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New generation arrives for mobile messengers

Publication Date : 15-11-2012

 

The soaring popularity of mobile messengers is nothing new in South Korea, but the competition is expected to get fiercer among the top industrial players like Kakao Talk and NHN’s Line.

In total subscribers, NHN, operator of No. 1 online portal Naver, has secured about 74 million users as of Tuesday with its mobile messenger Line, closely followed by Kakao Talk which has a user base of 66 million as of early this month.

Line, which opened service in June last year, is a mobile messenger that has gained much of its fame overseas, especially in Japan and Southeast Asia.

The company refused to unveil its daily active user figure; however, over 80 per cent of its users are thought to be active on a monthly basis, according to a NHN official.

“We have topped 74 million users as of November 13 and more than 90 per cent of our users are from other countries,” she said.

Profit figures for the third quarter of this year proved Line’s popularity with sales triggered by the mobile messenger service jumping 140 per cent compared to the previous quarter, reaching about $10.09 million in July-September.

Many analysts further predict that profits will grow even more as the firm plans to introduce up to 10 different mobile games using its Line platform, which is how Kakao recently posted its first profit.

“I believe it’s a matter of time until NHN’s Line proves that the market’s high hopes involving the service will be met in reality and further record growth,” said Ahn Jae-min, an analyst at Kiwoom Securities.

“Line’s stock evaluation is positive, as its true monetization will begin with mobile games.”

The list of Line’s newly provided mobile games are to be announced by this month, according to NHN officials.

Currently, most of the profits raised by NHN’s mobile messenger service come from the sales of so-called “stickers,” which are emoticons in various drawings.

“It has been a little over a year since we launched the service and we’re still devising plans on a profitable business model at this point,” the company official said.

Other than NHN’s Line, there are a number of mobile messenger services - such as SK Communications’ Tic Toc and Daum’s MyPeople - in the local and overseas markets, which are eagerly presenting their own points of differentiation, but the situation is not looking rosy for all.

According to Nielsen KoreanClick, the number of people using Daum’s MyPeople recorded about 2.24 million in September, falling behind SK Communication’s NateOn mobile messenger app for the first time.

Unlike Line and Kakao Talk, Daum enabled people to use its MyPeople mobile messenger through personal computers. However, it failed to win the hearts of its users, leading many to abandon the service.

Additional research published by a local media outlet also showed that people surveyed used Kakao Talk for an average of 53 minutes every day, while MyPeople and NateOn were used only for an average of four minutes on a daily basis.

Now the question comes down to what is so special about Kakao Talk, which was not the first mobile messenger service, but was introduced soon after similar overseas services like WhatsApp Messenger.

“The differentiation point for Kakao was that it was offered for free, unlike WhatsApp, although many questioned why the company was doing this for no money,” said an industry source.

“But it was successful in persuading most smartphone owners in Korea to download and use the app. This was a big step because Korea is one of the most wired countries worldwide, which means Kakao is able to test various services such as the mobile game platform with its faithful user base unlike its rivals.”

Being the frontrunner in the local market, many would agree that Kakao has created the “Kakao Talk syndrome” across this nation with it replacing the role of text messages for a large fraction of smartphone users.

Mobile games using the Kakao Talk platform like “Anipang” and “Candy Pang” are also reported to be bringing in tens of millions of won for both the game developers and Kakao.

The mobile game business was marked to be a profitable one, allowing Kakao to jump into the black for the first time on a monthly basis in September since rolling out the messenger service in March 2010.

It is now looking forward to joining hands with overseas mobile game firms to provide more gaming content for its users, according to Kakao officials.

“Mobile games are only the beginning because we’re now in the stage of developing other business models that could take off using our already existing Kakao platform,” Kakao chief executive Lee Sir-goo told The Korea Herald. “I’m also confident that these models will be ones that reach mutual growth between Kakao and our partners.”

 

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