Some sage advise when entering new turf; Stop, Look and Listen.. it’s also good to find a local guide to help smooth your path. Japan is the cradle of mobile civilization and WWJ has covered this story for over a decade – trust our archives here offer some useful material.
Domestic activities continue to set the pace, and increasingly sharp players are looking at global markets. We have hard-earned industry knowledge and built a trusted network of contacts with access to advanced intell. and potential deal flow. Need a lift.. Ok, buckle-up!
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10th Anniversary of Mobile NFC in Japan
On June 16th 2004 DoCoMo held a press conference at the Teikoku Hotel to introduce the world first commercial launch of NFC enabled mobile phones. While the 10th anniversary is coming up next week, we have not seen anything about it (yet), suppose that’s why you love us.. as we’ve always been ‘just slightly’ ahead of the curve.
I’m a bit slammed for time, our client projects work is always my top priority, but I really do want to get a few thoughts out on this thread. We had covered the initial DCM trial debut, in December 2003, however July 2004 was an official four model roll-out (only 1 of them 3G!) to the public at large here. The domestic market was already well-established with card-type Tap & Go for payments, so predictable addition to handsets with screen display and internet connection had finally arrived, that iconic event marked a natural evolution of mobile in Japan. FeliCa Networks was incorporated in January of 2004 with current shareholding structure at 57% Sony, 38% DoCoMo and 5% by East Japan Railway with records stating 236 Million total aggregate “Mobile” FeliCa chips shipped to-date. The P506iC went on sale July 10th, 2004.
For starters perhaps a good idea to clear-up some standard misconceptions; such as usual “FeliCa is not really NFC” and that’s just another “weird Japan” thing. Looking at the global industry association NFC Forum, and Yes, Tagawa-san is still Chairman, their defined spec. is noted quite clearly. Regardless of the intricate Type A/B etc. standards, with ISO awarded or otherwise, the Sony solution is certainly NFC(.) I might also add it’s comparatively superior in both speed and security while indeed that result comes with a slight premium attached. As for the ‘cultural’ aspect, and we’ve said it countless times here over the years: it’s really the Business Model that’s unique.. not the end users. There are So Many examples of ‘people are people’ (from London to New York to Tokyo), if you provide them a valuable offering they will generally respond in the same way. Obviously there are issues in other markets surrounding regulations with respect to telecoms and banking or sales channel distribution of handsets vs. Japanese operators build to order approach. Simply put: it’s proven, at scale, for a decade.
A few more generic points we (still) see via comments from overseas:
What if I lose my phone?
- At least you can remotely lock it, what happens if you lose your wallet.. @_@
What if my battery dies?
- Transactions are powered by point of sale reader, no battery in NFC card-style.
How do I access money?
- In Japan there are four ways: Direct connect to bank account or credit card (requires pin), incremental amount top-ups from either of aforementioned accounts, carrier pre-approved limit with transactions settled via your monthly bill or add cash credit value at any location with point of sale reader that can debit (7-11 etc).So, where are we after 10 years? A typical challenge to get good numbers, best effort figures indicate +90 Million active NFC handsets in Japan with 1.8 Million point of sale locations. One well-placed source has indicated weekly active users are hovering just above the 30% ratio, of course it would be great to know those daily and monthly numbers too. Further ‘nice to have’ dark data would be: what is the annual gross, net and the average spend of all mobile NFC clients in Japan – good luck with that, a safe bet it’s worth alot of cupcakes!
Now, 3 quick points going forward. Let’s get the gorilla in the room out of the way first: Apple. Will they pull the trigger.. of course, it’s not If but When and as usual most important – How? Currently lots of chatter about BLE, but many might consider that pre-Y2K tech developed by Nokia to be somewhat less than ideal for privacy and financial transactions. Interesting side note related, Aplix has just announced an interim solution. On the global side of getting NFC firmly established, as we’ve mentioned in the past: Boys Need Girls. While having critical mass device adoption is increasingly evident with low-cost per unit for the hardware, all those end users require significant enabled locations in order to actually engage. Finally, as we move towards a next-gen. connected world of sensors and wearables, this quick, unique and secure date exchange of 1′s and 0′s will ultimately become (cough Camera Phone cough) a natural and universal part of your daily life.
Whew, 700 words and no lunch-break for me, Yoroshiku!
Filed Under: Editors Note
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Mobile World Congress – The Beat Goes On
Yet another exciting visit to Barcelona for the annual ‘must-do’ Mobile World Congress event, with a record 85,000 folks in attendance this year, it was classic chaos as always with more than 1,800 exhibiting companies showcasing across 98,000 square metres of hall space and 3,800+ international media covering the action.. as per this Shatters Previous Records PR.
While you can watch the interviews at Mobile World Live** and skim the Show Daily reports, there really is nothing like being on the ground and in that mix. Of course there are tons of reviews online, and their official Event Highlights is a good starting point, a couple of quick post-show thoughts below from our perspective – likely somewhat off the usual radar.
**DoCoMo Keynote Presentation HerePlenty of buzz headed into MWC this year with the FaceBook aquisition of WhatsApp, it will be interesting to see how their joint initiative with GSMA develops on connecting billions in developing markets. While the final price-tag seemed to have a extra zero, certain Rakuten and LINE folks were both smiling here, comment by Bill Gates in Rolling Stone was bang-on: “..Zuckerberg wants Facebook to be the next Facebook”. As luck would have it, we crashed their top-secret VIP shaker which was, as the kids say these days, Epic.
Despite a hectic daily meeting schedule, managed to spend a little time focused on what Japan brought to the party for 2014; the DoCoMo booth in Hall 1 had a decent range on display – from 5G to Hitoe Wearable – through to App Planet in Hall 8.1 where Jetro was hosting a handful of energetic startups together with the Sony FeliCa team again this year. Along the way we saw Panasonic with their latest HARDware and Kyocera had a few plastic mock-ups behind glass. Sadly the locals had no part in Connected City, which pulled pretty decent traffic, and they did not earn a single Award despite multiple examples which either pre-date or excel some of those featured offerings.
From the gut: a shame Jetro lost the front door position in App Planet from last year and smaller booth design was rather ‘closed’ to walk through traffic. Looking at their website, English and Japanese, zero mention of this important trade mission? Compared to Israel, albeit always a strong player at MWC, the difference is.. notable. That said, here’s the point generally not found in main-stream; the traditional focus with nano-attention to product, and the subtle approach on it’s delivery, is well-understood in Japan. However, the old-school players are rather more awkward when trying to play the loud splashy games found at such events. An easy example, based on above, would be: What ‘if’ Fujitsu made Really Big Noise about their haptic touch tablet with a cool demo that featured it’s ability to render Braille!
Imagine making the digital world easily available to the blind, not to mention all the media attention that little stunt would have brought? To be clear, yes, there has been chatter about this concept in the past, but apparently still no actual product on the street, as Yoda(san) famously said: Try Not – Do or Do Not. Simply.. ahead much work there is..While the main Fira Gran Via venue had plenty candy, to us, the real story this year was actually back at the original Fira Monjuic location with WIP-Jam and Four Years From Now both Rocking daily programs! Suffice to say easily half of my 200+ business cards collected during the week came via these two gigs. Full props to all involved, Audi clearly leaned in with support for the main stage and the city of Barcelona, under Mobile World Capital, set the tone for this new additional activity to become an increasingly important part of MWC. I’m pretty bullish on the future build and combined potential – where the money meets the talent – going forward and thrilled to become increasingly involved. Up next: Mobile Asia Expo in June!
Thanks to @GSMA, another impressive effort, we all lived happily ever-after.. The End.
Filed Under: Editors Note
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A Startup Renaissance is Building in Japan
I don’t have time to write here often enough.. but this topic has been bubbling for awhile now. It’s a sunny Saturday so will take quick shot, you might wanna grab a coffee!
There’s plenty of chatter about the global startup scene along with so-called ‘innovation’ opportunities and many challenges faced by players at all levels in that space. It would be easy to pepper this with a gazillion links describing how Japan is risk-adverse and/or has no VC base to build next-gen. companies.. bla-bla-bla. Such simplistic points, seldom balanced, need another post to counter with a wave of my magic reality wand.
No, the tight focus here is two-fold: we’re headed into a “Startup Renaissance” in Japan and, therefore, considering carefully near to mid-term road ahead that being the case.
There are literally dozens of big Japanese brands, from Canon to Yamaha, that began long ago with a couple of inspired people in a workshop, more interesting – read: important but usually missed – would be the thousands of companies that are +200 years old. The Valley mantra is Fail Fast.. however, Plan Well is usual procedure here, kindly suggest the hybrid “Plan Well – Fast” as ideal method, keeping in mind Kaizen is long baked into the domestic approach with seeds planted from overseas.
There’s plenty of startup history, Built to Last.
The latest digital economy has enabled significant new offerings from around the world and, whether H/S’ware, tremendous growth for Japanese ICT related fields. A deeper dive topic for any MBA thesis, carefully noting DVD and Ruby on Rails, this ‘business chance’ is certainly now established. My point with those two examples would be that whether it’s via old school corporate, or by relatively un-known individual source, these born in Japan products – along with so.many.others – have demonstrated impact globally.. and not ‘just’ in IT verticals.
While it may be difficult for some to fully grasp, the Island Spirit – Shimaguni Konjo – is very strong here. Designing and running a best-of-breed community model goes right to the core of Japan. This new world order, or New Normal as I’ve stated in these post 3.11 times, has opened the window for some fresh air. While parents and grandparents spent their lives pulling this country from ruins of 1945, the current task for those who follow will be pushing such incredible efforts to the next level. I believe they have the passion, skill and resources to build on that foundation. Go ahead, underestimate them.
The future potential is tangible.
Every viable ecosystem intrinsically addresses the demonstrated need by re-distributing collective value across the group. No single entity holds all the cards. Thankfully there are local icons who have blazed that trail here, from Namba-san, to Son, Natsuno, Tanaka and hundreds more, with Idei-san to launch his World Innovation Lab**. We see amazing talent and energy in the universities, advanced patent power continues at Yokosuka Research Park, while in the trenches affordable open platforms are driving real action along with support from public & private domestic sources. It’s Happening.
**Jan. 27th, 2014 – It’s Official.Ok, with the stage set above in mind, now what.. so many pieces in the puzzle. We have been at the crossroads of corporate and startup, local and global, since 2001 – certain some potential to contribute going forward. Over the coming years it’s a safe bet we’ll see increased interest in Japan, not just because of Tokyo 2020 Summer Games, combined with an ever growing awareness and desire for business overseas by domestic SME’s. Considering our network of contacts and multi-market experience clearly we can fill some of the usual gaps.
One key lesson learned over our time here is the very real power of bringing people together, actually in the same room, under a brand agnostic umbrella. Regardless of their background, current position or nationality, each one has a wonderful blend of standard requirements and unique offerings to embrace. While this can be an awkward (Jr. High school) dance, at first, but that safe ‘friends and family’ sandbox enables F2F encounters that does lead to deal flow.
We took an important first step in that direction with our Tokyo Startups United event. Blessed by a Rock & Roll Shamisen and 300+ people attending, 50/50 domestic vs. international and titles across the spectrum, that room was Really buzzing! Expect further efforts in 2014 and beyond as we explore, together with trusted partners, how best to participate in developing a most valuable and beneficial platform for all.
If “it takes a village to raise a child” this will “take the nation to build a startup generation”. Will it be easy.. not a chance – will it happen.. not a doubt.. がんばろう
Update Dec. 9th: Dentsu Digital Fund Invests in 500 Startups [.Pdf]
Update Dec. 12th: New App Annie Report – Japan App Revenues Take Global Lead
Update Dec. 25th: Merry Xmas Gift via NYT – Start-Up Spirit Emerges in JapanFiled Under: Editors Note
Japan mobile content and commerce market report by MCF FYE 2013 shows strong YoY growth to $30Bn in sales! 
