Youtube, SKorea's LG agree to develop mobile phone
SEOUL (AFP) - South Korea's LG Electronics said Tuesday it has signed an agrement with YouTube, the world's biggest video-sharing website, to develop a mobile phone which can operate the service. — LG Electronics said the proposed model …
Context & Ripple Effects
The agreement extends the LG-Google partnership announced in March 2007 from search-and-mail integration on handsets to dedicated video hardware, making LG the first handset maker named to co-develop a phone around a single internet brand.
The timing follows TechCrunch's report of the deal the same day, and it lands while YouTube's traffic is compounding fast — Hitwise data from June 2007 showed US visits up 70% between January and May, with YouTube drawing half again as much traffic as every other video site combined.
First-order effects
- LG gains a differentiated flagship for its European 3G lineup, planned for the second half of 2007, that can upload, view and share YouTube video without a computer — a feature competitors' current handsets do not offer under a recognized brand name.
- YouTube gets its service embedded at the firmware level of a mass-market phone, extending its reach past the desktop just as its traffic lead over rival video sites widens.
Second-order effects
- Rival handset makers face pressure to strike equivalent single-service deals or bundle comparable upload software, turning camera-phone video capture from a spec-sheet line item into a distribution battleground among video platforms.
- European mobile carriers gain a marquee application to sell 3G data plans against, since constant video uploading makes flat-rate or high-cap data tariffs a precondition for the phone's appeal.
Third-order effects
- If the pattern holds, handset competition shifts partially from hardware specifications to which internet services are native on the device, giving web brands leverage over which manufacturers win shelf space.
- The deal points toward carrier-independent content distribution: a phone shipped around a web service rather than an operator's portal erodes the walled-garden model European carriers have used to control mobile content revenue.
The trend: Handset makers are beginning to co-engineer devices around leading internet brands, moving web video off the desktop and onto the phone ahead of the 3G buildout in Europe.