KDDI/ DoCoMo 3G Phone Wars Simmer
At his regular press briefing yesterday, DoCoMo president Keichi Tachikawa said that DoCoMo’s ongoing battle with KDDI to make the best 3G mobile phones is a battle that sometimes KDDI wins and one that sometimes DoCoMo wins, but that strategically, in terms of new services, it’s a war that DoCoMo will win. As of February 2004 the handset battle pits KDDI’s W21H, A5405SA and A1402S against DoCoMo’s 900i series, with the latest, the Panasonic model out about now. Behind that, there’s a speed war, with DoCoMo hastening the rollout of HSDPA initially at 3.6Mbps then 14.4 Mbps vs. CDMA1X WIN’s best-effort 2.4 Mbps. The more important issue for Tachikawa, however, is which carrier will successfully develop a new era (or as he mentioned-about 8 times- a “paradigm shift”) of services over the next two years.
Let’s take a look at the handset situation. According to new subscriber figures over the last quarter or so, Japan Wireless Watchers will know that KDDI has been winning the battle hands down recently. In this light, the release of the three new models this week should keep up the company’s momentum. On the surface of it, it looks as if KDDI is beating DoCoMo at the basic, but important game, of constantly refreshing handsets to lure more customers to upgrades.
The three latest models for KDDI show that DoCoMo is gradually pulling ahead in terms of overall specs; the Hitachi W21H, while not supporting EZchannel, high definition EZmovie, Live Camera, or large-sized high definition MovieMail, does allow the company’s “Mail Mode” to send mega pixel images and the “Okonomi Icon” for downloading users’ favorite menu icons, and the phone does have the by now mandatory megapixel camera. While weighing in at only 108g, the camera has only a 170 hour standby time.
The Sanyo A5405SA is even smaller at 20mm thick, weighing in at 103g, has a 1.2MB BREW folder and the rocking and rolling features, for example the chuku-uta”and EZ Nabi GPS service that are proving extremely popular with customers. But, again, in terms of standby and usage time, the model lags the 900i.
Data we’ve seen has shown that while Panasonic and NEC have a huge brand following in Japan, Sony Ericsson Mobile Communications models are proving the most stylish in the customers minds. (The author fesses up here when he admits he has an A1101S that he picked up for one yen last summer.) The latest A1402S sports the world’s smallest QVGA at 2.3 inches, KDDI’s first infrared function, but not, unfortunately, the fast WIN service.
By comparison, Panasonic’s new 900i series on sale from tomorrow (and the other models by Fujitsu and NEC) would seem to be at least a few steps ahead of any of the latest KDDI offerings. Please see the
Speed Wars, Flatlining
Of course KDDI seems to have two significant tactical advantages over DoCoMo at the moment. W-CDMA speed maxes out at 384Kbps (with about 300 Kbps realizable) vs. WIN’s 2.4 Mbps (max). More importantly, data charges on KDDI services are set at flat rate. DoCoMo’s answers to these issues were made clearer yesterday.
While Tachikawa grumbled that KDDI has moved too fast and too early to introduce flat rates, and ruined one element of DoCoMo’s business plans for raking in cash on FOMA, Tachikawa went some way to confirming that DoCoMo will move to flat rates sooner or later this year. “We can’t sit back and relax,” he said, adding, “once [flat rates are] triggered, they are irreversible, in my view.”
If that’s not an admission that DoCoMo is going to flat rate for data packet charges this year, we’ll eat MacDonalds.
But instead of being reactive, DoCoMo is signaling a full-scale assault on KDDI by trying to moving the business beyond being a race to the bottom as the cheapest carrier. While it’s a war DoCoMo can afford to win, the issue now is to move to HSPDA as soon as possible and arm customers with m-commerce functions with the mobile FeliCa chip, Tachikawa said.
Repeating the phrase “paradigm shift” repeatedly, DoCoMo’s strategy now is to sandwich itself between retailers for transactions with cellular phones just becoming tools for a whole new series of businesses the company is planning around m-commerce.
The shift from moving from a packet/ ARPU boosting bill collector to an m-commerce company has nothing to do with KDDI going flat rate, says DoCoMo.
— Paul Kallender