2009
International Marketing
Assignment 4- Android Mobile OS
Annabell Lee Satterfield (2013718)
Cornell University
4/28/09

This marketing plan will delineate the international expansion plan for the world’s first Google-Android
OS-based smart phone. First, this paper will define the product and its potential adaptations (more
detailed analysis in Appendix 1). Then, this paper will discuss the quantitative model used to determine
global markets for expansion and to rank them according to their market potential (more detailed
analysis in Appendix 2). Finally, two of these markets, Korea and the United Kingdom, are described in
some detail (more detailed analysis in Appendix 3) and a marketing plan is defined for these markets.
Part 1- Product Definition and Adaptation: Summary
Android is Google’s operating system for “smart” mobile phones, defined as a mobile phone
with PC-like functionality. Android has several global competitors in the smartphone OS category:
Symbian, iOS/iPhone, RIM/Blackberry and Windows Mobile (See Exhibit 1: Mobile OS Worldwide
Market Shares). The Mac OS/iOS phone is the
most similar in target customer, interface, Exhibit 1: Mobile OS
and capability to the Android G1- the first Worldwide Market Shares
phone released with the Android OS.
The Android is expected to become 15%
16% Symbian
a worldwide leader in mobile phone
50% MAC OS/iOS
operating systems. It can be carried on 19% RIM/Blackberry
multiple cellular networks and used in Windows Mobile
phones built by the most popular Source: Fortune Magazine; http://apple20.blogs.fortune.cnn.com/category/market-share/ November 7, 2008
manufacturers. However, there are three
limitations to its ability to expand to the mass market internationally: its business model depends on
advertising and its market is therefore limited to regions attractive to advertisers, the distribution model
requires that the G1 be made available for sale where most consumers purchase handsets: retail stores.
Finally, Android’s potential is limited by its target customer; the target customer could be defined as
those that would purchase a “smart phone”—higher-income, educated consumers with interest in
technology as well as productivity or entertainment applications. Also, because Android, like iOS,
has yet to be accepted by industry as a business productivity tool, Android target customers are not
business users. They are likely to buy this phone for his or her own personal use (the primary target
customer is a retail consumer). More detail about this target customer can be found in Appendix 2.

Android’s competitive advantage is Google’s well-known brand 1 and technical expertise, and
Android’s open source capability and easy-to-use Java programming language that makes it markedly
more adaptable than other devices. For example, while the system’s default language is English, users or
phone vendors can go online and load their language into the system. Adaptations for regional dialects
or uncommon languages can be made available for download by independent developers. Applications
designed to meet the needs of local populations can be created by local developers and installed-- easily
creating a unobstructed, fast pipeline for applications.
Part 2- Quantitative Market Analysis
A quantitative model was used to determine which markets to enter. It contained the following
variables: population, GDP per capita, and number of internet users per capita. Population was chosen
to explain market size because, as a consumer product, the Android phone could be purchased by
anyone. I used GDP Per Capita because smartphones like Android phones are purchased primarily by
users in wealthy nations. The variable ‘number of internet users per capita’ is helpful in explaining the
likelihood to purchase because it represents a nation’s interest in technology. This variable also
correlates with a country’s supporting infrastructure.
I screened potential markets with the following minimum requirements: minimum population
of 20,000,000, minimum GDP per capita of $3,000, internet usage per capita of .42 I chose a minimum
population of 20,000,000 because this is a product that is not widely used and therefore requires a large
market base to sell to. A Minimum GDP per capita of $3,000/yr would allow Android to be marketed to
the top 23% of earners in the world. Finally, the median internet usage rate of the final list of populous
and wealthy nations is .42, so I chose this as the screening minimum for the final screening.
After the final screening, I was left with this list of countries: Canada, South Korea, United
States, Japan, United Kingdom, Taiwan, Malaysia, Italy, Romania, Australia, Germany, France, Spain and
Poland. Finally, in order to rank these countries from the most suitable to the least suitable, I weighted
the variables by their contribution to overall market demand for the product: market size: 3, wealth: 4,
likelihood of purchase: 2
I included (and subsequently eliminated in the screening process) Brazil, Russia, India and China but
added the two larger countries-- India and China-- back to the final list because their large populations
and their wealth disparities could house a sizeable niche of individuals wealthy and educated enough to
create sizeable demand for an Android smartphone. The final 10 countries recommended for further
1
Google is the most powerful brand in the world, according to Millward Brown- BrandZ Top 100 2008 Report

analysis are (in random order): South Korea, United States, Japan, United Kingdom, China, India, Canada,
Taiwan, Malaysia and Italy.
Part 3- Market Analysis of Korea and the United Kingdom
KOREA
Smartphone phone users in Korea can be divided into two segments: corporate consumers and
retail consumers. Corporate consumers place greater emphasis on productivity-enhancing applications
and security. Retail consumers (Android’s primary target) in Korea demand a bundle of attributes
including design, price, and function and popularity of the phone. Both retail and corporate consumers
demand standard Korean language features like Korean language input and display.
Consumer sophistication in Korea is high and the market is very trend-based where new phones
are introduced frequently, often advertised with celebrity endorsements and new designs (colors, etc.).
Service providers and handset manufacturers spend heavily on marketing to create a buzz for new
phones and service offerings. Outspending local firms in a race for top-of mind position in Korea where
local brands are already entrenched would be very difficult and costly.
Korean consumers choose their phones and service as a bundle; price is a factor, but more
important is design, applications like games, and popularity. Mobile phones have become an important
part of everyday life in Korea and are far more integrated into day-to-day activities than people in most
other countries. Koreans use their phones to make payments, watch television, play games and more.
New applications and games are always in demand by consumers.
Handset price is not as important is because service providers provide handset
subsidies in exchange for contracts. There is a worldwide trend in mobile phones today-- consumers
are demanding specific phones and operating systems (i.e. iPhone, blackberry) from service providers,
but this is not the case in Korea where there are not many significant differences in functionality (90% of
smartphones use Microsoft OS, 80% of handsets are manufactured by two companies- LG and Samsung.
77.3% of all mobile phones are serviced by SK Telecom (50% of the market) and KTF (27.3% of the
market).
In sharp contrast to the service offerings, the distribution system for mobile phones is
fragmented; phone/service bundles can be purchased in many locations including department stores,
service provider stores, and temporary street promotion booths.
Changes in the industry include the lowering of barriers to entry to foreign operating systems;
on April 1, 2009 Korea stopped requiring that mobile phones in Korea contain middleware in compliance

with its own standard, WIPI (Wireless Internet Platform for Interoperability). It can be predicted that
these regulatory changes will make Korea’s smartphone OS market more competitive and fragmented;
Apple, HTC, and Nokia have announced plans for new smartphones to be released in Korea this year. SK
Telecom has recently introduced a Blackberry phone 2 that is targeted primarily at business
consumers.
UNITED KINGDOM
Mobile phones users in the UK can be divided into two segments: corporate consumers and
retail consumers. As stated in the detailed analysis in Appendix 1, suspicions regarding security due to
the SaaS model used by the Android system compels Google to focus on retail consumers as its primary
target at this time. Retail consumers demand a bundle of attributes including design, price, and
functionality.
The UK mobile phone market is well-saturated. There are 74 million mobile phone subscribers in
in a population of 60 million. The smartphone market in the UK is large, contributing to sales of 470,000,000
pounds in 2008.
The typical phone purchase transaction in the UK proceeds as follows: (1) the consumer
determines a monthly budget for mobile phone service and selects a service plan accordingly. (2) The
consumer chooses a handset that fits the predetermined budget (price) based on design and
functionality (more so design) as well as brand attractiveness. Increasingly, customers are purchasing
branded packages; as mobile phones are increasingly becoming commoditized, branding is becoming
more important to the profitability of firms-
they are increasingly bundling phones and
Exhibit 2: UK Mobile Phone
service contracts into branded packages like
Distribution
T-mobile package called “Life’s for Sharing”
Specialty Mobile Phone
and Nokia’s “Comes with Music.” 12% Stores
10% Department/Electronics
The UK mobile phone distribution
Stores
system is fragmented, divided between 16% Supermarkets
62%
specialty mobile phone stores,
Internet/Telephone/Mail
department/electronics stores, and Order
supermarkets (See Exhibit 2: UK Mobile Phone Source: “Distribution,” Mobile Phones and Network Providers – UK, November 2008
Distribution).
2
“SK Telecom and RIM introduces the Blackberry solution in Korea,” ENP Newswire, December 16, 2009

Mobile phone application usage in the UK is high—most British phone owners report using most
of the features available on their phones. This may be correlated with the UK’s well-developed mobile
phone infrastructure; 90% of the country is covered by high speed 3-G networks. Smartphones are used
heavily for regular emailing (77% of smartphone users), GPS positioning (40%), and instant messaging
(38%). 3 A large number of UK consumers, 1 million, now use mobile banking services. 4
Market-shifting trends are beginning in the mobile phone industry. Smartphone sales are
rising. This is due in part to planned upgrades of current mobile phones. According to Computer
Weekly, 25% of Brits say that their next phone will be a smartphone. 5 Particular smartphone/OS brands
like the Apple iPhone (iOS) have drawn market share power from the service provider to the
handset manufacturer and the consumer. Consumers are increasingly demanding particular phones
(and operating systems) from their service provider 6—and gradually moving away from their traditional
purchasing decisions model.
The UK mobile phone service market is competitive and fragmented between 02 (25% of the
market), Orange (21.3%), Vodaphone (22.1%), and T-Mobile (17.2%). Google’s Android OS’s
competitors in the UK are as varied as the handset manufactures-- and include Symbian OS, Apple’s OS
(iPhone), RIM’s Blackberry OS, Windows Mobile OS, and Linux OS.
Advertising spend in the mobile handsets and networks sector has been dropping steadily since
the end of 2006; service providers are branding phone/subscription packages and advertising them in
innovative ways. T-mobile’s “Life’s for Sharing” package and campaign includes integrated marketing
techniques like the hiring of performance artists and training of T-mobile employees to “unexpectedly”
dance in London’s Liverpool Station. Advertisers in the United Kingdom do not use celebrities as often
as Japan, Korea and China (where over 20% of ads feature celebrities). 7 Research firm Millward Brown
has determined that this is due to differences in effectiveness for celebrity endorsements.
Part 4- Marketing Plan for Korea and United Kingdom
KOREA
3
“Smartphone sales are keeping the flagging UK mobile market afload, shielding it…,” Computer Weekly, April 21,
2009
4
“Monolink aligns with the growth of smartphones,” M2 Presswire, February 6, 2009
5
“Smartphone sales are keeping the flagging UK mobile market afload, shielding it…,” Computer Weekly, April 21,
2009
6
Ibid
7
http://www.millwardbrown.com/Sites/MillwardBrown/Media/Pdfs/en/KnowledgePoints/358D2249.pdf

The Sell or License Decision
Android should enter the Korean market itself rather than through licensing. The product, the
operating system, has already been manufactured and can be adapted for the Korean market at a low
cost (R&D). The Korean mobile phone user is sophisticated and accustomed to making online
purchases—the advertising model can be applied to generate profit for Google. Another reason why
Google should enter this recently-opened 8 market is to prevent its major competitor, the iOS
from gaining an unshakable competitive advantage. Third, becoming a part of the cutting-edge Korean
mobile phone/application market will allow it to gain valuable expertise on cutting edge applications,
social networks and mobile video games—knowledge that it can apply in other international markets.
Pricing
Mobile operating systems like Microsoft OS typically create revenue by charging a flat royalty
fee to handset manufacturers. Android, however, charges no royalty and instead generates revenue
through mobile advertising. This pricing decision gives it a very competitive position in comparison to
Microsoft (90% market share of the Korean smartphone market), which charges a $25 licensing fee per
9
handset for what is known critically as “…a clunky, antiquated menu-driven operating system” Google
does not have strong brand power in Korea— Naver is the number one search engine brand with 70% all
search queries. 10 However, Android offers a strong product with an intuitive interface and exciting new
applications (like instant lookup of online store prices on products with the scanning of a UPC code,
etc.). Charging some royalty fee, while against Google’s current worldwide policy, is possible.
Possible competitive reactions are the reduction or elimination of royalty fees by Microsoft or
Apple, allowing handset providers and service providers to either (a) pass the savings onto consumers or
(b) keep the difference. The former is not likely to happen because it is not logical for Microsoft to
lower its price to compete with Android because (1) Microsoft’s current target consumers are not retail
customers but business users; business users are not as price sensitive, and (2) Android
do not meet business users’ needs regardless of the price. It is possible that Apple, in an effort to
compete with Android for retail consumers, will become royalty free or reduce its fees to service providers.
Android could respond by offering advertising revenue share to the handset manufacturers and
emphasize its functionality (more games, applications) to consumers to develop more consumer pull for
its phones. It could also work harder with application developers to make more games and applications
for the phone.
8
See reference to recent lifting of WIPI requirements
9
Wall Street Journal. August 27, 2008
10
http://www.nytimes.com/2007/07/05/technology/05online.html?_r=2&oref=slogin

Entry Strategy- Joint Venture
The Korean handset and mobile service provider markets are dominated by a small number of
Korean firms that spend heavily to remain top-of-mind with consumers. It would be advantageous for
Android to joint venture and co-advertise with these firms rather than attempt to enter alone with
HTC 11 and attempt to compete for consumer awareness. A joint venture with SK Telecom and Nokia
Samsung or LG is recommended. These firms have an established distribution system, are already well-
known and trusted by the Korean consumer, and they have relationships with potential advertisers. SK
Telecom also owns Korea’s number one social networking site, Cyworld, boasting the registration of 90
percent of Koreans in their 20s and 25% of the total population of Korea. 12 A mobile phone app for
Cyworld could help draw more users to Android-based phones and provide a powerful mobile
advertising platform for Google. Because they are new to the market, an Android-based phone can
offer very little to potential joint venture partners at this point except a share in advertising revenue- a
potentially powerful motivator when looked at in the long term.
Positioning
Google’s Android is the mobile OS that offers innovative technology and, due to its
open platform, the most flexibility—allowing its customers to enjoy new applications and games before
anyone else. Proper management of developers would allow Android to fully maximize this
advantage—particularly if it can influence developers to create scores of applications for
Android alone.
In regards to retail consumers, while Google’s country of origin, the United States, draws
13
premium prices for retail products in Korea, this is not the case in technology products. Also, Koreans
have strong nationalist sentiments that flare up occasionally against prominent foreign firms. Android’s
US origin, if handled correctly, is not damaging to the brand. However, it would not be wise to
emphasize it in the consumer marketplace.
Marketing Strategy for Consumers- Create Consumer Pull
Google’s goal at this early stage of introduction to the Korean mobile phone market is to build
awareness and create buzz for the service/handset/operating system bundle. Google’s focus should be
on getting accepted in society through co-advertising with its Korean service provider and handset as
well as some of its Korean application advertisers and developers. While it should make people aware
11
HTC manufactured the first Android-based phone sold in the United States
12
http://news.softpedia.com/news/Android-to-Go-to-Korea-This-Year-107829.shtml
13
http://www.koreatimes.co.kr/www/news/special/2008/07/175_18931.html

of its positioning as a dynamic, exciting new product, Korean consumers are more interested in design,
trendiness and popularity; using a popular celebrity would be appropriate.
The marketing mix (See Exhibit 3) for the Android launch among mass consumers should include
television, internet, movies and mobile internet advertising. Popular celebrities can advertise the
product as well as the most exciting Korean-language applications that you can run on it at the moment-
games, banking apps, shopping apps, social networking apps like the Cyworld application mentioned
earlier. An advertising budget can be broken down as follows:
Exhibit 3: MARKETING MIX
Advertising $ 8,000,000
TV $ 4,500,000
Internet/Mobile Internet $ 2,000,000
Integrated Marketing
(Word-of-mouth referral system, Film product $ 1,100,000
placement, street teams, etc.)
PR $ 400,000
Advertising and PR firms should be Korean and be hired in conjunction with Android’s handset
and service providers in a co-branding effort with handset makers and service providers. Internet and
television play an important part in this advertising campaign. The internet campaign should include
targeted (search-based) ads as well as efforts to encourage users to write testimonials of their
experience with the phone on popular product review sites. Marketing on SK’s Cyworld and on the
popular search engine, Naver, would also be included in this campaign. Integrated marketing efforts can
include product placement, street teams and a new referral system that encourages Android phone
owners to refer their friends and family to Android in exchange for some free phone service, premium
applications, or Cyworld virtual currency, “Dotori.”
Marketing Strategy for Joint Partners- Service Providers, Handset Manufacturers
In regards to marketing to mobile service providers and handset manufacturers, Google should
consider following the lead of RIM and Apple and opening a local remote office with Korean staff and

support to maintain close relationships with its venture partners. Its business model is based on
advertising, so Android can offer advertising revenue as well as reduced-cost advertising positions in
Google search and in Android pre-installed apps. This income stream will incentivize handset makers, and
service providers to work on Android’s behalf to saturate the Korean market.
UNITED KINGDOM
The Sell or License Decision
Android should enter the market itself rather than through licensing. The product, the
operating system, has already been manufactured and can be adapted for the UK market at a low cost
(R&D), especially since user needs are not very different from the US market and Britons speak the same
language. The UK mobile phone use is sophisticated—the mobile advertising model can be applied to
generate profit for Google.
Pricing
While Android charges no royalty and instead generates revenue through mobile advertising, it
could reverse this decision if it chose to. Google is the #1 brand in the world and has presence in the
United Kingdom. Also, there is a growing trend of consumers beginning to demand specific phones and
systems from their service providers (most recently with the iPhone). It would be possible for Google to
ask handset manufacturers to pay the royalty fee for the right to carry their operating system and draw
consumers—and therefore service providers to the handsets.
Possible competitive reactions include the reduction or elimination of royalty fees by Microsoft,
RIM, or Apple, allowing handset providers and service providers to either (a) pass the savings onto
consumers or (b) keep the difference. As in the Korea case, this is not likely to happen because it is not
logical for Microsoft to lower its price to compete with Android because (1) Microsoft’s target
consumers are not price-sensitive retail customers but business users and (2) Android currently does not
meet business users’ needs regardless of the price.
RIM also charges a royalty fee and competes in the business and the consumer space. Its
Blackberry Storm is a direct competitor to Android for retail customers. In this case, Android could
respond in the same way it could respond to a competitive reaction by Apple-offer advertising revenue
share to the handset manufacturers and emphasize its functionality (more games, applications) with
consumers. It could also work harder with application developers to make more games and applications
for the phone.
Entry Strategy-Wide Distribution

The UK mobile service provider market is divided among many players-- taking this fragmented
market into consideration, it may be more beneficial to Google to advertise the Android operating
system separately from the service provider and try to get it installed in phones sold by as many mobile
network providers as possible. It could also work with different manufacturers and service providers to
create branded promotional bundles that it could advertise to consumers in a co-promotional scheme.
The mobile phone handset market is less fragmented than the mobile service market. The
largest handset percentage share in the UK is owned by Nokia with 43% of the market. Sony-Ericsson
has 18% if the market and Samsung has 21% of the market. The remaining handset market share is
divided among Motorola, LG and others. 14 I would recommend that Android become installed first in
Nokia phones—and then distribute the OS to other players in the market.
Positioning
Google’s Android is the mobile OS that currently offers the most innovative technology and, due to its
open platform, the most flexibility—potentially allowing developers to develop new applications and games
for Android before anyone else. Proper management of developers would allow Android to fully maximize
this advantage—particularly if it can influence application developers to create the majority of applications for
Android.
In regards to retail technology consumers, Google’s country-of-origin, the United States, cannot
cannot be used to draw more consumers to Android or to demand a premium price.
Marketing Strategy for Consumers- Create Consumer Pull
There is a gradual change in demand for mobile phones today—UK consumers are beginning to
demand specific phones and operating systems from their service providers (O2 profited from this shift
in consumer behavior in 2007 with their exclusive launch of the Apple iPhone; Vodaphone sales were
pushed up significantly from their exclusive launch of the Blackberry Storm). I would recommend that
Google leverage this shift in consumer power by marketing directly to consumers to develop a consumer
pull for their OS.
Google’s goal at this early stage is to build awareness of the exciting new functionality of the
operating system and emphasize the design of the phones that it comes on. Design is very important to UK
consumers; Google should make efforts to ensure that its operating system comes equipped on well-
designed phones. Celebrities do not have the same impact in the UK as it does in Korea. Instead,
14
“Market Share,” Mobile Phones and Network Providers – UK, November 2008.

Android can work with handset makers and service providers to be put in branded packages like T-
mobile package called “Life’s for Sharing."
The marketing mix for the Android launch among mass consumers should include television,
internet, movies and mobile internet advertising. More spend in television and integrated marketing
and less spend on internet advertising would be appropriate (See Exhibit 4) to impact consumers where
they are most accessible.
Exhibit 4: MARKETING MIX- Consumers
Advertising $ 9,000,000
TV $ 5,800,000
Internet $ 1,000,000
Integrated Marketing
(Viral marketing, Film product placement, street $ 2,500,000
teams, etc.)
PR $ 200,000
Television and integrated marketing campaigns play an important part in this advertising
campaign and should be used to create awareness of the phone—with special emphasis on Android’s
applications and the phone’s design. The internet campaign should include targeted (search-based) ads
as well as efforts to encourage users to write testimonials of their experience with the phone on popular
product review sites. Integrated marketing efforts can include product placement, street teams and
viral marketing on Bebo and Hi5- currently the most popular British social networking sites.
Marketing Strategy for Joint Partners- Service Providers, Handset Manufacturers
In regards to marketing to mobile service providers and handset manufacturers, Google can
incentivize handset manufacturers to build Android phones by offering shares in Android advertising revenue.

Appendix 1- Android and Potential Adaptations
The Android operating system (OS) is Google’s base software that runs on a “smart phone.” A smart
phone can be defined as a mobile phone offering advanced capabilities beyond a typical mobile phone,
often with PC-like functionality. It is open-platform software, which means that any software developer
can access its code to create change it or to create software to run on it. Also, all of Android’s data and
software is stored online and on your phone simultaneously. This allows users to access their contact
information on their computer and also allows Google to study usage habits and to send users
extremely targeted advertising. For example, you can look up a mapped route to a car dealership and
Android can suggest related products and sales on your way to the location. It can later send you an ad
for a new car. Another power feature is the ability to scan a UPC code in a store to instantly pull up
comparison prices. This would be appealing to users that regularly research prices before purchase.
Android is designed to run on a 3G (or SCDMA) phone network, but can be modified to run on the more
common CDMA network type at slower speeds and less functionality. The first Google phone widely
available, the G1, sells in the United States for $179.99 dollars with a 2 year contract with T-Mobile.
Android has several global competitors in the smartphone OS category: Symbian (46.6% worldwide
15
market share), Mac OS/iOS/iPhone (17.3% Market Share), 16 RIM/Blackberry (15.2% market share), 17 and
18
Windows Mobile (13.6% market share). The iPhone is the most similar in target customer,
interface, and capability to the Android G1. IPhone has the advantage of the Apple brand, intuitive
interface and enthusiastic customers worldwide (worldwide market Share growth for iOS was 523%
19
between Q3 ‘07-Q3 ’08).
Because users shop for phones based on the total package the operating system developer and
hardware manufacturer have to offer— how important these competitors are is a function of how
entrenched the manufacturers are in the market and how much freedom users have in choosing their
phone (in the US, unlike many other countries, the users must choose among phones carried by their
major carrier). Android has been the primary draw for the users for the G1, but this is a temporary
novelty until it is carried on multiple phone models. Most users are looking for a complete package of
functionality for phones, and Google has some ability to influence its manufacturers to carry important
adaptations.
15
Fortune Magazine; http://apple20.blogs.fortune.cnn.com/category/market-share/ November 7, 2008
16
Ibid
17
Ibid
18
Ibid
19
Ibid

The Android is expected to become a worldwide leader for mobile phone operating systems. It
will be carried on multiple cellular networks and used in phones built by the most popular
manufacturers. However, there are limitations to its ability to expand internationally.
First, Google’s business model for Android depends on advertising revenue from both local and
online retailers. Its market, therefore, is limited to those regions with populations attractive to these
advertisers (high discretionary income). These target regions must also contain retailers willing and
capable of paying for mobile phone advertising. Some retailers are already utilizing mobile phone
advertising this in Europe and Asia, most commonly via SMS text messages.
Another limitation for an Android mobile phone is distribution. The G1 can be bought online,
but most phones today are bought in retail stores. In order to succeed, Android must joint-venture with
a manufacturer (and carrier if following the US cellular market model) that is widely accepted by its
target customers and that already has a distribution system in the country.
Finally, Android’s potential is limited by its target customer. The Android OS can be run on a mass-
produced, low-end phone, but the limitations of this hardware would force Android to severely limit its
functionality—and thus its differentiation and ability to compete successfully in the market. Therefore,
assuming that Android will be run primarily on “smart phone” hardware, the target customer could be
defined as those that would purchase a “smart phone.” Because Android, like iOS, has yet to be
accepted by industry as a business productivity tool, this target customer likely to buy this phone for his
or her own personal use. The most similar phone to the G1 in the United States is the Apple iPhone; the
typical US buyer interested in buying the iPhone early in its life cycle had a household income of
$75,000.00 (26% higher than the national average), is more likely to be male than female (72% male),
has 58% likelihood to have complete college, and has an average age of 31 years old, with equal
20
proportions of buyers between the age brackets of 15-24, 25-34, and 35-45.
In the United States, smart phone buyers are relatively sophisticated users that own other internet devices
and computers. They use a smart phone to increase their convenience or productivity. They have a
demand for a portable device with more applications than placing calls. However, transferring our
definition of the market demand for this product from the developed world to other countries is a
potential error. The Android operating system and its associated hardware is capable of replacing the
functionality of a laptop (dual core processor, 32 GB expandable hard drive, 192 Mb SDRAM, Qwerty
20
Digital Life America. Solutions Research Group. http://www.intomobile.com/2007/06/13/chart-iphone-buyer-
profile.html. Accessed February 18, 2009

21
keyboard, and an operating system to be released in laptops by 2010), digital camera (3.2 Mpixels)
and cellphone.
In the developing world, an Android phone like the G1 could be marketed as an all-in-one mobile device
for users that do not have alternative access to the internet or to home computers. Google intends to
subsidize the price of the hardware (the phone itself) in developing countries with the potential of
generating mobile ad revenue. Also, because Android runs simultaneously on Google’s “cloud” and on
the phone, it could potentially be used as a “slim client” – a stripped-down computer that sends its
major processing tasks and data storage needs to servers elsewhere. GoogleDocs is an common
example of such a processing task. A typical Android smart phone can be adapted to run word
processing and excel sheet programs and be used as a primary computing device. Regions where
ground-based internet infrastructure is lacking but that supports cellular telephones would be good
markets for this type of device. The emergence of low-cost wireless broadband internet access through
Wi-Max technology (beginning in 2010) would make this all-in-one device practical in parts of the
22
developing world.
An Android all-in-one device would require additional software adaptation (like word processing
applications) as well as hardware adaptations (ability to add a keyboard or TV monitor hookups).
Education of customers (about its practicality and use) and education of local tech support would be
recommended. The G1 battery is designed to accommodate 5 hours of heavy use, but creating easy
access to additional low cost batteries and chargers (conventional and solar) would be helpful
adaptations. The addition of a powerful processor with low power demands like Intel’s halfnium chip
could also reduce its power demands.
Android’s open source capability and easy-to-use Java programming language makes it markedly
more adaptable than other devices. For example, while the system’s default language is English, users or
phone vendors can go online and load their language into the system. Adaptations for regional dialects
or uncommon languages can be made available for download by independent developers. Applications
designed to meet the needs of local populations can be created by local developers and installed easily.
21 “
You can run Android on a netbook, but why would you want to?” Liliputing. January 28, 2009
http://www.liliputing.com/tag/android Accessed February 18, 2009
22
“Cisco Goes Where No WiMax Has Gone Before” The Motley Fool. February 10, 2009

Unfortunately, this dependence on local developers for applications will limit Android’s expansion to
nations that (China and India, for example) have an abundance of technical talent.
Android has potential for global expansion worldwide. The key to a successful expansion is
study of the markets based on selling the phone in a westernized smartphone market definition as well
as the all-in-one device. As consumer acceptance of an all-in-one device in the developing world is an
unknown factor, primary research here is essential.

Appendix 2- Determination of Global Markets for Expansion, Ranking
This model used to establish the top countries to enter with the Android mobile operating system was
developed after determining that its consumers will primarily be retail (non-commercial) buyers.
Therefore, the following variables were relevant: population, GDP per capita and number of internet
users per capita
Smart phones devices running the Android operating system are likely to be purchased primarily by
consumers for personal use due to industry’s data security concerns and historical precedence from the
iPhone. First, much like Google’s other SaaS application like Gmail and Google Docs, applications and
data used on Android phones are run online on Google’s server cloud. Google is having difficulty with
the adoption of these SaaS applications by industry partly due to the perception that SaaS applications
could not keep data secure from competitors. 23 This perception is likely to apply to a mobile SaaS
OS like Android. Second, iPhone has also been slowed in adoption for business use due to
security concerns-- making benchmarking to the iPhone appropriate. According to Nielson Mobile, the
majority of iPhone users are personal users. In a Q1 2008 study, 15% of iPhone users said that their
companies pay their iPhone bills, 24% said that they use the phone for business but pay the bill
themselves and 61% said that they were personal users. 24
Explanation of Variables
Population
Population was chosen to explain market size because, as a consumer product, the an Android phone
could be purchased by anyone. This data was captured from NationMaster, 25 which uses 2008 data
from the World Development Indicators database and the CIA World Factbook.
GDP Per Capita
23
Kulick, Matt. Lecture on Cloud Computing and Google Enterprise Applications. Cornell University
Phillips 101. 22 October, 2008
24
Media Blast. Nielson Mobile.
http://www.nielsenmobile.com/html/press%20releases/iPhoneStatistics.html Q1 2008
25
http://www.nationmaster.com/red/graph/peo_pop-people-population&b_printable=1&ob=ws

Smartphones like Android phones (at present) are purchased primarily by users in wealthy nations. I
calculated GDP per capita from NationMaster data. 26 Most GDP numbers are from 2006; a few smaller
countries had 2000 or 2003 data. NationMaster data is from the World Development Indicators
database and the CIA World Factbook.
Number of Internet Users Per Capita
The variable ‘number of internet users per capita’ is helpful in explaining the likelihood to purchase
because it represents a nation’s interest in technology. I could have used the rate of adoption of mobile
phones, but this would not be a relevant statistic. In some countries with high rates of mobile phone
use, users buy cellular phones because the infrastructure for standard phones are lacking. Such reason
for adoption will skew any results for a luxury/convenience product like a smartphone. 'Number of
internet users' was a statistic from the CIA World Factbook. 27
I did not use an additional variable to represent supporting infrastructure statistic because it is highly
correlated with Internet Usage Per Capita. Also, as mentioned in the previous report, the Android
operating system can run on any kind of mobile network from CDMA to 3G. The rapid introduction of
WiMax in developing countries to make broadband wireless access affordable and ubiquitous will begin
in 2010. Wireless service is available in most populous countries, as reflected in the recent UN report
28
that six in ten people in the world now have a mobile phone subscription.
Choice of method
The Screening and Tradeoff technique for data analysis was used because Google has the resources
needed to compete for the best markets. The Screening and Tradeoff technique allows one to choose
the best markets regardless of competition.
The screens that I chose to use were:
26
http://www.nationmaster.com/red/graph/eco_gdp-economy-gdp&int=-1&b_printable=1&ob=ws
27
https://www.cia.gov/library/publications/the-world-factbook/rankorder/2153rank.html
28
UN: Six in ten people now have a mobile phone subscription. International Herald Tribune. March 3,
2009

Minimum population of 20,000,000
Minimum GDP per capita of $3,000
Internet usage per capita of .42
I chose a minimum population of 20,000,000 because this is a product that is not widely used and
therefore requires a large market base to sell to. A Minimum GDP per capita of $3,000/yr would allow
Android to be marketed to the top 23% of earners in the world. Finally, the median internet usage rate
among the most final list of populous and wealthy nations is .42. I chose this as the screening minimum
for the final screening.
Final Multiplying and Summing
After the final screening, I was left with this list of countries: Canada, South Korea, United States, Japan,
United Kingdom, Taiwan, Malaysia, Italy, Romania, Australia, Germany, France, Spain and Poland.
These countries’ descriptive variables (Population, GDP Per Capita, Internet Usage Per Capita) were
banded according to their membership in deciles.
Finally, I weighted each variable by their contribution to overall market demand for the product:
• Market Size: 3
• Wealth: 4
• Likelihood of Purchase: 2
Wealth was weighted highest because this product is an currently an expensive luxury product with expensive
components. Consumer’s ability to afford the product is fundamental for demand. Market size is also
important because smart phones are marketed to a niche segment that can be proportionally sized to
the larger population. Finally, likelihood of purchase is weighted 2 because it is represented by Internet
Usage Per Capita- a data point that can only be loosely correlated with interest in technology and, thus,
smart phones.
I included (and subsequently eliminated in the screening process) Brazil, Russia, India and China but
added the two larger countries-- India and China-- back to the final list because their large populations

and their wealth disparities could house a sizeable niche of individuals wealthy and educated enough to
create sizeable demand for an Android smartphone. The final 10 countries recommended for further
analysis are (in random order): South Korea, United States, Japan, United Kingdom, China, India, Canada,
Taiwan, Malaysia and Italy.
Data Problems
I would have liked to have a variable to explain consumer attitude on data privacy. One of Android’s
barriers to adoption is consumer reluctance to share their phone activities and data online.
However, I could not find a representative statistic for all of the countries in the primary list.
An additional variable that I searched for was adoption of smartphones on a country-to-country basis. I
contacted the Johnson School Management Library and Robert Roche of the CTIA (an international
association for the wireless telecommunications industry)—but they were also unable to find this
information. If this information was available, it would be weighted 5 to reflect its importance in
predicting Android OS’s diffusion.

Exhibit A: Initial Screening
a. Population
Market Size
Raw Screened
Population (1s) Population (20,000,000 minimum)
China: 1,330,044,544 Afghanistan: 32,738,376
India: 1,147,995,904 Algeria: 33,769,668
United States: 303,824,640 Argentina: 40,482,000
Indonesia: 237,512,352 Australia: 21,007,310
Brazil: 196,342,592 Bangladesh: 153,546,896
Pakistan: 172,800,048 Brazil: 196,342,592
Bangladesh: 153,546,896 Burma: 47,758,180
Nigeria: 146,255,312 Canada: 33,212,696
Russia: 140,702,096 China: 1,330,044,544
Japan: 127,288,416 Colombia: 45,013,672
Mexico: 109,955,400 Congo, Democratic Republic of the: 66,514,504
Philippines: 96,061,680 Côte d'Ivoire: 20,179,602
Vietnam: 86,116,560 Egypt: 81,713,520
Ethiopia: 82,544,840 Ethiopia: 82,544,840
Germany: 82,369,552 France: 61,037,510
Egypt: 81,713,520 Germany: 82,369,552
Turkey: 71,892,808 Ghana: 23,382,848
Congo, Democratic Republic of the: 66,514,504 India: 1,147,995,904
Iran: 65,875,224 Indonesia: 237,512,352
Thailand: 65,493,296 Iran: 65,875,224
France: 61,037,510 Iraq: 28,221,180
United Kingdom: 60,943,912 Italy: 58,145,320
Italy: 58,145,320 Japan: 127,288,416
South Africa: 48,782,756 Kenya: 37,953,840
Korea, South: 48,379,392 Korea, North: 23,479,088
Burma: 47,758,180 Korea, South: 48,379,392
Ukraine: 45,994,288 Madagascar: 20,042,552

Colombia: 45,013,672 Malaysia: 25,274,132
Spain: 40,491,052 Mexico: 109,955,400
Argentina: 40,482,000 Morocco: 34,343,220
Sudan: 40,218,456 Mozambique: 21,284,700
Tanzania: 40,213,160 Nepal: 29,519,114
Poland: 38,500,696 Nigeria: 146,255,312
Kenya: 37,953,840 Pakistan: 172,800,048
Morocco: 34,343,220 Peru: 29,180,900
Algeria: 33,769,668 Philippines: 96,061,680
Canada: 33,212,696 Poland: 38,500,696
Afghanistan: 32,738,376 Romania: 22,246,862
Uganda: 31,367,972 Russia: 140,702,096
Nepal: 29,519,114 Saudi Arabia: 28,146,656
Peru: 29,180,900 South Africa: 48,782,756
Iraq: 28,221,180 Spain: 40,491,052
Saudi Arabia: 28,146,656 Sri Lanka: 21,128,772
Uzbekistan: 27,345,026 Sudan: 40,218,456
Venezuela: 26,414,816 Taiwan: 22,920,946
Malaysia: 25,274,132 Tanzania: 40,213,160
Korea, North: 23,479,088 Thailand: 65,493,296
Ghana: 23,382,848 Turkey: 71,892,808
Yemen: 23,013,376 Uganda: 31,367,972
Taiwan: 22,920,946 Ukraine: 45,994,288
Romania: 22,246,862 United Kingdom: 60,943,912
Mozambique: 21,284,700 United States: 303,824,640
Sri Lanka: 21,128,772 Uzbekistan: 27,345,026
Australia: 21,007,310 Venezuela: 26,414,816
Côte d'Ivoire: 20,179,602 Vietnam: 86,116,560
Madagascar: 20,042,552 Yemen: 23,013,376
Syria: 19,747,586 Total 5,996,984,230
Cameroon: 18,467,692 Average 107,089,004
Netherlands: 16,645,313 Median: 42,752,362
Chile: 16,454,143
Kazakhstan: 15,340,533
Burkina Faso: 15,264,735
Cambodia: 14,241,640
Malawi: 13,931,831
Ecuador: 13,927,650
Niger: 13,272,679
Guatemala: 13,002,206
Senegal: 12,853,259
Angola: 12,531,357

Mali: 12,324,029
Zambia: 11,669,534
Cuba: 11,423,952
Zimbabwe: 11,350,111
Greece: 10,722,816
Portugal: 10,676,910
Belgium: 10,403,951
Tunisia: 10,383,577
Czech Republic: 10,220,911
Rwanda: 10,186,063
Serbia and Montenegro: 10,159,046
Chad: 10,111,337
Hungary: 9,930,915
Guinea: 9,806,509
Belarus: 9,685,768
Somalia: 9,558,666
Dominican Republic: 9,507,133
Bolivia: 9,247,816
Sweden: 9,045,389
Haiti: 8,924,553
Burundi: 8,691,005
Benin: 8,532,547
Austria: 8,205,533
Azerbaijan: 8,177,717
Honduras: 7,639,327
Switzerland: 7,581,520
Bulgaria: 7,262,675
Tajikistan: 7,211,884
Israel: 7,112,359
El Salvador: 7,066,403
Hong Kong: 7,018,636
Paraguay: 6,831,306
Laos: 6,677,534
Sierra Leone: 6,294,774
Jordan: 6,198,677
Libya: 6,173,579
Papua New Guinea: 5,931,769
Togo: 5,858,673
Nicaragua: 5,785,846
Eritrea: 5,502,026
Denmark: 5,484,723
Slovakia: 5,455,407
Kyrgyzstan: 5,356,869

Finland: 5,244,749
Turkmenistan: 5,179,571
Norway: 4,644,457
Georgia: 4,630,841
United Arab Emirates: 4,621,399
Singapore: 4,608,167
Bosnia and Herzegovina: 4,590,310
Croatia: 4,491,543
Central African Republic: 4,444,330
Moldova: 4,324,450
Costa Rica: 4,195,914
New Zealand: 4,173,460
Ireland: 4,156,119
Lebanon: 3,971,941
Puerto Rico: 3,958,128
Congo, Republic of the: 3,903,318
Albania: 3,619,778
Lithuania: 3,565,205
Uruguay: 3,477,778
Mauritania: 3,364,940
Liberia: 3,334,587
Oman: 3,311,640
Panama: 3,309,679
Mongolia: 2,996,081
Armenia: 2,968,586
Jamaica: 2,804,332
Kuwait: 2,596,799
West Bank: 2,407,681
Latvia: 2,245,423
Lesotho: 2,128,180
Namibia: 2,088,669
Macedonia, Republic of: 2,061,315
Slovenia: 2,007,711
Botswana: 1,842,323
Gambia, The: 1,735,464
Guinea-Bissau: 1,503,182
Gaza Strip: 1,500,202
Gabon: 1,485,832
Estonia: 1,307,605
Mauritius: 1,274,189
Swaziland: 1,128,814
East Timor: 1,108,777
Trinidad and Tobago: 1,047,366

Fiji: 931,741
Qatar: 824,789
Cyprus: 792,604
Réunion: 787,584
Guyana: 770,794
Comoros: 731,775
Bahrain: 718,306
Bhutan: 682,321
Montenegro: 678,177
Equatorial Guinea: 616,459
Solomon Islands: 581,318
Macau: 545,674
Djibouti: 506,221
Luxembourg: 486,006
Suriname: 475,996
Guadeloupe: 452,776
Martinique: 436,131
Cape Verde: 426,998
Malta: 403,532
Western Sahara: 393,831
Maldives: 385,925
Brunei: 381,371
Bahamas, The: 307,451
Iceland: 304,367
Belize: 301,270
French Polynesia: 283,019
Barbados: 281,968
Netherlands Antilles: 225,369
New Caledonia: 224,824
Samoa: 217,083
Mayotte: 216,306
Vanuatu: 215,446
São Tomé and Príncipe: 206,178
French Guiana: 199,509
Guam: 175,877
Saint Lucia: 159,585
Tonga: 119,009
Saint Vincent and the Grenadines: 118,432
Kiribati: 110,356
Virgin Islands: 109,840
Micronesia, Federated States of: 107,665
Aruba: 101,541
Jersey: 91,533

Grenada: 90,343
Northern Mariana Islands: 86,616
Antigua and Barbuda: 84,522
Andorra: 82,627
Seychelles: 82,247
Man, Isle of: 76,220
Dominica: 72,514
Bermuda: 66,536
Guernsey: 65,726
American Samoa: 64,827
Marshall Islands: 63,174
Greenland: 57,564
Faroe Islands: 48,668
Cayman Islands: 47,862
Saint Kitts and Nevis: 39,817
Liechtenstein: 34,498
Monaco: 32,796
San Marino: 29,973
Saint Martin: 29,376
Gibraltar: 28,002
British Virgin Islands: 24,041
Turks and Caicos Islands: 22,352
Palau: 21,093
Wallis and Futuna: 15,237
Anguilla: 14,108
Nauru: 13,770
Cook Islands: 12,271
Tuvalu: 12,177
Saint Helena: 7,601
Saint Barthelemy: 7,492
Saint Pierre and Miquelon: 7,044
Montserrat: 5,079
Falkland Islands (Islas Malvinas): 3,140
Svalbard: 2,165
Norfolk Island: 2,128
Niue: 1,444
Tokelau: 1,433
Christmas Island: 1,402
Holy See (Vatican City): 824
Cocos (Keeling) Islands: 596
Johnston Atoll: 396
Pitcairn Islands: 48
Total: 6,705,862,170

Average: 27,825,154.20
Median: 4,467,937
Minimum (border) 20,000,000
b. Wealth Per Capita
Wealth per capita (=GDP/Population) Wealth per capita (GDP/Population)
Raw Screened
GDP GDP
Afghanistan: $256.55 Algeria: $3,397.34
Algeria: $3,397.34 Argentina: $5,287.73
Argentina: $5,287.73 Australia: $36,567.16
Australia: $36,567.16 Brazil: $5,439.28
Bangladesh: $403.53 Canada: $37,680.26
Brazil: $5,439.28 Colombia: $3,017.66
Burma: $1,560.57 France: $36,546.72
Canada: $37,680.26 Germany: $35,288.29
China: $2,006.00 Iran: $3,383.51
Colombia: $3,017.66 Italy: $31,726.53
Congo, Democratic Republic of the: $128.44 Japan: $34,096.84
Côte d'Ivoire: $866.42 Korea, South: $18,355.42
Egypt: $1,315.38 Malaysia: $5,893.00
Ethiopia: $161.31 Mexico: $7,632.02
France: $36,546.72 Peru: $3,196.24
Germany: $35,288.29 Poland: $8,798.10
Ghana: $551.94 Romania: $5,466.35
India: $789.43 Russia: $7,014.39
Indonesia: $1,534.48 Saudi Arabia: $11,005.87
Iran: $3,383.51 South Africa: $5,227.08
Iraq: $446.56 Spain: $30,228.60
Italy: $31,726.53 Taiwan: $23,061.88
Japan: $34,096.84 Thailand: $3,149.13
Kenya: $558.20 Turkey: $5,601.53
Korea, North: $1,259.84 United Kingdom: $38,478.25
Korea, South: $18,355.42 United States: $43,452.10
Madagascar: $274.38 Venezuela: $6,884.84
Malaysia: $5,893.00 Total: 455,876
Mexico: $7,632.02 Average: 16,884.30

Morocco: $1,668.65 Median: 7,632
Mozambique: $357.45 Minimum: $3,000.00
Nepal: $272.76
Nigeria: $784.15
Pakistan: $745.54
Peru: $3,196.24
Philippines: $1,217.25
Poland: $8,798.10
Romania: $5,466.35
Russia: $7,014.39
Saudi Arabia: $11,005.87
South Africa: $5,227.08
Spain: $30,228.60
Sri Lanka: $1,276.30
Sudan: $934.01
Taiwan: $23,061.88
Tanzania: $317.90
Thailand: $3,149.13
Turkey: $5,601.53
Uganda: $297.18
Ukraine: $2,307.05
United Kingdom: $38,478.25
United States: $43,452.10
Uzbekistan: $628.21
Venezuela: $6,884.84
Vietnam: $706.99
Yemen: $828.07
Total: 480,331
Weighted average: 8,577.33
Median: 2,157
Minimum: $3,000.00

c. Internet Usage Per Capita
Likelihood of Purchase (Internet Users/Population) Likelihood of Purchase (Internet Users/Population)
Raw Screened
Internet Users Per Capita Internet Users Per Capita
Algeria 0.10 Canada 0.84
Argentina 0.23 Korea, South 0.74
Australia 0.54 United States 0.73
Brazil 0.25 Japan 0.69
Canada 0.84 United Kingdom 0.66
Colombia 0.27 Taiwan 0.64
France 0.51 Malaysia 0.63
Germany 0.52 Italy 0.55
Iran 0.35 Romania 0.54
Italy 0.55 Australia 0.54
Japan 0.69 Germany 0.52
Korea, South 0.74 France 0.51
Malaysia 0.63 Spain 0.49
Mexico 0.21 Poland 0.42
Peru 0.26 Total: 8.49
Poland 0.42 Average: 0.606545035
Romania 0.54 Median: 0.59
Russia 0.21 Minimum: 0.42
Saudi Arabia 0.22
South Africa 0.10
Spain 0.49
Taiwan 0.64
Thailand 0.20
Turkey 0.18
United Kingdom 0.66
United States 0.73
Venezuela 0.22
Total: 11.30931901
Average: 0.418863667

Median: 0.415576903
Minimum: 0.42
Exhibit B: Normalized Data, Weighting, Final List excluding India and China
Market Size (Population) Wealth (GDP Per Capita)
Weight: 3 Weight: 4
Band ID Band ID
(Quintile) (Quintile)
Australia 21,007,310.00 1 Australia 36,567.16 8
Canada 33,212,696.00 3 Canada 37,680.26 8
France 61,037,510.00 8 France 36,546.72 7
Germany 82,369,552.00 8 Germany 35,288.29 6
Italy 58,145,320.00 5 Italy 31,726.53 5
Japan 127,288,416.00 9 Japan 34,096.84 6
Korea, South 48,379,392.00 6 Korea, South 18,355.42 3
Malaysia 25,274,132.00 3 Malaysia 5,893.00 1
Poland 38,500,696.00 4 Poland 8,798.10 2
Romania 22,246,862.00 1 Romania 5,466.35 1
Spain 40,491,052.00 5 Spain 30,228.60 4
Taiwan 22,920,946.00 2 Taiwan 23,061.88 3
United United
Kingdom 60,943,912.00 7 Kingdom 38,478.25 9
United States 303,824,640.00 10 United States 43,452.10 10
Total: 945,642,436.00 Total: 385,639.51
Average: 67545888.29 Average: 27545.67906
Median: 44,435,222.00 Median: 32,911.68

Likelihood of Purchase (Internet Users Per Capita) Final List of Countries
=SUM of Each Band ID x
Weight: 2 Weight
Band ID RAN
(Quintile) K
Australia 0.54 3 United States 86.00 1
United
Canada 0.84 10 Kingdom 71.00 2
France 0.51 2 Japan 67.00 3
Germany 0.52 3 Canada 61.00 4
Italy 0.55 5 France 56.00 5
Japan 0.69 8 Germany 54.00 6
Korea, South 0.74 9 Korea, South 48.00 7
Malaysia 0.63 6 Italy 45.00 8
Poland 0.42 1 Australia 41.00 9
Romania 0.54 4 Spain 33.00 10
Spain 0.49 1 Taiwan 30.00 11
Taiwan 0.64 6 Malaysia 25.00 12
United
Kingdom 0.66 7 Poland 22.00 13
United States 0.73 8 Romania 15.00 14
Total: 8.49 Total: 654.00
0.60654503 46.7142857
Average: 5 Average: 1
Median: 0.59 Median: 46.50

Appendix 3- Market Descriptions-Korea and United Kingdom
KOREA
Who are the c ?
Smartphone phone users in Korea can be divided into two segments: corporate consumers and retail
consumers. Corporate consumers place greater emphasis on productivity-enhancing applications and

security. Retail consumers demand a bundle of attributes including design, price, and function and
popularity of the phone. Both retail and corporate consumers demand standard Korean language
features like Korean language input and display.
What are their purchase habits (decision-making, location of purchase, etc.)?
Consumer sophistication in Korea is very high, as nearly 93% of Koreans carry mobile phones. 29 Primary
research has indicated that, while the final decision of which phone to purchase is one of personal
preference, word of mouth and popularity is very important. User reviews online are very influential in
the purchasing process. Koreans consider their phones (denoting a difference in product definition) as a
fashion accessory and design is key, often eclipsing price and functionality as a criterion. Importance of
functions differ by consumer age- gaming and television viewing is more important to younger
generations.
The market is very trend-based where new phones are introduced frequently with a lot of promotions
celebrity endorsements and advertisements. Handset price is less important than service subscription
price (typically $30-40/mo) since service providers provide subsidized handsets in exchange for
customer contracts.
Phones can be purchased in several locations including department stores, service provider stores, mega
electronics stores (100+stores in one building) and temporary street promotion booths. Prices differ at
these distribution points, so people often look for the best product/discount/service bundle.
How are products and services being used?
Mobile phones have become an important part of everyday life in Korea and are far more integrated
into day-to-day activities than people in most other countries. According to mTrends, 63 percent of
South Koreans make payments using their cell phones. In 2006, 30 percent of students sent over 100
text messages a day. Koreans watched an average of 129 minutes of television on their cell phones
every day and 37% have downloaded games onto their cell phones. 30
29
“Apple, Nokia eye the Korean market,” The Korea Herald, August 21, 2008
30
http://www.m-trends.org/2008/10/a-day-in-the-life-of-a-mobile-phone-in-seoul.html

If the market is changing, how?
The worldwide mobile market is in flux. The global financial crisis has been leading demand to drop as
consumers are choosing to delay upgrading their phones. 31 Mobile phone sales have been suffering a
drop in volume sales year-over-year worldwide. Smartphones, however, are still at the early part of
their product cycle and their sales have continued to increase despite the economic downturn. Their
sales worldwide are predicted to grow 8.9 percent this year and increase to 24 percent in 2010. 32
Korean smartphone sales are increasing rapidly. The first smartphone, the Samsung Ultra Messaging
Phone, arrived in 2005 but failed to sell in large numbers due to high prices and problems with the
interface. Last year, smartphones made up 1% of all mobile phone models on sale. However, the
successful introduction and preliminary sales of several new models (Blackberry, HTC Dual Touch) leads
industry experts to expect smartphones to sell increasingly well in the coming years. 33
Korea’s mobile data networks are also changing. When Korea chose a 2G network standard to build its
mobile infrastructure, it used CDMA, which differs from the global standard and created a competitive
hurdle for other standard phone makers. It is now shifting to 3G networks, thus flattening the playing
field for competitors as well as supporting high-data smartphone usage. Currently, 50% of Korea’s
mobile phone subscribers have 3G services included in their phone plans.
Foreign handset manufactures are likely to be hurt by the drop in value of the Korean won. This drop in
value will likely raise the import prices of foreign goods for domestic buyers and hurt demand for these
phones.
What is the distribution system (if relevant) or the entry structure of other foreign competitors (if
relevant)?
31
Joan Ng, “Mobile phone makers find ways to survive hard times,” The Edge Singapore, January 19,
2009
32
Brian Perez, “Smartphones set to weather market decline.” South China Morning Post, December 23, 2008
33
“Spring is smartphone season, from the iPhone to the Insight,” Joins.com, February 27, 2009

The largest mobile phone service provider is SK Telecom, which has more than 22 milion subscribers and
more than 50% market share. 34 Korea’s second-largest service provider is KTF (Korea Telecom Freetel)
with 12 million subscribers.
Like in the US, phones in Korea are sold by the service provider, often with a price subsidy applied to the
handset cost in exchange for signing a service contract. SK Telecom is the largest telecommunication
provider in Korea with more than 22 million subscribers and 50% market share. 35 Korea’s second-largest
service provider is KTF (Korea Telecom Freetel) with 12 million subscribers— the first Korean mobile
phone service to offer the Apple iPhone (late 2009). 36
Phones sold in Korea are manufactured by local players—Samsung and LG account for 80% of the
handset market. 37 Locals Pantech and Curitel own 18% of the handset market and US-based Motorola
has a market share of less than 10%. 38An operating system trying to enter Korea would be wise to joint-
venture with Samsung or LG as well as SK Telecom or KTF. There are four foreign handset
manufacturers in Korea today-Motorola, Casio and HTC and newcomer RIM (Blackberry). 39
Who are your competitors and how are they communicating with customers?
Most smartphones in Korea use Microsoft Mobile OS which accounts for 90 percent of the market. 40
SK Telecom has recently introduced the Blackberry phone 41 that is targeted primarily at business
consumers. This is a new entry in Korea’s traditionally closed smartphone market environment
dominated by Korean firms.
Korean telecommunications firms (service providers and handset manufacturers) spend heavily on
marketing--often using celebrities in their advertising. Primary research has indicated that image and a
34
“SK Telecom and RIM introduces the Blackberry solution in Korea,” ENP Newswire, December 16, 2009
35
Ibid
36
“Spring is smartphone season, from the iPhone to the Insight,” Joins.com, February 27, 2009
37
“Apple, Nokia eye the Korean market,” The Korea Herald, August 21, 2008
38
“Can foreign handsets succeed?,” The Korea Herald, March 3, 2009
39
“Apple, Nokia eye the Korean market,” The Korea Herald, August 21, 2008
40
http://news.softpedia.com/news/Android-to-Go-to-Korea-This-Year-107829.shtml
41
“SK Telecom and RIM introduces the Blackberry solution in Korea,” ENP Newswire, December 16, 2009

feeling of belonging (collectivism) is very important to Koreans, so consumer communications often
include celebrities in advertising.
Most Koreans are solely familiar with the larger local firms like Samsung and LG. I would recommend
that a new entrant in the smartphone OS market co-brand with well-known Korean firms to take
advantage of its top-of-mind position in Korea. It would be very difficult for a multinational to justify
outspending local firms there in an effort to compete for consumer awareness.
What are the political restrictions/regulations?
Until late last year, one of Android’s largest stumbling blocks for entry into Korea was its local mobile
software standard, WIPI (Wireless Internet Platform for Interoperability), designed to create barriers to
entry by foreign handset manufacturers and maintaining market share for LG and Samsung. 42 This
standard was middleware (software) that had to be integrated (at great expense) into a phone’s
operating system. On December 8, 2008, it was announced that this requirement will be lifted
beginning April 1, 2009, allowing access to the Korean market by foreign systems like Apple OS.
Sumsung/RIM’s Blackberry was granted an exception to the rule just prior to the announcement.
It can be predicted that these regulatory changes will make Korea’s smartphone OS market more
competitive and fragmented; Apple, HTC, and Nokia have announced plans for new smartphones to be
released in Korea this year.
UK
Who are the customers?
As in Korea, mobile phone consumers in the UK can be divided into two segments: corporate consumers
and retail consumers. Corporate consumers place greater emphasis on productivity-enhancing
applications and security. As stated in the prior section, suspicions regarding security due
42
Cho Jin-seo, “IT regulation prevents Korean access to iPhone,” The Korea Times, June 10, 2008

to the SaaS model used by the Android system compels Google to focus on retail buyers and small
business buyers in the short term. Retail consumers demand a bundle of attributes including design,
price, and function. Unlike Korean consumers, popularity of the phone is not as important as the
individual buyer’s decided preference for the phone for him/herself.
The UK mobile phone market is well-saturated. There are 74 million mobile phone subscribers with a
population of 60 million. The smartphone market in the UK is large, contributing to sales of 470,000,000
pounds in 2008.
Over 85% of adults have a mobile phone. The UK population is also growing—making this an attractive
market for suppliers. The British population has historically been aging, but those that are being
marketed to by cell-phone providers (below 45) have grown up with technology and are not predicted
to leave the marketplace.
What are their purchase habits (decision-making, location of purchase, etc.)?
The typical phone purchase transaction in the UK proceeds as follows: (1) the consumer determines a
monthly budget for mobile phone service and selects a service plan accordingly. (2) The consumer
chooses a handset that fits the predetermined budget (price) based on design and functionality;
According to primary research, design is considered more important than functionality for the typical
British consumer.
Consumers are increasingly purchasing bundles of phones and service contracts in branded packages
like T-mobile package called “Life’s for Sharing” and Nokia’s “Comes with Music.” As other mobile
phones are increasingly becoming commoditized, branding is becoming more and more critical to the
profitability of firms in this industry.
Smartphones are more costly investments than regular phones, and UK shoppers are researching these
phones online before purchasing. 50% read online customer reviews before buying a smartphone,
compared to 30% that read online reviews before buying a cellphone. 43
43
“Smartphone sales are keeping the flagging UK mobile market afload, shielding it…,” Computer Weekly, April 21,
2009

UK mobile phone buyers purchase most (61% of all phone sales volume) phones in a fragmented group
of specialty mobile phone stores like “The Carphone Warehouse” (13% of specialty store volume),
Phones4U (8% of specialty store volume) and O2 stores (7% of specialty store volume). 15% of all phone
sales volume is sold in department stores and electronics stores. 10% are sold in supermarkets and 12%
are sold via internet/telephone/mail order. 44
How are products and services being used?
While mobile phone application usage is not as high in the UK as it is in Korea, most British phone
owners report using most of the features available on their phones. 65% of mobile phone users report
taking pictures on their phone (33% year on year growth between 2007 and 2008). 44% send pictures
on their phone (63% growth), 36% use Bluetooth, 35% play games (59% growth), 31% listen to music
(72% growth), 31% make videos (24% growth), 24% browse the internet (33% growth), 22% listen to the
radio (57% growth), and 14% send video (75% growth). The United Kingdom’s heavy mobile application
use may be correlated with its well-developed mobile phone infrastructure; 90% of the country is
covered by high speed 3-G networks.
Smartphones are used heavily for regular emailing (77% of smartphone users), GPS positioning (40%)
and instant messaging (38%). 45 A large number of UK consumers, 1 million, now use mobile banking
services. 46
If the market is changing, how?
The mobile phone market in the United Kingdom, like that in the rest of the world, is being affected by
the global financial crisis. Consumers are reducing their subscription plans by an average of 4 pounds
per month. 47 However, a Mintel survey conducted in November of 2008 indicates that the economy will
have only limited impact on Briton’s mobile phone consumption. Only 12% of respondents indicated
44
“Distribution,” Mobile Phones and Network Providers – UK, November 2008
45
“Smartphone sales are keeping the flagging UK mobile market afload, shielding it…,” Computer Weekly, April 21,
2009
46
“Monolink aligns with the growth of smartphones,” M2 Presswire, February 6, 2009
47
“Smartphone sales are keeping the flagging UK mobile market afload, shielding it…,” Computer Weekly, April 21,
2009

that they would switch networks for a cheaper service plan and only 4% planned to switch from a
contract to a pay-as-you-go system. 48 Further, a large percentage (60%) of UK mobile users does not
expect the economy to change their mobile phone buying decisions. 49
Despite the state of the economy, smartphone sales are rising. 13% of all handset sales in 2007 were
smartphones and 23 % of all handset sales in 2008 were smartphones. This is due in part to planned
upgrades of current mobile phones. According to Computer Weekly, 25% of Brits say that their next
phone will be a smartphone. 50
There is another market-shifting trend beginning in the mobile phone industry. The popularity of
particular smartphone brands like the Apple iPhone have drawn market share power from the service
provider to the handset manufacturer and the consumer. Consumers are increasingly demanding
particular phones (and operating systems) from their service provider 51—moving away from their
traditional decisions model based on price. O2 profited from this shift in consumer behavior in 2007
with their exclusive launch of the Apple iPhone. Vodaphone sales were pushed up significantly from
their exclusive launch of the Blackberry Storm. I would recommend that Google leverage this shift in
consumer power by marketing directly to consumers to develop a consumer pull for their OS.
What is the distribution system (if relevant) or the entry structure of other foreign competitors (if
relevant)?
Like in Korea, mobile phones are sold by service providers as a package under a service contract. Unlike
Korea, however, the UK mobile phone service market is competitive and fragmented. The largest
market shares in mobile services are owned by 02 with 25.6% of the UK market, Orange with 21.3% of
the market, Vodaphone with 22.1% and T-Mobile with 17.2%. Also selling mobile phone services in the
UK are Virgin Mobile, 3 and Tesco. 52 Taking this fragmented market into consideration, it may be more
beneficial to Google to advertise the Android operating system separately (no co-branding) from the
48
“Market in Brief,” Mobile Phones and Network Providers – UK, November 2008
49
Ibid
50
“Smartphone sales are keeping the flagging UK mobile market afload, shielding it…,” Computer Weekly, April 21,
2009
51
Ibid
52
“Market Share,” Mobile Phones and Network Providers – UK, November 2008

service provider and try to get it installed in phones sold by as many mobile network providers as
possible.
The mobile phone handset market is less fragmented than the mobile service market. The largest
handset percentage share in the UK is owned by Nokia with 43% of the market. Sony-Ericsson has 18%
if the market and Samsung has 21% of the market. The remaining handset market share is divided
among Motorola, LG and others. 53 Due to the fragmented nature of the handset market, I would
recommend that Android become installed first in a Nokia phone—and then distribute the OS to other
players in the market.
Who are your competitors and how are they communicating with customers?
Google’s Android OS’s competitors in the UK are as varied as the handset manufactures and include
Symbian OS, Apple’s OS (iPhone), RIM’s Blackberry OS, Windows Mobile OS, and Linux OS.
Advertising spend in the mobile handsets and networks sector has been dropping steadily since the end
of 2006, dropping 15.7% overall between Q3 2006 and Q3 2008. In response, service providers are
branding phone/subscription packages and advertising them in innovative ways. T-mobile’s “Life’s for
Sharing” package and campaign includes integrated marketing techniques like the hiring of performance
artists and training of T-mobile employees to “unexpectedly” dance in London’s Liverpool Station.
Audience member’s reactions were filmed for use in commercials. 54 Related ads were placed in digital
outdoor ads, print ads, online ads, and radio advertisements as well as in advertisements in movie
previews.
Is should be noted that--in contrast to Korean advertising—the “Life’s for Sharing” campaign starred
regular people, not celebrities. Advertisers in the United Kingdom and the US do not use celebrities as
often as Japan, Korea and China (where over 20% of ads feature celebrities). 55 Research firm Millward
Brown has determined that this is due to differences in effectiveness for celebrity endorsements. Some
of these differences could include the emphasis on individuality over collectiveness in European
countries.
53
“Market Share,” Mobile Phones and Network Providers – UK, November 2008
54
http://adzilla.blogspot.com/2009/01/t-mobile-lifes-for-sharing.html
55
http://www.millwardbrown.com/Sites/MillwardBrown/Media/Pdfs/en/KnowledgePoints/358D2249.pdf

What are the political restrictions/regulations?
There are very few political restrictions that would affect a foreign mobile service/handset/OS firm from
entering the UK phone market. To illustrate the openness of the UK mobile phone regulatory
environment, look at the dominant players in the industry. The dominate handset manufactures are
from Finland (Nokia), Sweden and Japan (Sony Ericsson) and Korea (Samsung). The largest mobile
phone service providers are from the UK (O2 and Vodaphone), France (Orange) and Germany (T-
Mobile).