Experts see 2003 shaping up to be a banner year. For starters, DoCoMo, KDDI and J-Phone will all be coming out with refined 2G equipment. They’ll also be rolling out new 3G systems, expanding rich-media services and launching camera-enabled, programmable handsets that can serve as “e-wallet” and “e-ticket” mobile-commerce terminals.
DoCoMo’s recent troubles highlight a fundamental aspect of Japan’s wireless Internet revolution that I haven’t seen discussed much – namely, the sheer improbability of it all. In 1999 and 2000, during the ascendancy of i-mode, headlines and media quotes from interested parties were quick to praise the insight and innovation of those involved in i-mode’s creation, including the famous Enoki-Matsunaga-Natsuno troika as well as sundry network engineers, Internet-savvy marketers, and handset designers both inside DoCoMo and out.
One of the best aspects of working at WWJ in Japan – the country most responsible for creating the post-war consumer electronics revolution – has to be covering the trade shows. October’s CEATEC is one of Asia’s coolest (and largest) electronics showcase events, and Japan’s cell-phone makers rolled out their very best gear. We speak with Sharp about camera keitai (What’s the cost to add a camera-thingy to a phone?), Hitachi about cell phones morphing into computers (cellys now have 133-MHz CPUs – same as PCs used to), and take a look at J-Phone’s first 3G handset from Sanyo. One of our best programs to date!
The past few days have seen Japan’s big electronic makers releasing their quarterly and semiannual results, and the news from Sony, NEC, Fujitsu, and others has been mostly bad where cell phones are concerned. There have also been a lot of media reports on Japan’s ailing phone tanmatsu (terminal) market, and it appears that majors changes are underway. First, the media reports. On October 10 JEITA announced that domestic shipments of cellular phones fell 18.3 percent in August 2002 from a year earlier to 3.26 million units. The drop resumed a 13-month-long decline that was only broken (briefly) in July 2002 due to sales of camera-equipped models. Moreover, shipments of PHS handsets fell by 64 percent to 73,000 units (extending their losing streak to 18months!).
I received some interesting commentary last week from Kennedy Gitchel, self-described “Long-time Japan resident and wireless watcher” and — until recently — consultant at a major foreign consulting house. Gitchel was responding to a recent WWJ Viewpoint wherein we stated “the cost of fixed-line access plays very little or **no** part in Japan’s mobile Net boom,” to point out that the initial total cost of fixed line access is, in fact, a hefty proposition when you consider both the cost of installing a new phone line and monthly fees together.
We spent a day at Sun Microsystem’s JavaOne conference and show in Yokohama in September, and were pleasantly surprised to meet up with mobile software vendor Openwave, grand-daddy of the WAP Forum (freshly repainted as the Open Mobile Alliance). Japanese carriers have created killer Java services… and they had to do so from scratch. That included the provisioning system which actually feeds the applis onto the handsets (providers merely have to write the downloadable Java code). Now another major player has launched a Java provisioning system (which also works for other content). Want to launch Java, but you’re not partnered with DoCoMo? You’d better watch this one twice…
For the past several weeks, WWJ has been emailing J-Phone to set up an interview for our video newsmagazine. We finally settled on a date, and they asked us to submit our outline questions. J-Phone PR’s Matthew Nicholson responded to some of these earlier this week, and herewith we present a summary of his comments, wherein J-Phone reveals (almost all) about brand image, “plastic” roaming, and handling spam mail.
There’s a tremendous amount of initial wireless LAN network activity going on in Japan right now, but it’s still too early to say how WLAN will affect 3G. One thing is certain however: licensed-spectrum carriers are looking closely at WLAN to determine whether the technology will disrupt their carefully knit 3G network, wireless Internet, and data revenue plans. We speak with an industry insider on a recent WLAN hotspot trial conducted by a major mobile telco. But large carriers and others thinking about launching hotspot networks shouldn’t worry about finding content. First, solve the billing, roaming, and security problems — then content providers will beat a path to your door… just as happened with, oh…, for example, i-mode.
The drop in ARPU could be related to the fact that both DoCoMo and KDDI now have camera-equipped keitais on the market (although DoCoMo’s isn’t Java-enabled). Are we seeing the end of the camera-phone bubble? If so, there’s little else on the horizon to serve as the next market booster — except, of course, 3G speed-optimized services (and KDDI’s got the better network right now).
We think that the market heavyweight, NTT DoCoMo, gets a better payback by spreading Java far and wide (at a low marginal cost), while eschewing pricey gadgets and add-ons (or making the consumer pay for same when desired; we note that DoCoMo’s SH251i is selling for 5,000 yen more than J-Phone’s high-end Sharp Sha-mail handset).
