Ambient Insight Regional Report · The Device Makers and Telecoms Drive the Market ... to have 20%...

Ambient Insight

Regional Report

The Asia Market for Mobile Learning Products and Services: 2012-2017

Forecast and Analysis

Massive Demand for Mobile Learning Content Creates Lucrative Revenue Opportunities in Asia

“We Put Research into Practice”

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Quantitative Market Analysis by: Sam S. Adkins, Chief Research Officer

Published: March 2013

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Ambient Insight’s Asia Market for Mobile Learning: 2012-2017 Forecast and Analysis. Regional Edition

For more information about this research, email: [email protected] 2

Table of Contents

List of Tables ...................................................................... 3

List of Figures ..................................................................... 3

Abstract ............................................................................. 4

Primary Catalysts: New Delivery Channels, New Revenues .............. 5

Mobile Learning VAS Spreads Like Wildfire in Asia ........................ 6

The Device Makers and Telecoms Drive the Market ....................... 7

The Device Makers Pave the Way for Content Suppliers .............. 7

The Dumb Pipes are Actually Pretty Smart in Asia ...................... 8

Large-scale Adoption of Tablets and Personal Learning Devices ...... 9

The Leapfrog Effect: The Post-PC Learning Experience ................ 11

What You Will Find in This Report ............................................... 12

Who are the Buyers? .............................................................. 12

What Are They Buying? ........................................................... 13

Related Research ...................................................................... 14

2012-2017 Asia Forecast and Analysis ................................. 15

Demand-side Analysis ............................................................... 15

Australia ............................................................................. 16

Bangladesh ......................................................................... 18

Cambodia ........................................................................... 19

China (including Hong Kong and Macao) ................................. 20

India .................................................................................. 22

Indonesia ............................................................................ 24

Japan ................................................................................. 26

Laos ................................................................................... 27

Malaysia ............................................................................. 28

Mongolia ............................................................................. 30

Nepal ................................................................................. 32

New Zealand ....................................................................... 33

Pakistan ............................................................................. 34

The Philippines .................................................................... 36

Singapore ........................................................................... 38

South Korea ........................................................................ 39



Sri Lanka ............................................................................ 41

Taiwan ............................................................................... 42

Thailand ............................................................................. 43

Vietnam .............................................................................. 45

Supply-side Analysis .......................................................... 46

Index of Suppliers ............................................................. 48

List of Tables

Table 1 - 2012-2017 Revenue Forecasts for Mobile Learning by

Twenty Top Buying Countries in Asia (in $US Millions) .................... 15

Table 2 - 2012-2017 Asia Revenue Forecasts for Mobile

Learning by Five Product Types (in $US Millions) ............................ 47

List of Figures

Figure 1 - 2012-2017 Top Ten Mobile Learning Five-year Growth

Rates in Asia by Country ............................................................... 4

Figure 2 - Primary Catalysts Driving the 2012-2017 Mobile

Learning Market in Asia ................................................................. 5

Figure 3 - 2012-2017 Asia Mobile Learning Five-year Growth

Rates by Five Product Types ........................................................ 47



Abstract Asia will generate the highest revenues for Mobile Learning on the planet

throughout the forecast period. It has the third-highest growth rate at

21.2% (after Africa and Latin America.) Mobile Learning revenues in Asia

reached $2.6 billion in 2012 and will reach $6.8 billion by 2017.

Forecasts for twenty countries are included in this Asia report: Australia,

Bangladesh, Cambodia, China (including Hong Kong and Macao), India,

Indonesia, Japan, Laos, Malaysia, Mongolia, Nepal, New Zealand, Pakistan,

the Philippines, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, and

Vietnam.

In the 2012 market, Japan, South Korea, and China were the top buyers,

respectively. By 2017, China will be the top buyer followed by India and

Indonesia.

Malaysia has the highest growth rate in the region at a

breathtaking 57.5%, followed by Thailand and Vietnam at 56.0%

and 49.9%, respectively. Laos, Indonesia, Cambodia, and Mongolia all

have growth rates over 40%. Thirteen countries in Asia have Mobile

Learning growth rates above the combined aggregate growth rate of 21.2%

in the region.

Figure 1 - 2012-2017 Top Ten Mobile Learning Five-year Growth Rates in Asia by Country

It is interesting that countries like Cambodia, Laos, and Mongolia are now

vibrant Mobile Learning markets. As of the end of 2012, Cambodia ranked

This is a regional report for Asia. Regional reports are designed for suppliers that are competing (or plan to compete)

in specific regions.



number 19 in the top 20 fastest-growing economies in the world. Laos

came in at number eight. Mongolia is now the fastest growing

economy in the world.

Over 140 suppliers in specific countries in Asia are cited in this report. This

will help international suppliers identify local partners, distributors,

resellers, and potential merger and acquisition (M&A) targets.

Primary Catalysts: New Delivery Channels, New Revenues There are four major catalysts driving the adoption of Mobile Learning in

Asia. The primary catalyst in Asia is the explosion in Mobile Learning value-

added services (VAS) products that are now generating hundreds of

millions of new revenues each year for suppliers.

Figure 2 - Primary Catalysts Driving the 2012-2017 Mobile Learning Market in Asia

The second catalyst is the major investments being made by the device

makers and telecoms in the industry. They are major innovators in all the

countries analyzed in this report and in some countries, they are the only

major suppliers.



Another catalyst in the Asia Mobile Learning market is the large-scale

deployment of Internet-connected tablets in the academic segments and

the uptake of and personal learning devices in the consumer segments.

The fourth significant catalyst is the acceleration in the adoption of "smart"

mobile devices connected to wireless broadband. In many countries in Asia,

accessing the web on a smartphone is often a user's first Internet

experience, in what is often referred to as a Post-PC experience. In this

scenario, Mobile Learning is their primary learning technology and they

may never be exposed to other learning products.

Combined, these four catalysts have created a massive demand for Mobile

Learning content in Asia on a scale previously seen only in North America.

By as early as 2013, Asia will overtake North America as the top

buying region for Mobile Learning content.

Mobile Learning VAS Spreads Like Wildfire in Asia

Mobile Learning has spread like wildfire across Asia. The device makers and

telecom operators initially launched Mobile Learning VAS products in

developing economies in Asia in 2008 and are now expanding into the

developed economies.

Although the Mobile Learning VAS offerings in developing economies in Asia

have relatively low subscription prices, they have millions of customers.

Consequently, the revenues are quite high. Mobile Learning VAS products

are now used by over 200 million subscribers in Asia. Mobile Learning

VAS revenues will more than quadruple in Asia by 2017.

As of February 2013, Asia had 99 Mobile Learning VAS products, more than

any other region and 45% of all Mobile Learning VAS products on the

global market. Africa and Latin America have the next highest

concentrations.

In Asia, India had the most with 37 products on the market, followed by

China at eight, and South Korea and the Philippines with six each.

Bangladesh had five Mobile Learning VAS products and Japan had four.

There are Mobile Learning VAS products in New Zealand, Taiwan, Australia,

and Singapore. Clearly, Mobile Learning VAS is no longer isolated in

developing economies.

It should be noted that not all Mobile Learning VAS suppliers are device

makers or telecoms. Depending on the country and the business

relationship between the content supplier and the telecom, the telecoms

can take up to 80% of sales (particularly in India). Marketing a Mobile

Learning VAS without a telecom's brand is challenging, yet content

suppliers do not have to share royalties. There is a strong incentive for

content suppliers to bypass the telecoms.

All of the top telecoms in India have launched Mobile Learning VAS products in the last four years.

Combined, they have a potential customer base of over 500 million subscribers.



The Device Makers and Telecoms Drive the Market

The device makers and telecoms are now major competitors in the Asia

Mobile Learning market. They are making substantial investments in

product development and localized content distribution. They offer third-

party services and content suppliers significant revenue opportunities in

specific countries.

The Device Makers Pave the Way for Content Suppliers

Nokia, Samsung, Apple, LG, and Nintendo are important players in Asia's

Mobile Learning markets. Each contributes to the industry in different

ways. The one thing they have in common is that they are all distribution

channels for third party learning content suppliers.

Nokia has been promoting Mobile Learning in the region since the launch of

their Mobiledu product in China in 2007. Nokia's primary Mobile Learning

product is a Mobile Learning VAS product called Life Tools, which they

launched in India in 2009. In just three years after launch, Nokia's

Life Tools has 95 million subscribers, mostly in India, China, and

Indonesia.

Nokia Life Tools includes low-cost content from over a dozen third-party

educational publishers. The education content includes three sub-modules:

English language learning, general knowledge, and exam tips. In

September 2012, Nokia launched the latest version of Life Tools called

Nokia Life+ in the Philippines, Vietnam, Bangladesh, Malaysia, Pakistan,

and Singapore.

In February 2012, Samsung launched their Learning Hub store in South

Korea stocked with content for their tablet PC with, "6,000 free and paid

learning units in collaboration with some 30 domestic and foreign education

services companies." Samsung is targeting both schools and consumers.

As of February 2013, Samsung was piloting their new Smart School

Platform in schools in 24 countries. The most advanced projects include

schools in South Korea and in Australia. Their primary content partner is

US-based Houghton Mifflin Harcourt.

Samsung's Smart School Platform is part of the device maker's "big vision

for 2020," and includes tablets preloaded with third-party educational

content, and what they call a "mobile Learning Management System (m-

LMS)." Samsung executives have stated in the press that their goal was

to have 20% of the global academic Mobile Learning market by

2015.

Launched in 2007, Apple's iTunes U has content from over 1,200 higher

educational institutions from 30 countries across the globe. The content is

available in over 155 countries. In February 2013, Apple announced that

they had topped one billion iTunes U content downloads with 60% of the

traffic coming from outside the US.

Device makers and telecoms in Asia offer significant partnering opportunities for content and services suppliers.



Apple launched a dedicated mobile app for iTunes U in January 2012. As of

January 2013, Apple's iTunes U mobile app consistently ranked in the top-

five free educational apps in every country in Asia. The free learning

content in iTunes U has spread awareness about Mobile Learning in Asia

(and the world) and in many cases, it is a user's first exposure to learning

technology of any kind.

In February 2011, LG launched their EduTab tablet in South Korea

preloaded with over 100 third-party educational apps, dictionaries, and

assessments. The device is priced significantly lower than general-purpose

devices and LG stated in the press that they expected the device to be

"extremely popular."

Nintendo greatly expanded the buying demographic for mobile edugames

by encouraging developers to design games on a range of topics including

early childhood learning, language learning, yoga training, music, test

prep, cooking, general academic topics, and more recently, art instruction.

Nintendo single-handedly created the international market for the mobile

edugames called brain trainers. Nintendo has defined this new category of

games as "mental training."

The Dumb Pipes are Actually Pretty Smart in Asia

The telecoms, particularly in North America and Western Europe, have

been referred to as "dumb pipes" since their role in mobile content

distribution has been relegated to data transfer. In those regions, they

have not been particularly successful at competing in the mobile content

markets. Buyers are much more likely to purchase Mobile Learning content

in a device maker's app store rather than the telecom's app store.

This is not true in Asia where the telecoms are major players in the mobile

content markets in most countries in the region. They are the top Mobile

Learning competitors in several Asian countries.

The telecoms have a significant advantage in the developing economies as

they offer the only electronic payment gateway for over 1.6 billion people

across the planet.

Direct carrier billing is also convenient for consumers shopping in third-

party stores in developed economies. Google Play began connecting to

direct carrier billing in Japan in 2011.

In December 2012, Microsoft introduced direct carrier billing across

developed economies in Asia in their app store. In February 2013,

VimpelCom announced an alliance with Microsoft and Nokia to add carrier

billing for subscribers buying apps in the Windows Phone Store in

Cambodia, Laos, Bangladesh, and Pakistan.

Telecoms are often the largest Mobile Learning supplier in a country. NTT

Learning Systems is the largest supplier in Japan. Korea's SK Telecom

While the early enthusiasm for brain trainers has dimmed somewhat, they are still very popular, particularly in Asia.



dominates the South Korean PreK-12 market and has extensive long-term

contracts with the government to manage countrywide initiatives.

The telecoms partner with content providers and have become a

lucrative distribution channel for digital education content

publishers. Over 30 of these telecoms are identified in this report.

In developing economies, the telecoms are "first to market" in the

academic segments as they rollout Internet connectivity to the schools,

often under a government contract. Once in, they are the first point of

contact for academic learning technology buyers. They have the customer

relationship with the schools.

The telecoms have begun to roll out high-priced Mobile Learning VAS

products designed for developed economies. In July 2011, SK Telecom

launched their "T Smart Mobile Learning Platform" in South Korea. The

service offers "premium" high-quality content on tablets from the major

educational publishers in South Korea including Chungdahm Learning,

Daekyo, Visang, Chunjae Education, and SMEnglish. US-based Houghton

Mifflin Harcourt is SK Telekom's most recent educational content partner.

Large-scale Adoption of Tablets and Personal Learning

Devices

Large-scale national deployments of tablets in the academic segments

began in the developed economies several years ago and more recently in

developing economies. Personal learning devices (PLD) have been popular

in the developed economies in Asia for over a decade. The products are

now gaining traction in the less developed economies in Asia.

So far, the largest national deployments of tablets in Asia are in South

Korea, Thailand, Malaysia, and Singapore. India's Aakash project could be

considered a national effort since the federal government subsidizes the

educational tablets, even though the states buy the devices. Each of these

countries are deploying the tablets differently, usually starting the process

at specific grade levels. This report identifies those differences.

Smaller scale academic adoption of tablets at the state (or province) and

local level are occurring in eleven other countries analyzed in this report. It

is likely that tablets will be present in the PreK-12 and higher education

academic segments in all twenty countries by 2017.

It is quite common in Asia for general-purpose device makers to partner

with educational publishers and offer education bundles with digital content

preloaded on general-purpose tablets. So far, all of these are sold at the

state and local level. The device maker as the seller, markets the bundles

to the state education agencies and local schools. Acer and Samsung are

just two examples of device makers that provide these bundles in several

countries in Asia.

In October 2011, the Indian government launched the educational tablet called Aakash priced below $35.00. Aakash 2

launched in November 2012 with 3.5 million pre-orders.



Conversely, the publishers form partnerships with third-party device

makers and sell educational bundles with the publisher's brand. The

publisher is the seller. Vibal Publishing and Diwa Learning Systems in the

Philippines are good examples. Both work directly with Filipino provincial

education agencies and local schools. Pearson sells a branded education

tablet called the Pearson MX Touch tablet in India on third-party tablets.

The presence of national, state, and local tablet deployments is

essentially a vast new delivery channel for Mobile Learning content

suppliers. The deployments also represent significant revenue

opportunities for custom content development services suppliers as

the schools scramble to provision the devices with localized

content.

Personal learning devices (PLDs) are quite popular with consumers in Asia

who buy the devices for their preschool and primary school children. The

majority of PLDs in the current market are designed for young children.

Personal learning devices are dedicated tablets designed for education. The

devices are attractive to consumers (parents) and academic buyers

because they are:

Designed solely for education

Preloaded with vetted educational content

Priced significantly lower than general-purpose tablets

Since 2010, over 65 personal learning devices have come on the global

market. Of the 65 devices on the market at the end of 2012, 27 were

produced in Asia with 18 of those developed in India.

Personal learning devices are a new distribution channel for

educational publishers and packaged content suppliers. All of the

Asian personal learning device suppliers are identified in this

report.

A brand new trend is the entry of the Asian telecoms into the personal

learning device market. In May 2012, China Telecom launched their

personal learning device called Yi Zhi Yi Ben, designed for Chinese children

under 12. In November 2012, KDDI, Japan's second largest telecom,

invested $5 million in US-based Fuhu, a developer of personal learning

devices for young children. KDDI intends to market a Japanese version of

the device in 2013.

Asia is the only region in the world where telecoms sell inexpensive

"education editions" of smartphones preloaded with learning content,

effectively making them personal learning devices.

NTT DoCoMo in Japan is the latest telecom to do this launching their

Smartphone for Juniors device in January 2013. The phone comes

preloaded with an English-Japanese dictionary, eBook reader, and "an

education navigator app" called docomo-zemi.

Very few PLD suppliers develop their own digital content. Most of the personal learning device suppliers partner with third-party education publishers for content.



The Leapfrog Effect: The Post-PC Learning Experience

Large rural populations across Asia are now avid users of Mobile Learning

technology, while very few have experienced Self-paced eLearning on a PC.

In developing economies, PC penetration is often low, yet mobile

subscriptions are quite high. Mobile Learning suppliers are targeting the

mobile device as the delivery platform of choice in those economies.

As of 2012, buyers in Indonesia are already spending more on Mobile

Learning than they are spending on Self-paced eLearning. By 2017, ten

countries in Asia will be spending more on Mobile Learning than on

eLearning: India, Laos, Nepal, Malaysia, Indonesia, Cambodia, Pakistan,

Bangladesh, Sri Lanka, and Thailand.

In the developed economies, Mobile Learning is often seen as a disruptive

learning technology, particularly in the consumer and academic segments.

It is ostensibly disrupting the legacy PC-based eLearning industry. This is

referred to as "product substitution" in market research.

Buyers in Asia are not substituting Mobile Learning for eLearning,

they are leapfrogging eLearning altogether.

Fourteen of the twenty countries analyzed in this report had mobile

penetration rates over 100% by the end of 2012. This trend is not isolated

to the developed countries.

Vietnam had the highest mobile penetration rate in Asia at 155%, on par

with Singapore, which had a 152% adoption rate. By the end of 2012,

Laos, Cambodia, and Mongolia had mobile penetration rates well above

100%. By the end of 2012, Cambodia had a higher mobile penetration rate

than Japan, South Korea, New Zealand, or Taiwan.

The China Internet Network Information Center (CINNIC) is a government

Internet administration agency in China. According to CINNIC, 195 million

people in China use their phones to access Mobile Learning content on a

monthly basis.

Smartphone adoption rates are booming and wireless broadband is

available in every country analyzed in this report. By the end of 2012, over

50% of all phones sold in the Philippines were smartphones. Over 70% of

the phones sold in China in 2012 were smartphones. In February 2013, the

Chinese Ministry of Industry and Information Technology (MIIT) reported

that China will have over 100 million 3G users by the end of 2013.

Device makers are flooding the markets in developing countries with

inexpensive smartphones. 4G networks are rolling out across Asia. As of

December 2012, half of the twenty countries analyzed in this report had

operational 4G networks. In sixteen of the twenty countries analyzed

in this report, mobile Internet access rates are higher than PC

access.

This leapfrog effect is not limited to PCs. Users are also leapfrogging

feature phones. At the Mobile World Congress in February 2013, Bharti

As Nokia executives are wont to say about the adoption of smartphones in developing economies, "the smartphone is the

laptop."



Airtel's CEO said in his keynote that "emerging market consumers were

ready to leapfrog basic phone models and go straight for smartphones.

People in the developing world are going straight to the mobile Internet."

Over 93% (5.3 million) of Internet users in Nepal access the web

exclusively via mobile devices. Accessing the Internet is

quintessentially a mobile experience in Nepal.

What You Will Find in This Report There are two sections in this report: a demand-side analysis and a supply-

side analysis. Additionally, there is an index of suppliers competing in the

region.

The demand-side analysis provides suppliers with insight into the

complexity of buying behaviors in twenty countries in Asia. The revenue

forecasts for five Mobile Learning products are included in the supply-side

section.

Who are the Buyers?

The two major Mobile Learning buyers in Asia are consumers and academic

institutions. With minor exceptions, it is relatively difficult to sell directly to

consumers. Content suppliers have to work with telecoms, device makers,

and app store providers to reach consumers in most countries in Asia.

Mobile Learning content suppliers are beginning to bypass the telecoms,

device makers, and app store providers. Mobile Learning VAS only requires

an SMS server; several suppliers are marketing directly to consumers,

particularly in India, Mongolia, and Nepal. In Cambodia, packaged content

is usually purchased at physical retail outlets.

Finding the academic buyer in many countries in Asia can be daunting, as

many supply chains are comprised of government agencies, universities,

private schools, domestic companies, international companies, trans-

regional consortiums, NGOs, and foreign government funding agencies.

Often the foreign entities operating in these supply chains are the actual

buyers of Mobile Learning products and services. They then in turn donate

or resell those products at highly subsidized prices. This report describes

those supply chains and identifies the real buyers in each of the 20

countries analyzed in this report.

Many countries have centralized educational systems run by government

agencies and they are the primary buyers of academic content. This report

identifies the countries with state-run centralized education ministries that

buy learning technology products directly from suppliers. It also identifies

the major suppliers doing business with the education ministries. Both offer

points of entry for suppliers trying to enter those markets.



Corporations and government agencies are the top buyers of custom

content development services in Asia. Device makers and telecoms pay

suppliers to repurpose content for mobile devices and Mobile Learning VAS

products.

International educational publishers often hire domestic third parties to

develop their localized Mobile Learning content. Government agencies pay

suppliers to create their citizen education and tourism apps.

What Are They Buying?

This report identifies the revenue opportunities across the region for five

product types. The supply-side section provides revenue forecasts for five

types of Mobile Learning products and services including:

Packaged content

Value added services

Custom content development services

Authoring tools and platforms

Personal learning devices

In 2012, Asia was the top buying region in the world for four of these five

Mobile Learning product types; North America still accounted for the

highest packaged content sales. By 2017, Asia will account for the highest

revenues for all five product types.

The Mobile Learning product type that generated the highest revenues in

2012 in Asia was personal learning devices, followed by packaged content.

This will change over the forecast period and by 2017, Mobile Learning VAS

will generate the highest revenues.

The type of content included in packaged content and in Mobile Learning

VAS products is different in each country. This report identifies the top-

selling mobile educational content in each country.

In 2012, none of the five product types generated over a billion dollars in

Asia. By 2017, four out of five of the product types will generate over a

billion dollars.

Mobile Learning VAS is not ubiquitous across Asia. Five of the twenty

countries analyzed in this report do not have Mobile Learning VAS products

yet. This report identifies these new markets for Mobile Learning VAS

suppliers.

Targeting specific buyers in particular countries with particular product

types is the key to generating revenues in Asia. Ambient Insight provides a

detailed description of our product types and buyer segments in Ambient

Insight’s 2013 Learning Technology Research Taxonomy.

All of the eLearning product types have positive compound annual growth rates in Asia.

The demand for packaged content and customized content for Mobile Learning VAS is driving the sales of tools and platforms. New tools and platforms continue to come on the market at a rapid rate.

http://www.ambientinsight.com/Resources/Documents/AmbientInsight_Learning_Technology_Taxonomy.pdf




Related Research Buyers of this report may also benefit by the following Ambient Insight

market research:

The Asia Market for Self-paced eLearning Products and Services: 2011-

2016 Forecast and Analysis (Regional Report)

The Asia Market for Digital English Language Learning Products and

Services: 2011-2016 Forecast and Analysis (Regional Report)

The Worldwide Mobile Location-based Learning Market: 2011-2016

Forecast and Analysis

Ambient Insight’s 2013 Learning Technology Research Taxonomy

“We Put Research into Practice”

www.ambientinsight.com

http://www.ambientinsight.com/Reports/eLearning.aspx

http://www.ambientinsight.com/Reports/eLearning.aspx

http://www.ambientinsight.com/Reports/DigitalEnglish.aspx

http://www.ambientinsight.com/Reports/DigitalEnglish.aspx

http://www.ambientinsight.com/Reports/MobileLearning.aspx

http://www.ambientinsight.com/Reports/MobileLearning.aspx




Ambient Insight Regional Report · The Device Makers and Telecoms Drive the Market ... to have 20%...

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