never seen anything like this before.

Although mobile TV subsequently failed to meet expectations on a global level, this was another example of Korean consumers being early adopters of cutting-end technology. This immersion in emerging technology trends undoubtedly contributed to Samsung and LG becoming the second- and third-largest manufacturers of mobile phones worldwide.

Yongsan Electronics Market, Seoul (Source: CCS Insight)

On my most recent visit, I took two of my colleagues who had not visited Korea before to the Yongsan Electronics Market. They were both extremely impressed by row-upon-row of the latest and greatest consumer electronics, but from my perspective, the eighth floor was a shadow of its former self. Several things struck me. The number of franchises had reduced dramatically, and there were no mobile phones that looked particularly disruptive or innovative. Furthermore, it was clear that the dominance of the two home brands had diminished and some brands had disappeared altogether. Talking to the shop assistants, it was immediately apparent that, as in other markets, Apple’s iPhone has had a major impact. The iPhone 3GS was one of the first foreign devices to really succeed in South Korea, and excitement is building in anticipation of the iPhone 4’s arrival. There were many displays promoting Apple’s newest device, albeit contravening Apple’s rigorous branding guidelines and doubtless giving Apple’s “brand police” sleepless nights (see image above).

The complete lack of any tablet products surprised me. Although this is a nascent segment that is dominated by Apple, I expected to see a multitude of devices from no-name brands. Of course this may just be a matter of timing, given that Samsung and LG have announced plans to release tablet devices, but historically I’m sure they would have had products available in their home market at this stage.

The feeling I got was reminiscent of a visit to Japan in 2002. I’d grown up with a perception that a visit to Tokyo would be like stepping into a time machine and visiting a future world, but I came away feeling disappointed having already seen many of Japan’s most forward-looking innovations at home.

My concern is that Korea could be reaching a similar tipping point. The baby-boomer generation that was motivated by the necessity to rebuild its country following the devastating Korean War of the 1950s is in transition. On this basis, Korea’s large consumer electronics conglomerates are going to have to look beyond home-grown innovation and diversify their operations to ensure they don’t miss emerging trends.

This is undoubtedly relevant in the mobile phone sector. Although Korean companies remain world leaders in areas such as screen and battery technology, it is no longer enough to excel in hardware alone. Software, services and content — many of which are emanating from the west coast of America — are now a critical part of the mix. Having a deep understanding of these trends as well as an opportunity to influence their evolution will require the Korean manufacturers (and others, such as Nokia) to reach beyond their corporate headquarters in their home markets and embark on a new collaborative approach to business. If they don’t move in this direction, they risk finding themselves in a similar situation to Japanese phone manufacturers, which gradually saw their global market share shrinking, leaving them with little option but to retrench to their home market.

More interesting, though, were the constant references to a “new strategy” by CEO Vittorio Colao. He summed this new thinking up as “the data bet is the right bet”. The full details will be revealed later in the year, but Mr Colao dropped some heavy hints about the new direction. I’ve set out the most important ones below.

• An avalanche of smartphones and an explosion of data on its networks are driving this new thinking within Vodafone.

• Vodafone is confident that it can cope with demands for data capacity and is so “comfortable with the economics” of smartphones and data traffic that they will form the core of this thinking.

• Typical Vodafone subscribers spend €2 to €10 more each month once they get a smartphone.

• Vodafone is investing heavily in new billing platforms to address the challenges of pricing data tariffs.

• It intends to charge for data based on “time, speed, amount, family group and even by device” as these new billing platforms become available.

• Vodafone will step up its smartphone strategy to reach all segments of the market from low-end to high-end users.

• It’s been very encouraged by initial results of a Spanish trial of pricing data according to quality of service, and it intends to roll it out to more markets.

• It expects to focus much more heavily on data in emerging markets.

What struck me about all this talk of a new strategy was that it only focussed on network access and how to charge for it. Content, applications and services weren’t discussed. They may come in the announcements in the autumn, but there wasn’t even a hint of them in the results announcement. Indeed, Vodafone360 was not mentioned once.

The Vodafone 360 product has been hugely troubling for Vodafone. It’s desperately trying to get its flagship service to a mass market, but it’s being met with overwhelming indifference from a public that wants smartphones — just not Vodafone smartphones. It’s difficult to imagine people queuing up outside stores for the next Vodafone 360 device. And that’s the network operator’s challenge.

The mobile industry’s changed more in the past 18 months than the last 18 years. Just ask Nokia. Vodafone’s trying to find its place in this new world and I wonder if the new strategy will see it beginning to acknowledge that while it’s still a master of the operator universe, people are looking for much more than just a mobile network now.

I don’t see how Vodafone can meet these broader requirements — others do it much better. Vodafone live!, Vodafone 360 and other services have failed to take off in the way the operator had hoped. It may be time for Vodafone to think about being the best network operator it can be and providing the best returns for its shareholders by doing what it was always built to do.

Although this represents solid growth on an already healthy business, stock markets had been expecting more and Google’s share price fell in the wake of the results.

Google’s growth in the second quarter was driven by two main factors — continued strength in the trend toward digital advertising and growth in bigger campaigns, which Google is increasingly well positioned to serve thanks to its recent display advertising deal with Omnicom and the rise of advertising on YouTube. YouTube is becoming a must-have inclusion in a campaign, with high-profile FIFA World Cup campaigns from Coke, Nike, Visa, Sony and others.

The main countries called out for high performance were Brazil, India and Russia, though Google reiterated its view that (for Google at least) the recession is over and most areas are doing well.

Android sits in the 4 percent of revenue categorised as “Other” and as such faces two challenges.

The first of these is that it needs to grow somewhat faster than the two core businesses to have a significant impact. This is happening, though, and Google gave a few interesting figures:

• Android activations grew from 65,000 a day at the end of 1Q10 to 160,000 a day in late 2Q10.

• In Android Market, the number of apps has grown from 30,000 at the end of 1Q10 to 70,000.

• The volume of searches carried out on Android devices grew 300 percent in 1H10, which is broadly in line with the growth in shipments, according to our estimates.

Google is learning about the differences in mobile advertising. It has increased click-through rates by improving the format of mobile search ads. For example, adding a local address resulted in an 8 percent rise in click-throughs; adding a phone number meant a 6 percent increase. Improvements like this are seen as crucial to unlocking major revenue growth from mobile advertising.

Android’s second challenge is that AdSense covers various advertising channels, including mobile, and the data is not broken out. Google mentioned that AdSense for mobile is growing well, but declined to give the figures. Including mobile here means that it is very difficult to estimate the real financial impact of Google’s mobile activities.

Under questioning about what level of investment the firm is making in Android, Google made the rather chilling statement that “in terms of the company, the costs of Android are not material”, and admitted that it’s probably not investing enough.

However, it said that one of the key areas it is working on is a wider variety of billing options (currently Google Checkout and billing through T-Mobile USA are the only options on Android Market). We expect to see more partnerships with operators for operator billing, especially in countries where credit cards are not widespread. This will be very important as Google broadens out its range of services to include books and, potentially paid-for video, games and music.

Before the opening game I noticed that few mobile operators were making much noise about the tournament. Orange in the UK was offering free football shirts with selected Samsung devices. In some European countries Vodafone was offering a mixture of World Cup content, including video clips and live streaming of games. In Portugal it secured rights to broadcast all 64 matches. In Spain, it partnered with Digital+ to show all matches live on 3G mobile phones. And Vodafone Italia was offering a range of services through its Vodafone Calcio package.

These are some example promotions, but I’ve struggled to find many others. On this evidence, I think operators could have done much more. They seemed content to wait for a surge in calls, text messages and data traffic during the World Cup, rather than generating revenue in other areas such as content or advertising. Of course, the many phone owners signed up to flat-rate bundles probably wouldn’t have spent any more during the tournament.

In my view, mobile operators missed an open goal. They should have been using the event to offer and promote new services. Our survey of young adults in major European markets found sports sites were among the top five most popular mobile Internet destinations among men. And many operators have identified sports as a primary category that drives up usage of other services: in Orange’s April Digital Media Index, the operator said that Sky Sports 1 and 2 were the most accessed channels by its phone owners.

What I did see during the World Cup was a plethora of football-related apps in software stores. The success of applications from ESPN, ITV, the Daily Telegraph and others shows that people want to do more on their phones than talk and text. ESPN developed an app specifically for the World Cup that generated more than 2.5 million downloads. That’s really impressive, and the company claims that on average a million people accessed the app each day of the tournament. The Daily Telegraph’s application generated 100,000 downloads in its first week on Apple’s App Store.

A key lesson in this is that media companies are embracing mobile as part of multi-platform strategies. They’ve benefited hugely from the World Cup. Other companies — especially mobile network operators — should take note and prepare for the next major sporting event.

Although Google has said it’ll honour existing agreements, the acquisition raises many questions about the search giant’s intentions for serving the travel industry, about why it needed to acquire ITA rather than licence the technology (as others do), about how existing players will work with the new owner, and about whether the Federal Trade Commission will see a potential for linking Google’s advertising with flight search results as too much control.

But how does the deal fit into Google’s recently announced mantra of “mobile first” as the priority guiding developments? And what implications does this deal have for the mobile industry?

In our view, the mobile industry has a lot to offer the travel industry in terms of reaching people and providing relevant services at the point where they are most needed. In the short term we believe that Google’s acquisition of ITA will have little impact in the mobile field, but in the longer term we expect much more travel-related activity on phones — including flight bookings — and this is another area where Google will control a key resource.

At present, flight search and booking is best done on a PC because it’s a complicated task with many parameters in a search and, consequently, a fairly complex user interface. To illustrate this, Apple’s App Store contains many thousands of programs in the travel category, with only around 330 of them relating to flights and just 10 of these offering flight searches and booking. Interestingly, most of those 10 get poor ratings from users.

However, developers have shown that careful attention to interface design can give an experience on a mobile device that’s better than the alternatives. For example checking local cinema listings is quicker and easier on an iPhone than booting up a PC, loading the browser, searching and so on. I expect the ease of use for flight booking applications to improve strongly over the next couple of years.

As that happens, there’s no reason why people won’t use their phone for flight bookings. Kayak, one of the leading flight search providers, finds that iPhone apps already account for 5 percent of the searches it handles. It’s stepped up its investment in mobile and is now devoting a fifth of its development resources to this area.

Although flight search and booking on mobile devices may become mainstream and control fairly large sums of money, the opportunity for the mobile industry to work with the travel industry is much broader, with flight search as arguably one of the least interesting parts. The mobile industry plays to all the cool Internet trends that the travel industry could use. These include hyper-local information (for example, the iPhone app that informs people about delays at Baton Rouge Metropolitan Airport), users’ context (on holiday or travelling for business?), crowd-sourcing (for example, TripAdvisor) and newer technologies such as image search and augmented reality from the likes of Layar.

The main problem here, of course, is scale — how to do anything on a big enough scale that it becomes of use to large numbers of people. At present this is being addressed in two ways. The main way is that many developers provide applications serving local interests. There are thousands of these apps on, for example, the App Store. The second way is that larger providers are starting to form partnerships with the travel industry. For example, Nokia Maps contains information from Yellow Pages, Lonely Planet and Michelin Guides. Nokia has said publicly that it sees good opportunities in working with the travel industry. It has acquired Dopplr, a social travel site within the past year. Facebook has moved into this area too, recently acquiring social travel startup NextStop.

In my opinion, Google’s move to acquire ITA is motivated primarily by a desire to expand the PC Internet side of its business and put Google in a position to provide a joined-up and more comprehensive set of travel services, which could work well on mobile later. We should remember that Google has launched many initiatives that have subsequently come to very little. However, the $700 million price tag suggests this acquisition will be treated seriously in Mountain View. Other large mobile players, such as Nokia and Apple, should take it as a warning.

Now five years since the first mobile phone Walkman model, Sony Ericsson returns to the series after a brief absence from the market following the release of the W995 last year. This month it releases the Zylo and Spiro, two mid-tier phones in the sub-€100 range (below). The phones are sure to hit the prepaid market. But how has this market changed in the past 12 months, never mind the last five years?

From a technological point of view, MP3 playback has almost become a prerequisite for all mobile phones (excluding obvious low-end devices). Nokia’s 2690, released last month, is a classic example of a mobile phone that packs incredible punch — it supports MP3 and WMA music file formats and has a 3.5 mm audio jack — for an estimated operator cost of less than €50. (Walkman fans may recall that only the W995 featured a 3.5 mm jack, oddly enough).

In my opinion, when it comes to brand name and usability, the Walkman can still rise above the rest, even though other players offer the same music features. With the possible exception of Motorola’s old Rokr range, no other brand has such strong “music” presence in the prepaid market. Apple’s iPod music player on the iPhone caters to a different price range and Nokia’s Comes With Music hasn’t taken off quite as expected. Walkman has however built three decades of favourable brand history.

As for usability, Sony Ericsson has settled on putting physical music buttons (play, stop, forward and backward) on the front of the phone, along with the make- and end-call buttons, and a numeric keypad on a slider. This can be seen on the W205, W395, W595 and W995. Having owned the W595, I’m a fan of the slider-with-music-buttons design. When listening to music with the keypad closed, the device looks and feels like an MP3 Walkman, not a mobile phone. For me, this is important because it sets the device apart as a real music player, compared with anything else on the market (except perhaps Nokia’s X3).

But that’s not to say that physical form is everything. The W595 also features a side button that takes you straight to the last file played in the media library, whether it’s music, video or a podcast file. That’s much better than having to click numerous times through menus.

What’s more, while there’s no 3.5 mm audio jack, the W595 features excellent speakers at either end of device. These face outwards so the phone can lie on its back on a flat surface without being covered up, as opposed to various devices that annoyingly have speakers on the back of the phone.

Clearly the Zylo and Spiro have been inspired by earlier designs, and at first glance the new models look very similar to their predecessors. The big difference is that Sony Ericsson has now included social networking features that have become essential to many recent prepaid devices, (Samsung’s Corby series, for example). There’s also an emphasis on its support of FLAC format music files. As with the W995, Sony Ericsson has realised that music phones need a 3.5 mm audio jack.

If priced competitively at retail stores, both models have the potential to build on the Walkman brand and offer a different look to so many mid-tier prepaid phones that have jumped on the touch-screen bandwagon.

Personally, I want to see Sony Ericsson take on the high end of the prepaid market and follow the W995 with a qwerty variant — as long as it keeps the “look” of the Walkman. For that reason, I’m slightly unsure about the upcoming Yendo, Sony Ericsson’s next Walkman phone. It has a touch screen and resembles an X10 mini. Nevertheless, I’m looking forward to seeing what it’s like and what it means for the Sony Ericsson Walkman series.

At Mobile World Congress I was profoundly affected by the challenges facing older users and wrote about my experiences. Perhaps my expectations are too high, but I continue to be amazed by the fact that none of the major manufacturers has tried to enter this space. All the signs indicate tremendous market potential. The over-50s are the fastest-growing demographic in Europe and they’re also the wealthiest.

Networks operators should be paying attention to this segment too. Older people use fewer network resources and although they’re likely to be at the lower end of the ARPU scale, they’re fiercely loyal and typically choose devices that require considerably less subsidy than the latest and greatest high-end phones.

It’s a medical fact that to some degree everyone over 50 suffers from deteriorating eyesight and hearing (even if many are too proud to admit it). This inevitably means that using a mobile phone (which in many countries is almost considered a human right) becomes more challenging. On this basis, devices tailored to address these needs must be onto a winner.

An informal survey of the manufacturers represented at the event (Amplicom, Binatone, Doro, Emporia and Geemarc) suggests there’s a market of between 2.5 million to 3 million units in Europe alone in 2010 — and all for brands that lack the marketing and distribution muscle of the top 10 mobile phone manufacturers. The market is likely to be even bigger next year. Some might say that a couple of million units aren’t worth bothering about, but they’d have a meaningful impact on a company like Motorola or Sony Ericsson.

So what’s gone wrong? In fairness, some progress has been made. At least ageing users can now get attractive, well-designed phones such at the Emporia Elegance (right) or the Doro PhoneEasy range (below). Gone are the days of clunky phones with big buttons that verged on implying that users were not only old but stupid.

Maybe the economic downturn has made mainstream manufacturers averse to attacking this segment. Or perhaps they are worried that “senior phones” will dent their brand. Does Nokia want to be synonymous with providing the best phone for granny, when it’s struggling to regain the initiative in high-tier phones? Whatever the reason, I genuinely believe the opportunity’s a significant one, and now’s the time for the big manufacturers to start investing, because whoever gets it right could quickly dominate a lucrative new segment.

So I got a pleasant surprise as I listened to what he had to say at this event. Of course, he covered the usual topics, but I came away thinking that 3 has made such progress with its network over the past couple of years that it’s now in a position to take the fight more directly to its competitors, particularly among contract customers.

A few years ago 3’s management team placed a bet on offering the best 3G data network in the UK. Realising this vision hasn’t been an easy journey. It became clear that expanding 3’s infrastructure would not be viable. Creating cell sites in the UK is virtually impossible these days, with lobby groups pushing to block any new masts. For example, 3 has deployed fewer than 10 new sites within the M25 in four years.

The only solution was to do a deal with a competitor and embark on a shared-infrastructure programme. T-Mobile became 3’s network partner and, in Kevin’s own words, “it’s been hell” to overcome the technical and logistical hurdles, but the results speak for themselves.

In 2007, 3 had 7,500 cell sites in the UK. By October 2010, it’ll have 12,500 and it continues to have a long-term target of 15,000 sites. This sort of density means that not only can 3 provide much improved coverage, but it’s able to offer data capacity to content-hungry smartphone users who just can’t get enough bandwidth.

Of course, this is only one part of the jigsaw and 3 clearly understands the other pieces it needs to put in place. Having got its network up to scratch, it’s unveiled the highly competitive One Plan tariff as well as securing distribution of the latest iPhone and a host of other high-tier devices.

Put all this together and you’ve got the basis of a great offering. A robust network with capacity for growth, a punchy tariff with a giant bundle of voice minutes and text messages, a generous 1 GB data allowance that should cover the needs of 99 percent of smartphone users, and the right devices — most notably the iPhone — in the shop window. So what does 3 need to do now?

From my perspective it’s going to be all about the brand. The 3 network continues to suffer from the reputation it gained very early on. Growing pains mean that many former 3 customers have bitter memories of a patchy network, poor customer service and a limited range of devices. Bad experiences like this are not easily forgotten.

With all the pieces of the jigsaw in place, I think it’s time for Kevin and his team to reinvigorate the brand and ensure when customers on rival networks come to the end of their contracts they think about 3 as a viable alternative. If they can pull this off, 3 will go from being a disruptive challenger to a mainstream rival of the other UK mobile network operators.

That said, two questions I hear a lot are, “Why isn’t Android doing as well in Europe as the US?” and “When’s that going to change?” The fact is that if you compare Europe with the US, Android isn’t seeing anything like the same volume of sales. There are a few reasons for this, not least that the two regions are fundamentally different when it comes to smartphone ownership. Flagship Android devices in the US have also seen enormous marketing investment by manufacturers and carriers. Motorola’s Droid and HTC’s Droid Incredible on Verizon have seen great success going up against the iPhone, but that’s required massive promotional expenditure.

Ironically, Android has directly benefited from the iPhone in the US. Apple’s exclusive deal with AT&T means Verizon and other carriers have had to bet big on alternatives to avoid a subscriber exodus. In Europe the situation’s very different. Apple’s iconic device has been widely available for some time, so operators have less need to find alternatives. Nokia and Symbian may not even scratch the surface of the US market, but they’re a far bigger force in Europe, which means Android has a bigger challenge in overcoming them. Add to that the growing strength of RIM in Europe and the reality is that while smartphone penetration in Europe is lower than in the US, competition is arguably more intensive.

It seems to me that the situation in Europe is set to change, though. Android devices to date have been homogeneous, largely following the sub-four-inch touch-screen recipe. Android now spans a huge range of prices and is increasingly moving into the prepaid market with devices such as the Huawei-made Pulse and Pulse Mini for T-Mobile and the forthcoming Vodafone 845. But there’s been a distinct lack of devices offering something different, capable of catering to the classic feature-phone user and in the process really broadening Android’s appeal.

To my mind, three devices could change that and help take Android into a new and vastly larger segment of the market in Europe. Sony Ericsson is just starting to ship its big bets for 2010 in the X10 mini and X10 mini pro. Launched at Mobile World Congress in February, they seemed to polarise opinion by taking Android to a design far closer to a classic feature phone with a small 2.55-inch display. But that to me is the point. These products are designed to speak to the classic mid-tier Walkman customer of three years ago, not the small body of smartphone and gadget obsessives.

Motorola’s Flipout is trying to do the same thing. It’s a highly innovative and compact device with a 2.8-inch touch screen that swivels 180 degrees to reveal an extremely usable qwerty keyboard. It’s in stark contrast to any existing Android products and that’s undoubtedly its strength.

I’m not suggesting these products will do mammoth volumes in Europe, but channel response has been extremely positive and their positioning means they’re not competing with the segment of the market that’s becoming so hopelessly overcrowded. I firmly believe the industry needs to overcome preconceptions of what a “smartphone” is and who it’s for. A platform is just that — a platform. It’s the basis for innovation in products, applications and services and that can and will come in many different shapes and sizes.

At the recent ARE2010 show in Santa Clara, one of the leading players in augmented reality (AR), Total Immersion, pitched this logo in an attempt to help the AR community raise awareness among consumers.

Over the past years many of those involved in AR have spent a lot of time discussing what the technology actually is. Confusion arises because there are two main strands of AR. The first uses a device’s camera to track an object, identifies it and overlays information on the camera image. This is a form of “computer vision”, as the device can identify what it sees. Examples are shown on Total Immersion’s site. The second is the version normally found in mobile applications; data from the device’s GPS and compass are used to pull information from a Web database, which is then displayed on the camera image. A good example is Layar.

The use of “computer vision” AR has started to spread in marketing campaigns, with recent examples including BNP Paribas, Nike, Nissan, the Star Trek movie, and an advert for Coke Zero and the Avatar movie. Several location-based AR apps are seeing high numbers of downloads on iPhones and Android devices. The cameras and graphics processing in high-end phones have improved enough that the two strands of AR are starting to converge. There is a strong feeling in the AR industry that it is at a tipping point, from which it will see very rapid growth.

Our own mobile Internet user survey bears this out to some extent. When asking about future services people would like to see on their phone, we saw AR as the third-most popular response, after unlimited music and catch-up TV. Because of the confusion surrounding AR, we were careful to describe it as a service to “identify people and places by pointing your phone’s camera at them”.

If we are to see a period of strong growth for AR, Total Immersion is right to think that it would be good to raise awareness, develop a consistent understanding via a common logo and set expectations among suppliers, users and companies using it in their marketing. Texas Instruments is proposing that the AR industry adopt the logo as a standard to use in apps, as well as in other places where AR could be used, such as retail and digital signs.

I think the logo’s a good idea and will help spread the word among suppliers and consumers. But there’s a risk. At present there’s no collective group or trade body for AR suppliers, so the industry has no way of policing use of the logo. If the logo is at all successful, the industry will soon need to set up some minimum standards for how it’s used and to monitor its use.

That’s not a large or unusual risk. It’s just part of what’s needed as an industry starts to move into the mainstream. There will inevitably be other areas of AR that need collective attention, such as technical standards and licensing issues.