Chapter 130: Designing a New Market
Chapter 130: Designing a New Market
But is this really realistic?
He had investigated it thoroughly, but this was a market that had not existed in his previous life, so he could not be certain.
However, there was definitely potential. The reason mobile games had not greatly flourished during the feature phone era was more an environmental problem than a device problem.
There was no unified OS, so the development environment was poor. On top of that, games had to be made and optimized differently for each device, so the market was limited unless a developer had considerable development capability. Communication fees were also too high, making the actual cost of installing games excessive.
Above all, telecom companies did not view the mobile game market’s potential highly. Instead of expanding the market, they focused on extracting immediate profits, taking 70 to 80 percent of the revenue earned from selling games.
Naturally, game developers did not want to enter the mobile game market. And since existing developers could not properly earn profits either, it was difficult for them to gain momentum to develop the next game.
Even in this environment, however, quite a few mobile games achieved commercial success. This showed that even the feature phone era’s game market had considerable potential.
Was it Fish-Shaped Bun Tycoon? And there was also a game called NOM that was pretty fun, and some fairly decent RPG series too. I think MMORPGs even came out later.
(Translator’s Notes: Fish-Shaped Bun Tycoon — Korean feature phone mobile game from Insu’s previous-life memories, referenced as an example of a successful mobile game from the feature phone era.)
(Translator’s Notes: NOM — Korean feature phone mobile game from Insu’s previous-life memories, known for its unusual gameplay style and popularity.)
However, there were still some barriers to overcome.
First, creating a high-performance cell phone itself was a problem. This was not about technology. Even the high performance he meant here was not some nonexistent future-level performance, but the highest level currently possible.
The problem was price.
The StarTAC costs a thousand dollars right now.
Insu went to his father and asked him to estimate the cost of a cell phone with the highest specifications currently possible.
“A 386-class CPU, 8 MB of RAM, 10 MB of flash memory, a high-resolution monochrome LCD, and a lithium-ion battery?”
Seongcheol was startled after hearing the specifications Insu listed.
“This isn’t a cell phone. It’s a computer.”
“That’s exactly what I want.”
Insu explained his vision to Seongcheol. Seongcheol listened quietly, thought for a long while, then opened his mouth.
“...Well, cell phones do have CPUs and memory too, so they are computers.”
In truth, this was an era when usable cell phones had only just begun appearing, so the concept of expecting anything beyond calls was difficult in itself. Even in America, which was at the cutting edge of technology, most people still found the very idea of making calls with a portable device amazing.
And even among cell phones people used, the StarTAC was astonishingly sleek and advanced as the latest device. Most people were still using bar-shaped or brick-like phones.
Seongcheol found it hard to judge whether Insu’s vision was possible or what kind of thing it would become.
It makes logical sense. But if everything logical worked, we’d already be living in a science fiction era.
But since this was his son, who had already accomplished astonishing things several times, and since he was not saying they should do it immediately, only that they should investigate various things, Seongcheol agreed for now.
Of course, he did not investigate it personally. He had an employee do it.
By now, Parallel Soft could no longer operate with developers alone. Until fairly recently, Seongcheol and Hyein had handled the administrative work together, but once WET’s service scope expanded and overseas expansion began, they could no longer cover it.
As they hired necessary personnel one by one, around forty people were now working in the second-floor office as well.
Honestly, even that could be considered quite compressed given the company’s scale.
This was largely thanks to Insu’s planning and vision being extremely clear. However, unless Insu was an expert in everything, his knowledge and experience had limits, so increasing the number of staff was inevitable.
A few days later, the employees gathered information, and they were able to receive a rough result.
“It’s a bit expensive.”
“Right?”
It was around 2,500 to 3,000 dollars. This was truly an enormous price.
By 2025 standards, it could be seen as roughly 6,000 dollars. Of course, mass production could lower unit costs quickly, but achieving that with this one cell phone seemed difficult.
“It’s still a bit hard for now.”
After looking through the materials for quite some time, Insu eventually smiled bitterly and said that. In truth, he had expected this to some degree. Although they were not exactly the same as what Insu imagined, there were already quite a few experimental high-end devices, so he could roughly estimate the price from them.
This era had many experimental products in particular. In fact, a device that could already be called the first smartphone, equipped with a touchscreen and various applications, had been released in 1993.
Of course, it had no data communication, no camera, and no app expansion, so it differed from a smartphone in the modern sense. But in the most basic sense of combining a computer and a phone, and having touch functions, it was indeed a smartphone.
“Of course. No one will buy it for 3,000 dollars.”
Honestly, even the StarTAC’s 1,000-dollar price was so expensive that many people questioned whether it could succeed. In current money, it was almost three million won, so that was only natural.
But 3,000 dollars far exceeded eight million won. Of course, if the product had enough appeal, there would still be some buyers, but they would be an extreme minority. Reaching the level of sales needed to build an ecosystem would be difficult.
It seemed he would have to wait a little longer. Maybe after waiting about four years, once the prices of components including lithium-ion batteries had dropped to some extent, and once they could somehow bring it down to around 1,000 dollars, they could try.
Honestly, 1,000 dollars was by no means cheap either. It was only the minimum standard he set by considering that the StarTAC had achieved considerable success despite its 1,000-dollar price.
If he wanted to build a platform according to his goal, they would first have to achieve success in the market, then continuously lower the price through mass production.
“Then are you just going to wait until then?”
“No. I think we can do a few things to build toward it.”
There was also the kind of groundwork where they would get acquainted with cell phone manufacturers and build cooperative relationships, but what Insu had in mind was something more central.
“I’m thinking of developing a mobile OS in the meantime.”
“An OS?! Seriously?”
Current cell phones did not yet have platform-type operating systems. Basic hardware performance was low, and there was no concept of expanding apps like on a computer, so they only had very simple operating systems, closer to firmware, that used the functions set at launch.
(Translator’s Notes: Firmware — Low-level software embedded in hardware devices, usually controlling fixed built-in functions rather than supporting broad app expansion.)
However, even without going as far as smartphones, feature phones would eventually gain more performance and begin using various functions, so a platform-type OS would become necessary to manage them.
“I guess that would happen.”
Seongcheol had a considerable understanding of computers, so he could follow Insu’s prediction without much difficulty.
“So your plan is for us to become the Astra of mobile and monopolize it?”
“No. We are aiming for a monopoly, but not by becoming like Astra.”
What Insu was aiming for was Android.
Feature phones also eventually used operating systems, but rather than buying one developed by a specific software company, most manufacturers used their own proprietary OS.
Because of that, despite feature phones’ high penetration rate, their software market was extremely poor. Since each manufacturer had a different OS, software was not compatible across devices, fragmenting the market and making it unattractive to software developers. In the first place, manufacturers also rarely used external software and instead used software they made themselves.
No matter how much an OS existed and how much potential there was to run various software, if there were almost no people making software, the market had no choice but to be poor.
But from the manufacturers’ perspective, this was natural. Unlike computers, cell phones could sell even with little software.
After all, a cell phone’s main functions were calls and text messages. Everything else was merely supplementary.
“We can’t do it like Astra.”
Even after they began using OSes, manufacturers would not think of them as computers, but only as extensions of firmware. If they tried to sell an OS for money like Astra, manufacturers would have no reason to buy it.
There would be no profit for them, fixed costs would increase, and they would only lose control over their own products.
“Then are you thinking of using an ultra-low-price strategy, lower than the self-developed OS costs manufacturers expect?”
“No. We need to release it completely free.”
“Free?!”
The OS manufacturers wanted was only at a level similar to firmware, so there was no reason for development costs to be very high. But they would not hand over software leadership to an outside company just to save that small amount of money.
However, if it was completely free, the story changed. If the quality was also high, even closed-off manufacturers would have room to consider it.
“But if it’s free, where does the profit come from? Is the goal just to promote our services? Or advertising banners?”
His father’s thoughts were indeed deep and fast. But even so, he could not immediately arrive at Insu’s thought, or rather, Android’s success strategy. Insu smiled broadly and said,
“Promotion is one goal, but not advertising. Promotion is actually a smokescreen. The real goal is to take over the platform.”
“The platform? How?”
“Let me tell you the conclusion first. You know the ESD project we’re currently gathering development personnel for?”
“Yeah. That online distribution company. Huh? Don’t tell me?”
“Yes. We’re aiming for ESD on cell phones too. And as a monopoly.”
Compared to computers, mobile devices were closed systems. This was partly because they were fundamentally communication devices where security was important, and partly because they were smaller than computers, had limited expandability, and were difficult for individuals to assemble or disassemble.
Moreover, because they were communication devices themselves, and because wireless data communication technology developed rapidly, they skipped over data transfers through storage devices and went straight to ESD.
“On mobile, it’s difficult to freely transfer and modify data, and distributing programs through verified sources and routes will be half-forced.”
After hearing this much, Seongcheol continued.
“...And if it’s an ESD supported by the OS manufacturer, it can guarantee a certain level of reliability.”
Seeing his son grin after hearing his words, Seongcheol felt the hair at the back of his head stand up. He knew his son was a genius, but he had not known he could come up with ideas like this in business strategy as well.
Of course, WET, WCHAT, WPAY, and the others were also astonishing items, but the ideas themselves were relatively simple. But the plan to envision a high-performance cell phone, develop a mobile OS for it, and use that to seize control of the platform was truly interwoven with a certainty and precision that seemed to see into the future.
If an ordinary person had said this, he might have dismissed it as writing fiction. But because it was something Insu brought up, it felt this astonishing.
“But considering the projects already underway and in preparation, isn’t adding OS development on top of that too much?”
Windows, or Astra in this world, had already achieved enormous success, and its scale was tremendous. In the case of Astra95, it was known to have around four hundred developers and an overall team size of about one thousand people.
Because of that, OS development had gained the image of being an enormous project. So Seongcheol’s concern was reasonable.
“You don’t have to worry. We still have plenty of time. We’ll develop it slowly on a small scale.”
There was nowhere to use it immediately anyway. No, he did have some thoughts in that direction too, but it was something he needed to consider more. For now, he planned to proceed slowly with a team of around ten people.
“All right. Write up a proposal and submit it.”
“Yes!”
Even if it was a small team, this was still OS development, so they would need high-level developers. And in 1996, such developers had already surpassed annual salaries of 100,000 dollars. Three years of salary for them alone would already cost several million dollars. Add benefits and overhead of about another 30 percent, and it was by no means a small expense.
Even aside from that, the mobile OS is an important project that will continue into the smartphone era later.
Insu put all his effort into shaping the plan.