A year ago, WWJ predicted the end of packet-based pricing. A year later, KDDI/au, and Japan, would seem to be entering a new price war. Today, KDDI threw down the gauntlet to DoCoMo by slashing its fixed packet charge from 4,200 yen to 2,000 yen (Yes! You read that right…) on August 1, while flaunting three cool new mobile models armed with what will rapidly become de rigeur in Japan: flash! We’ll have an exclusive video program with Anup Murarka, Macromedia’s senior director of mobile marketing and devices coming in a few weeks, and — of course — breathtaking visuals of KDDI’s newest and sexiest phones and menus. But first, let’s take a look at the No. 2 carriers’s latest strategy to keep pummeling DoCoMo and Vodafone for new adds in a maturing market.
KDDI’s strategy, for want of more complicated words, could be called ‘cheap and cheerful.’ If you add fact to impression in the form of the huge price cuts and the dandy new Flash-driven menus, you arrive at what KDDI believes is a winning combination.
At least that’s what management has been telling journalists at press conferences in the lead up to Wireless 2004. Facts: KDDI stunned DoCoMo when they went for flat rates last November; the company spent three out of the following four months taking over 60 percent of new adds in Japan. While Au’s withering attack on DoCoMo has been severely blunted by the advent of the FOMA 900i-series since February, KDDI can still claim a 75 percent share of Japan’s 3G market.
So what is the response to 900i? In one sense, it’s defensive. Quite why a fast-thinking company such as KDDI came a year after DoCoMo with Flash, we don’t know. But, after a year’s development work, we can tell you the Flash/BREW menus on the W21SA by Sanyo, the W21S by Sony Ericsson, and the W21K by Kyocera really rock! (Again, please stay tuned for our upcoming program.)
There’s no doubt that EZweb has just had a major upgrade, which has been long in the coming, but well worth it. Remember back in 1999 when Chaku-melo started — and then 2001 when movies and games emerged as key drivers? With BREW in support, the new Flash-powered menus represent a near revolution that will, we feel, delight pocket-book-opening users.
In fact, we were so impressed with the new (QVGA-supported) visuals we can almost give a qualified nod of approval to KDDI’s boast of bringing a PC-like (in terms of looks) environment to the keitai. Don’t forget the 600 kilobytes now packed in for game applis as well. Not to be outdone by DoCoMo, DragonQuest, Final Fantasy, and load of other clobber also get crammed into the new models.
Below the Belt…
On the other hand, KDDI’s response to 900i just went from reactionary to plain vicious. We could almost hear the gashing of teeth from DoCoMo HQ in Otemachi a kilometer or so away from today’s packed press conference at the Imperial Hotel as KDDI announced slashing its fixed rate to an entry-level, bargain-basement price point of 2,000 yen — that’s about $20, give or take whatever speculators are doing to the rates this quarter.
This is very cheap for the Japan market and possibly extremely cheerless for DoCoMo who have publicly repeated that they don’t want to get into a price war with KDDI. The “Double” (whammy??!!!) as KDDI are calling the new rate works like this: subscribers pay 2,100 yen (including tax) for 40,000 packets: from this to 84,000 packets, data gets charged at 0.05 yen per packet with the 4,200-yen flat rate coming on at 84,000 packets.
Have these people been taking their vitamins? We figure this means they can now milk the low-end users who would never have dreamed of reaching into their pockets to pay for (this many or even any) packets.
Readers also might like to know that Au figures it’s doubled packets used per day per person from about 200/day/person in 1Q-3Q, 2001, to 472 packets/day/person as of 4Q, 2003.
We almost forgot the phones themselves, and they are no slouches: the W21SA sports a 2.4-inch screen and a 2-megapixel CCD cam plus an FM radio; the W21S similarly sports a 2.4-inch QVGA screen, 1.3-megapixel camera, and stereo speakers; the W21K, a bargain model, still has a respectable camera (1.31 megapixels) and a QVGA screen.
But see Flash on these babies and prepare to be wowed!
And you shall — just stay tuned to WWJ!
— Paul Kallender-Umezu