A couple of interesting events took place in Tokyo last Friday. The American Chamber of Commerce hosted their Fourth Annual E-Business Summit, while Credit Suisse First Boston’s lead telecoms analyst Mark Berman conducted a 3G/Wireless Internet Conference. Some interesting points came out of both. Afterwards, Kobe University’s Jeff Funk commented that the predicted fall in 3G packet prices is “interesting,” while Matsumoto’s additional arguments — that the US is a car society and thus Japan’s experience isn’t relevant — was not valid since “SMS is doing well in Europe and DoCoMo claim that i-mode revenues per person are independent of the region in Japan.”
The CSFB conference generated some interesting news. Afterwards, CSFB’s Berman offered this commentary:
- J-Phone indicated that it would have dual-mode 3G handsets by the end of the year.
- J-Phone would thus enable global roaming in about 50 countries.
- Qualcomm — discussed the mistaken perception of WCDMA being able to provide higher data volume for a lower capex outlay.
- There was much discussion about WLAN, particularly by Intel, who insisted that the technology should be adopted by service providers quickly in order to complement their wireless service offerings. Intel noted that wireless companies are slow in understanding the importance of this technology.
- Omron CellPort Telematics president discussed the growth potential for the telematics industry, particularly in terms of both consumer hands-free cell phone usage in vehicles and commercial vehicle fleet monitoring to increase operating efficiency [see WWJ video on OCTI here].
- Cybird emphasized that 3G is nothing special to the company, except insofar as it increases demand for content and applications over time.
- Microsoft is making good headway in penetrating the PDA market, and this should continue given the company’s resources and in particular its ability to leverage the fact that most corporations and consumers would like a seamless transition from their home or office desktop to their mobile device.
It appears that, as we move into the third fall of Japan’s mobile Internet era, packet cost, subscriber usage habits, roaming, WLAN, telematics, and PDAs are all lively topics — and, except for WLAN, these were all significant factors at the start of i-mode in February 1999.
Speaking at the ACCJ event, Ted Matsumoto, president of Qualcomm Japan, provided an eloquent (and funny) defense of CDMA vis ・via W-CDMA. He painted a picture of W-CDMA as an overly complex, power-hungry, highly engineered solution to 3G which is “costly, requires new infrastructure, and is unnecessarily complicated.” Matsumoto parodied W-CDMA-centric telcos, concluding such firms must believe they have “good engineers, so [they] can make W-CDMA more complicated.” The audience’s laughter was predictable.
Of course, as one of the prime movers behind the initial adoption of CDMA by a Japanese carrier, Matsumoto’s comments were mostly predictable (if nonetheless entertaining). Interestingly, he also had a slide showing that 3G packet fees will drop considerably. According to Matsumoto (who got his data from a Qualcomm study), it will cost GSM/GPRS providers $US0.415 to transmit a megabyte of data, while W-CDMA and CDMA will both come in much lower, at $US0.069 and $US0.059 per megabyte, respectively. Finally, CDMA 1X EV-DO will be champion, with a megabyte costing the provider just $US0.022.
Afterwards, Kobe University’s Jeff Funk commented that the predicted fall in 3G packet prices is “interesting,” while Matsumoto’s additional arguments — that the US is a car society and thus Japan’s experience isn’t relevant — was not valid since “SMS is doing well in Europe and DoCoMo claim that i-mode revenues per person are independent of the region in Japan.”
In other words, according to DoCoMo, i-mode is doing well throughout Japan (even in places where there are no commuters) much the same as SMS is doing well throughout Europe, and therefore mobile data usage doesn’t need a train commuter society — or any other particular society — to become successful.
We tend to side with Funk, and note further that as the cost for wired-PC Net access from home in Japan has fallen to some of the G8′s lowest levels, i-mode and mobile Net usage has not fallen off (as we might conclude if cost of access were the only factor) and has on the contrary grown considerably.
Mobile Net usage appears to be independent of cost of access via wireline PC and independent of the commuter habits of users. Given a fun, low-cost, entertaining way to use the Net via pocket rocket, people will find their own microniches of time in which to do so.
– Daniel Scuka