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Introduction

Value Chain: represent industries in terms ofsequensces of value adding activities.

Value Network: involve a larger number offirms, a more complex set of relationshipsbetween them, and agreements on a greaternumber of interface standards than do valuechains.Mobile Phone Industry can be better

represented at a value network than a valuechain.

Critical mass : a sufficient number of adoptersof an innovation in a social system so that therate of adoption becomes self-sustaining and

creates further growth.

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Rules in the value network3

Burt Rent:

Individuals, firms, or even industries that have non-redundantties with other entities who are not connected to others in thenetwork are in powerful brokerage positions called structuralholes.

Firms that are positioned in structural holes are more powerfulbecause they arbitrate the information flows between groupingsof firms who have dense ties among themselves, but loose tieswith each other.

Networks have a hierarchical structure

Coleman rent: Stressed that dense ties among firms result in a resolution

to collective action problems.

Coordination is improved through repeated exchange amongstable members to the group.

This network tends to beflatter

.


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Objective

Interfaces between mobile phone andother Industries

Agreements

Result product and servicesCapabilities

External network require it for existenceCritical Mass

of User

Build from previously critical mass ofuser

Critical Massof User for

New Interface

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Why in Japan?

Growthoccurred

more inJapan

RevenueSharing

with contentproviders

Agreementson

Standards

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Methodology

Gathered data and tested and revised theories on theemergence of a value network in the mobile phoneindustry.

The initial research focused on successful content and

applications and the reasons for their success. Investigating the technologies and interface standards

that are required for new content and applicationsbegan to emerge from the interviews and published

data. Applied the concepts of critical mass, the interaction

between markets and products, and value networks tothe emergence and evolution of these interfacestandards.

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Old Value Chain For The

Mobile Phone Industry7


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Emerging Value Network For The

Mobile Industry8


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Entertainment9

Screen Saversand ringing

tones as keyroles.

NTT DoCoMo fillstructural hole.

KDDI andSofbank enter

the competition.

Technologicalchange lead therules change.


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Value Network : Entertainment10


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esu o merg ng er caDisintergration in Mobile Phone

Industry11

99-01

Work withNTTDoCoMo

01-

Work with allthree majoroperator

02-

Work withthe firmsthat providebestinformation


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General Internet Sites12

Enabling connectionbetween mobile phonesand a larger number of

industries.

NTT DoCoMo fillstructural hole.

Critical mass of users dependon :

A different set of interfacestandards

Technological changelead interface standard

change.


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Value Network : General Internet

Sites


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Result of Technological change

lead interface standard change14


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Publishing

Enabling connectionbetween mobile

phones andpublishing industries.

Denso and Color Zip

fill structural hole.

Critical mass ofusers:

- 2D bar codes user

- Mobile sites

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Value Network : Publishing16


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Location-Based Services


phones and PhysicalLocation of Firms

KDDIs GPS serviceand the services from

map providers


Critical mass of users:

- GPS & Maps user

- Mobile sites

- 2D bar code user

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Value Network : Location Based

Services18


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Retail & Ticketing Systems


phones and POS &Ticketing Firms

Wallet Phone


Critical mass of users:- Train/commuter user

- Convenience storecustomer

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Value Network : Retail &

Ticketing Systems20


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Broadcasting

Enabling connectionbetween Firms in the

Internet &Broadcasting

industries

Broadcasters andTechnology/interface

providersfill structural hole.

Critical mass ofusers:

- Mobile sites

- User behaviour

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Value Network:

Broadcasting22


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Discussion

With addition ofinternet compatibility and

other function, the structure of the mobile

phone industry is gradually changing to a

value network in which firms from a broad setof industries are interacting in the supply of a

broad range of mobile Internet-related

services.

Includes many operators, phone

manufacturers, providers of the technologies

that constitute an interface standard, and

content providers.

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Implications

1

Value networks involve a larger number of firmsand a more complex set of relationships betweenthem

2

The change from a value chain to a value network has

important strategic implications for firms in the mobilephone industry network effects, critical mass of user, managing multi-sidedplatform

3

The change from value chains to value networks makes

the issue of critical mass much more complex Japanese mobile Internet markets growth => critical mass of users inentertainment content & e-mail/mobile sites.

new value networks build from old ones and a critical mass of users fora new interface standard partly builds from previously created criticalmasses of users

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Implications25

4

The resulting products and services for the new interface standardsthat connect the mobile phone and other industries often reflect theproducts and services that were used in the other industries andthe technological capability of phones.

how new value networks may emerge.

5

The current methods of measuring progress in the mobile phoneindustry are completely inadequate.

not only from data revenues

what is not happening but could happen in the mobile phone industry

6 Interface standards play a key role in these value networks andmany of them are highly interdependent.

7 Building from the other implications, policy makers need to set the

right rules in the related issues.


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Thank You26


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The emergence ofthe mobile Internetin Japan and theUK:

Platforms, exchange models, and innovation 19992011

Patrik Krrberg27

Value Network - Phone Industry

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