The end of the European i-mode alliance?

Thomas Husson | July 23, 2007, 09:56 AM

I just came back from a week break and read my e-mails to discover that o2 won't release any further i-mode handsets from July but will continue to support existing phones.

I recently posted a skeptical comment on i-mode in Europe but was surprised to discover that other analysts explain this by the i-mode business model, saying operators need a larger chunk of the revenues. That's really strange because the tremendous success of i-mode in Japan was due to the i-mode ecosystem (relationships between DoCoMo and its handset suppliers) and business model.

Anyway, the reason it didn't work in Europe is that the range of i-mode handsets was way too small (not having Nokia on board was a strong inhibitor from the beginning). To negotiate with handset manufacturers, you need scale and scope. Telefonica was the only major European operator to use i-mode but they never embraced the i-mode brand and business model, so it was impossible to order handsets in volumes. Even, Bouygues Telecom, which has been successful with its i-mode solution, is now reaching a plateau and will face the same challenge in the coming months. It will have to catch-up on WAP (with many unconfigured devices sold in the last few years) until the real mobile Internet is there. At least O2 active has been preforming quite well until recently, which was precisely why the decision to launch i-mode 2 years ago was badly perceived internally.