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December 13th, 2013

What is the leading mobile market in the world?

Before reading this blog have a think about what you think the answer is? Japan, South Korea, US, UK, Finland or maybe Sweden?

Travelling and working around the globe we frequently get asked what the most advanced market is, where we get our inspiration from and where we see things going in the future. When we started DMI in Sweden in May 2005 the answer was simple. Japan was without a doubt the most advanced market in the world followed by Sweden. Nowadays it’s not as simple.

Here’s a quick review of the most advanced markets and one suggested winner:

Japan was the first market in the world to truly adopt mobile Internet with Doccomo’s iMode services. In 2004 they already had close to 80% mobile internet usage for messaging, gaming, content consumption, dating and more. It was the inspiration for Vodafone live!, Orange World and of course the international roll-out of iMode. Japan was first with mobile payments, near field communication (NFC), photo messaging, daily use of. QR codes, gyroscope enabled phones, mobile TV and more.

The challenge with Japan is that most of the technology that has been successful in Japan didn’t work anywhere else. When was the last time you heard of a Panasonic or Sharp phone? The theory was that this was also the case the other way around until Apple took Japan by storm with the Softbank iPhone launch in 2008.

Today Japan is still one of the top markets in the world for mobile innovation but no longer a given leader.

(Disclosure: the author was born in Sweden)

The mobile phone was invented in Sweden in collaboration between Ericsson and Televerket (the local carrier at the time) and since then Sweden has been a leading telecom company. Ericsson has been the biggest mobile network equipment provider in the world for the past 20 years. Thanks to this a myriad of other successful telco companies have come out of Sweden creating an eco-system that fuels further innovation.

In 2005 Sweden was probably the most advanced country in terms of mobile usage and innovation in the western hemisphere. Fast 3G networks, high penetration of feature phones and the smartphones of the day (Symbian and Sony-Ericsson Mobile IQ), several leading international content providers and Sony-Ericsson was the 3rd largest handset manufacturer in the world.

Today Sony has taken over Sony-Ericsson and is slowly exiting Sweden and the market is dominated by foreign handset manufacturers (Apple and Samsung) and services (Google and Apple). Ericsson is still the leading telco service provider in the world but Huawei is closing in quickly. Sweden can still be a great test market for new services such as Spotify and Skype but most other services are local copy cats.

For a period of time Finland and Nokia was unbeatable. In 2005 Nokia had 40% of the global mobile device market share (in some countries as high as 80%) and Finland was seen as a testbed for new technology, user experience and design and mobility services. Symbian was the first smartphone operating system and Nokia was first to successfully launch almost every new mobile innovation outside of Japan including fashion phones, multi-tasking, app store, GPS and touch screens.

Today the Nokia handset business has been acquired by Microsoft with Windows Phone as the primary operating system and there is little remaining in terms of leadership and innovation other than the 40 mega pixel smartphone launched by Nokia this year and of course the Angry Bird mobile game series. Simply put, Finland has lost its leadership position.

South Korea
For many years South Korea was in a similar position to Japan in terms of leading local technology and innovation but struggling to bring the technology outside of South Korea. South Korea was a pioneer in mobile music, TV, gaming and more. To distribute their handsets outside of South Korea LG and Samsung went to the leading device manufacturers in the US and Europe and customised the devices for them. This turned out to be a successful approach as it meant that someone else provided the requirements for them.

With the launch of Android OS Samsung took the opportunity to go its own way and bypass the operator requirements and since then they have just gone from strength to strength and today they are the undisputed leaders today next to Apple.

So what

United Kingdom
The worlds largest mobile operator by revenue was Vodafone Group in the UK until they sold Verizon about 6 months ago. Operating in 24+ countries with global technology and marketing teams in London combined with some of the highest handset subsidies in the world made the UK a top mobile market. This helped Vodafone live!, Shazam and other international mobile services companies grow internationally.

Since then little in terms of innovation has come out of the UK. It’s still got one of the highest smartphone penetrations in Europe and it’s an important entry market to the rest of Europe but no longer a leadership role.

United States
7 years ago Americans went to Europe to study mobile innovation, usage and services. They looked with jealousy at was going while Motorola kept on producing fairly basic flip-phones. Sure, Motorola, Lucent, Microsoft and Qualcomm were all based here but all had comfortable positions without any real challengers.

Then Apple changed it all by launching the iPhone in 2007. At first it was just the Apple fan boys that caught on but with the second generation iPhone and appstore launch in 2008 it was suddenly clear that there was a challenger to the existing players. By 2009 Google had thrown their weight into the game with the launch of Android together with Motorola and the rest is history.

Today Apple and Google totally dominate the smartphone OS market followed by Microsoft as distant nr 3. Leading e-mail services and cloud services are provided by US companies such as Google, Microsoft, Yahoo, Dropbox and Box and social network and messaging services by Facebook, Twitter, Linkedin, Google, Whatsapp, Snapshat and Microsoft (Skype). The US totally dominates the mobile market eco-system and innovation to the extent that most startups are advised to move to Silicon Valley if they want to make it globally.

So what is the leading mobile market today? The answer is pretty obvious by now. In the past 5 years the US has taken over the leadership position and the gap to the rest of the world keeps growing.

Finally we also think it’s important to acknowledge innovation and leadership from markets such as Kenya with mobile payments and China in terms of low-end smartphones from Huawei, ZTE and Lenovo and making mobile network equipment more and more of a commodity.


Tags: enterprise mobility insights mobility markets

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