Japanese carriers prepare for number portability

Japanese carriers want to make sure they did everything to keep customers from fleeing to rivals when the number portability law kicks in November this year. First, they increased the handset subsidies. And now they are improving the floor space of their shops in order to improve shopping experience for customers and put emphasis on their brands.

DoCoMo stated it would open 60 renovated shops with bigger floor space and improved internal design before June 2006. Every shop will require approximately 20-30 million yen ($172,000-$259,000) for a revamp, half paid by DoCoMo and another half covered by the shop operator.

Vodafone in its turn announced the company would average up the number of its specialized kiosks to 2,000 locations to come up to DoCoMo and KDDI au.

Casio’s WCDMA move

With the number of WCDMA users accelerating throughout the globe, Casio decided that it was time to start producing 3G phones compatible with UMTS standard as well.

Having entered the handset business in 2000, Casio initially acquired licenses from Qualcomm to make CDMA One and CDMA2000 1x/EV-DO mobile phones. The company was shipping CDMA handsets to KDDI domestically and to South Korea internationally. However, in February 2006 the company expanded the licensing deal with Qualcomm to cover handsets, supporting the rest of 3G pack -- WCDMA and TD-SCDMA technologies. With this deal, Casio will have an opportunity to target at any 3G operator in the world, not to mention NTT DoCoMo and Vodafone in Japan. The question though is how successful will it be in this endeavor?

Source: Casio press release (Japanese)

Japan's wireless market week wrap-up

DoCoMo postpones launch of Nokia handset
NTT DoCoMo has delayed indefinitely the launch of a 3G phone from Nokia, saying the handset had software glitches. The phone, which is Nokia's first 3G model for DoCoMo, was scheduled to go on sale today.

DoCoMo achieves 2.5Gbps packet transmission
NTT DoCoMo announced that it achieved 2.5Gbps packet transmission in the downlink while moving at 20km/h.

Two new Symbian OS handsets announcement
With the launch of two Symbian OS handsets from Fujitsu (FOMA F702iD) and Sharp (FOMA SH702iD), the total number of Symbian handsets shipped in Japan increased to 24.

iPod in Japan faces stiffer competition from mobile phones
While Apple's iPod is enjoying 51.3% share of the domestic digital-music player market and iTunes online music store leads in song downloads, Japan's carriers and handset makers are plotting a counterstrike to topple Apple by shipping music phones with improved battery life and song higher-quality compression format and launching user-friendly online music stores. Apple's weakness in Japan is the lack of tie-ups with domestic labels, thus Aplle can offer a limited number of songs by Japanese pop-stars.

Toshiba’s 4GB handset hard drive peeked (pics)

In February, Toshiba introduced the W41T, the first handset with a built-in hard drive. Made for KDDI this CDMA EV-DO handset spots a 0.85-inch hard drive capable of storing 4GB of data. The release of Japan’s first hard drive handset generated a lot of hype, so that IT Media website decided to peek inside the W41T to see how the hard drive is accommodated in the limited environment of a handset. See detailed pictures at IT Media.

GPS helps to pinpoint first sakura blossoms with mobile phones

Owners of KDDI au phones with a built-in GPS feature now can access DuoSnap website to view or to send pictures of first cherry tree blossoms in Japan.

Every year the blooming season of the cherry tree is celebrated in Japan with millions of Japanese going out to view the intensity and beauty of blossoms and to enjoy a picnic, called hanami party in Japanese, under the blooming trees. However, the blooming time differs from year to year depending on the weather. And usually the mass media covers the first blossoms of cherry tree throughout the country as the blooming starts in the southern parts of Japan and spreads further to the north. But now, cellphone users can be the first to notify their compatriots about the beginning of sakura blooming. All they need to do is to snap a picture of the local blossoms and email it along with comments and embedded GPS data to DuoSnap website. Later, people can access the website from a cellphone or PC and check the areas where the blooming has actually started by viewing the sakura photos uploaded by other users.

Coca Cola, NTT DoCoMo deployed 5,000 Cmode vending machines across Japan

Credit: Coca-Cola

As of February 16, there were 5,000 Cmode vending machines rolled out across Japan, with more than 500,000 cellphone users subscribed to Club Cmode:

Cmode is a service that lets users of the i-mode wireless Internet service, provided by NTT DoCoMo, buy soft drinks and mobile content such as ringtones, wallpapers and apps from vending machines using their cellular handsets. The Cmode (or “shimo” in Japanese interpretation) vending machines are equipped with a special barcode reader that identifies whether the user is a Club Cmode member, by scanning a barcode displayed on user's cellphone screen. The second generation of Cmode machines called shimo2 can conduct transactions based on contactless payment system FeliCa built in DoCoMo’s wallet-phones. There were 3,000 shimo2 machines out of total 5,000 in Japan by the end of 2005.

The mass-market rollout of Cmode-compatible vending machines began in April 2002, while the first trials were conducted a year earlier. Achieving a 5,000 mark is an impressive milestone for DoCoMo and Coca-Cola Cmode service, however it still accounts for less than 0.5% of total 980,000 Coca-Cola-branded vending machines rolled out throughout the country. Nevertheless, the companies plan to gradually increase the penetration of Cmode service virtually to every vending machine in Japan and make the service compatible with new transaction platforms such as iD and Toruka. Though they do not provide the exact date when it is going to happen.

Source: IT Media

Mobile advertising in Japan: $236m spent in 2005

There is an ongoing global trend of ad money shifting from old to new media – from print, radio and television and into the online arena. Japan is not an exception in this case, but, as always, it is a little bit ahead of the pack as mobile phones start attracting advertisers on a greater scale.

Dentsu, an industry research firm, reports that Japanese advertising market grew 1.8% in 2005 on a yearly basis, totaling 5,962 billion yen (around $50.4bn), with Internet advertising growing at 54.8% in 2005 year-over-year, being one of the fastest growing segment. Overall, the Internet advertising grabbed more than 280 billion yen ($2.4bn) or 4.7% share of total Japanese advertising market. Moreover, 28 billion yen ($236.8m) or 10% out of Internet’s 280 billion yen were spent on a cellphone-targeted advertising. Taking into consideration that there are almost 80 million users with handsets capable of web access in Japan, it is clear why marketers start allocating more of ad budgets for mobile phones.

Dentsu points out that in 2005 mobile marketing attracted big brands from food and automotive industries that conducted mass market campaigns. Thanks to the technological advancements such as high-speed connections, enhanced memory capacity, and multimedia playback capability, the recent handsets gained their recognition as devices capable to display rich commercials. Additional built-in features such as mega pixel cameras with QR-code scanning ability, contactless payment chips, and TV tuners will create even more opportunities for advertisements to reach customers instantly.

Japan's wireless market week wrap-up

NTT DoCoMo, Nippon TV set up mobile TV fund

• NTT DoCoMo and Nippon Television Network will each invest $42 million in a fund dedicated to develop mobile phone TV opportunities.

NTT DoCoMo to continue heavy 3G spending

• NTT DoCoMo chief Masao Nakamura said the company's capital spending would peak in 2006 as it launches a final push to shift users to its 3G network. The company's plans for the business year beginning in April include a 3.3% increase in capital spending and continued promotions for 3G handsets.

Nokia, Sanyo unveil joint venture

• Nokia and Sanyo announced a joint venture to develop and manufacture CDMA phones.

Japanese companies announce 3G phone venture

• NTT DoCoMo, Renesas Technology, Fujitsu, Mitsubishi Electric and Sharp announced a plan to jointly develop a single-chip platform for building 3G phones.

Nokia ships 3G phone to DoCoMo

• Nokia has begun shipping its newest smartphone, the Foma NM850iG, to NTT DoCoMo in Japan.

Toshiba intros bar code-based mobile search

• Toshiba's solution uses the phone's digital camera to snap a photo of the bar code of a product and then carries out real-time blog searches for that product's reviews.

NTT DoCoMo, RealNetworks in video software tie-up

• A memoruandum of understanding is signed between DoCoMo and RealNetworks to jointly deploy software to boost video streaming capabilities for DoCoMo's phones.

Multilingual mobile mapping app targeted at foreigners

(left: Spanish; right: English)

If you are going to visit Japan soon, you will probably find it helpful to have a mapping application on your cellphone written in your native language instead of Japanese. Well, Shobunsha Publications together with Techno Planning developed a multilingual mapping application with maps covering Japan territory entirely, in order to help foreigners better navigate in Japan.

At the moment, the application is written in BREW1.3, thus limiting its use only to KDDI au BREW-compatible cellphones. And the number of languages is set to seven, including Japanese, English, Korean, Chinese, French, German, and Spanish.

Source: Shobunsha Publications via IT Media

Report: Top-selling phones in Japan during first week in February

IT Media published a list of best selling handsets in Japan during the first week of February (01/30/06~02/05/06). Updated on a regular basis by the market research company GfK, the list contains top 10 handsets sold by each of four Japan’s carriers: NTT DoCoMo, KDDI au, KDDI Tu-ka and Vodafone. Below are top three handset models by each carrier:

NTT DoCoMo:

1. NEC N901iS
2. Sharp SH902i
3. Mitsubishi D902i

KDDI au:

1. Toshiba W32T
2. Sony Ericsson W41S
3. Hitachi W32H

Tu-ka:

1. Kyocera TK51
2. Toshiba TT51
3. Kyocera TK41

Vodafone:

1. Toshiba V502T
2. Toshiba 803T
3. Sharp 703SH

Japan market entry-strategy: Motorola and Nokia get into partnerships with local players

Motorola and Nokia are turning their heads toward Japan, seeking technical expertise and new channels for distribution. Motorola hopes to penetrate Japan’s market by co-developing a HSDPA prototype with NTT DoCoMo, while Nokia plans to expand its CDMA market share in North America, utilizing Sanyo’s good relations with US operators and know-how in building high-end CDMA handsets.

Motorola emerges as HSDPA handset maker
In preparation to launch HSDPA services in sometime between July and September of this year, DoCoMo partnered with two domestic vendors Fujitsu and NEC and one foreign vendor Motorola to add three HSDPA capable handsets to its lineup. Motorola said it would leverage the achievement of the joint development with NTT DoCoMo to actively undertake the Interoperability Test partnering with carriers and vendors from around the world. The HSDPA- to-be handset from Motorola is a clamshell-style mobile phone, which resembles the look of its icon product Razr.

Interestingly, Motorola was not mentioned in another announcement made by DoCoMo to jointly develop platform for WCDMA handsets. This time, DoCoMo picked Fujitsu, Mitsubishi, Sharp and chip maker Renesas. The newly developed phone platform will combine a single-chip LSI for dual mode handsets supporting HSDPA/W-CDMA and GSM/GPRS/EDGE, and core software such as operating systems. DoCoMo hopes to strengthen the adoption of WCDMA technology on a global basis, while Fujitsu, Mitsubishi and Sharp can pursue a long-term goal of going abroad with the unified platform. The companies expect to have the platform developed around Q2/FY2007 (July-September). It looks like the first handsets developed by the companies will spot Symbian OS, as Fujitsu, Mitsubishi and Sharp have Symbian expertise. However, taking into consideration DoCoMo’s strategy to keep its portfolio diversified (the company recently announced plans to release HTC Windows Mobile 5.0 smartphone), Linux or even Windows mobile phone makers are likely to join the camp later. Again, Motorola looks as a good candidate for this role, especially, considering its global footprint, the company could reinforce DoCoMo’s strategy of spreading WCDMA and i-mode abroad.

Motorola could also partner with a Japanese manufacturer to launch appealing phones that will help boost its presence in Japan, company’s chief executive said in a recent interview with Reuters. NEC, Panasonic and Sanyo were named as the manufacturers whom Motorola talked to. Now, with Sanyo joining forces with Nokia to develop CDMA handsets, Motorola is left with fewer options. But considering Motorola’s primary OS emphasis on Linux/ Java platform and Microsoft ‘s OS, these options are sweet. According to Strategy Analytics, NEC achieved second position in UMTS global handset shipments for the full 2005 year. Add to this NEC’s long-term commitment to develop Linux-based handsets for DoCoMo. In its turn, Panasonic decided to phase out its overseas 2.5G GSM mobile terminal operations and focus on the development of a global platform based on the Linux OS. If Motorola is going to create some kind of joint venture in Japan, it will be likely a vendor backing Linux OS.

Nokia tries to shoot two rabbits with one bullet
Nokia is a leading backer of Symbian OS for mobile handsets and its strategy to spread the technology across the globe. In Japan, Nokia is trying to grow by shipping Symbian handsets to DoCoMo, which encourages Nokia to do so. According to Nokia, “it’s not a broad portfolio strategy, but we’ll have some particular products that will support the Japanese market." Among Nokia's latest releases of handsets in Japan is the NM850iG (Nokia6630) model for DoCoMo's 3G service FOMA.

What bothers Nokia right now is its weak market position in the North America, especially in its CDMA segment. In quite a surprising move, Nokia announced a joint venture with Sanyo to make CDMA handsets for the global market. This is a win-win situation for Nokia as the joint venture will create opportunities to penetrate both the Japanese and North American markets. According to Wall Street Journal (WSJ), the combined operation is expected to control approximately 20% of the global CDMA market when it launches in the third quarter. “By signing the deal, Nokia's brand power as the world's biggest mobile-phone maker will be complemented by Sanyo's strength in the Japanese and the U.S. markets, company officials said. Also, the makers' strengths don't overlap because Nokia is strong in entry-level and mid-range CDMA handsets, while Sanyo is strong in high-end handsets, “ WSJ commented.

Wireless Week also questioned the consequences of this joint venture for Qualcomm:

“Besides the marriage for CDMA handsets, the joint venture raises the question about what role Qualcomm will play. Sanyo has been using Qualcomm's CDMA chips, while Nokia has used its own. Nokia and Qualcomm have been at odds over the years, with Nokia joining several other companies last fall in filing a complaint with the European Commission over alleged anti-competitive Qualcomm actions. “

However, it is possible that Nokia will abandon CDMA chipset business as Wireless Week provided a research note from Lehman Brothers:

“Lehman Brothers said in a research note that it expects Nokia to get out of the CDMA chipset business, leaving almost the entire market to Qualcomm. Nokia's CDMA chips have come from Texas Instruments. Lehman also said Nokia likely will have a slight minority share in the new company so it won't have to report the new company's profits and losses as part of Nokia's financials.”

These developments also should bring some value to Japan’s domestic handset makers as they can utilize the global marketing and distribution powers of Motorola and Nokia in order to re-enter and get a sizeable footprint in foreign markets as Japan’s market has no growth prospects any longer.

3D rendering engine MascotCapsule in 100m mobile devices

Japanese vendor of 3D rendering engine MascotCapsule HI Corp. announced that the number of portable devices, noteably handsets, carrying MascotCapsule had reached 100 million units.

MascotCapsule is a graphic rendering engine that displays 3D graphic data on device's screen. Its unique feature is the ability to run independent of device's operating system or hardware architecture. Mobile handsets on Java, BREW, Linux, PalmOS, Symbian - all will work with MascotCapsule.

MascotCapsule is also being used on other kinds of devices such as portable game systems, PDAs, digital cameras, and car navigation systems.

HI Corp. has licensing agreements with leading domestic carriers and handest manufacturers and numerous foreign players from US, Europe, Korea, and China to distribute MascotCapsule across different handset platforms. In the US, Sprint uses MascotCapsule to enable 3D applications on some of its handsets. Also, manufacturers such as Motorola, Samsung and Sony Ericsson equip their phones with MascotCapsule.

Source: HI Corp. via IT Media

Mobile Suica: 20,000 subscribers in one week

Credit: k-tai.impress.co.jp

According to Japan's train operator JR East, 20,000 train commuters subscribed for Mobile Suica service just in one week after the service was first launched in January 28 (before Mobile Suica there were Suica contactless payment cards). Offered by NTT DoCoMo, Mobile Suica allows Tokyo commuters to board trains by waving their phones over a sensor in turnstiles. The ability to pay for the subway ride by cellphone is one of the examples of the mobile wallet concept.

The concept of the mobile wallet is clearly defined by DoCoMo, which relies on this service as a potential booster for its revenues. The service is intended to replace not only money, but other items that usually reside in a wallet such as tickets and identification cards as well.

Meanwhile, in the U.S. Motorola is planning to market it's "M-Wallet" service, which allows shoppers to purchase products by waving their cell phone with an embedded chip over scanners at cash registers.

Eco handset - a real differentiator for NEC

It looks like the handset maker NEC together with Unitika company successfully completed their project on developing eco-friendly bio-plastic, which is 90% bioplant-based. The newly developed renewable plastic will be used for the body of the N701iECO handset model, to be sold by NTT DoCoMo in coming weeks.

Besides its nature-friendly characteristics the newly developed bio-plastic is raved for its high heat resistance and ruggedness, as the companies integrated fibers of Deccan hemp plant into the polyactic acid base, making it perfect for handset molding.

The move to use the eco-friendly material instead of traditional petroleum-derived plastic for handset molding is going to benefit NEC in a long-term as the company will have a head-start in developing alternative nature-friendly materials for handsets, a process that, as it can be easily predicted, will accelerate in future. Before rivals copy the technology, NEC should use its advancement to differentiate its products not only domestically but on a global scale too, as the marketing of eco-friendly handset has a huge potential for mass-market appeal.

3G service helps Japanese consumers to remotely control home electric appliances

What is a good way to increase the number of 3G lines for an operator in the nearly saturated market? NTT DoCoMo might have found the answer. At least, the wireless carrier decided to promote a gadget with a weird name Remocon Saucer that works with DoCoMo’s 3G phones to control up to eight home electric appliances from outside.

How it works?
Manufactured by Sugiyama Electron the Remocon Saucer uses infrared connectivity to turn on and off electric devices at home. To do that, users need to be subscribed to two DoCoMo FOMA phones – one to be connected via the headset jack to the saucer at home and the second one to make calls. While outside, the user can dial the number of the phone connected to the saucer at home and when the connection is established he can press the pre-programmed keys on his phone to switch on the air conditioner for example. Moreover, the user can initiate a video call and monitor the situation at home, making sure he really turned off that cattle on the stove.

The usage scenarios
The companies envision the following real-life usage scenarios:

• Before returning home, you can remotely switch on the air conditioner to warm up the apartment
• While on a lengthy business trip, you could create an impression that you never left the house by turning the lights on in the evening and getting the TV on. I bet this could come in handy for that kid from Home Alone movie.

Value
To sweeten the deal DoCoMo offers a discounted service plan, which is only 200 yen ($1.68) more expensive than the single line plan. The Remocon Saucer plan will cost 4,340 yen ($36) for two lines, including data communications. The saucer itself will come up with the 12,000-yen ($86) price tag.

To sum up, the service might be useful in some real-life situations and the price is attractive, but it lacks the practicality and mass-market appeal, thus it will have a limited uptake, targeting at niche segments. After all, it is a waste to keep a 3G handset sitting at home, doing some simple pre-programmed operations. They should equip the saucer with a camera and 3G chipset to do the work.

DoCoMo's Remocon Saucer Promotional Page

Podcasts for cellphones

Quest-Com announced the availability of RSS reader that delivers podcasts to mobile phones. The reader dubbed as RSS.eye is capable of dealing with multimedia files, including audio and video content. The reader is intended to be free for cellphone users. The company now offers it to NTT DoCoMo’s users of the following handsets:

• FOMA 902i/901i/900i/700i/701i Series
• mova 506i/505i/504i Series
• premini-II Series

Quest-Com also plans to release the RSS.eye versions for KDDI and Vodafone users later in 2006.

Business Model
Quest-Com sees businesses such as e-commerce portals or advertising agencies as its main clients. The company will act as a service provider and content aggregator for the businesses that wish to deliver multimedia content to their subscriber audiences. Quest-Com will aggregate the various feeds on its servers or it can provide a white label solution. Below are some business cases Quest-Com envisions for its potential customers:

• Online shopping portals – add product images to the product descriptions
• Mobile music portals – enable users to listen to song demos
• Cinema/ Concert portals – provide subscribers with video content such as movie trailers, interviews with stars, etc.
• Restaurants – send out coupons and discounts as downloadable images that can be presented on cell phone display at the entrance
• Advertising agents – ability to embed graphic or text banners into the RSS feeds

Vendor's site: Quest-Com

US mobile-marketing companies must learn from Japan’s experience

According to this article (subscription required) in Wall Street Journal, “advertising on cellphones is still in its infancy in the U.S.” and it will probably take a couple of years before the cellphone marketing campaigns will bring a real value.

But, right now marketing via cellphones is good to create a buzz instead of producing actual sales. Another trend the article mentions is that additionally to text messaging mobile advertisers begin to “test ads similar to those run on the Internet and TV” thanks to the improved technology. In comparison, the article provides an example of Japan’s maturity in mobile marketing campaigns:

In some Asian and European countries, cellphones have long been an attractive channel for marketers. D2 Communications, a mobile-marketing company partly owned by Japanese wireless company NTT DoCoMo Inc., has been delivering banner advertisements on cellphones since 2000. A banner occupies about a quarter of a phone screen, with commercial information scrolling automatically. D2 says that it runs 100 million to 150 million banners on cellphones a month, with 3% to 5% of viewers clicking on the ads.

List of Japan's mobile apps with potential for adoption in US

The NPD Group conducted survey of Japan's mobile phone consumers in order to uncover potential strategies for the US market. The research concludes that Japanese "use their mobile phones differently than Americans". In a nutshell, the main difference is in more extensive use of mobile data by Japanese than by Americans.

"76 percent of Japanese consumers use their phones for Web browsing, compared to just 12 percent in the U.S. market. "

There are many reasons why Japan is ahead at the wireless forefront and I had a recent blog dedicated to this topic. Also, John Sun at Mobile Analyst Watch made a nice comment about the NPD Group's findings:

"Although not mentioned, one of the key reasons mobile web browsing via the handset is so high in Japan is because home PCs are less common than in the U.S. For many Japanese, the cellphone is their primary Internet device, which might help explain some of the survey's findings... "

While the results of The NPD Group's survey may be of no surprise, at the same time they shed light on emerging mobile features that "display a strong growth potential for the consumer wireless market in the U.S."