Disruptive technologies and competition to undermine the hegemony of NTT DoCoMo

Financial Times reports (January 25, 2007) that “DoCoMo is forecasting a small drop in operating profit this fiscal year.” There are several directions from which the giant feels uneasiness. First comes the number portability that sparkled a price war initiated by Softbank (ex-Vodafone). It also became clear that another DoCoMo’s rival – KDDI au was the biggest winner so far from number portability. Number portability combined with Japan’s traditional fat handset subsidies, of about $300-$350 a piece, alone could affect the profitability. To continue the list of disruptions, FT lists:

• Arrival of fixed/mobile convergence (meaning more bundling);
• Small operators bringing in Skype-type services; and
• Further regulatory changes.

The question remains whether operators such as NTT DoCoMo accept their utility-like (dumb pipe) status or successfully fight off the trend with counter measures. So far, the indications are that they are going for a big fight.

Mixi Mobile is getting one hundred million page views per day now

January 15 was quite remarkable for mixi Mobile – on that day the number of page views in one day hit one hundred million. According to mixi’s management, the measures such as enabling mobile messaging for all members, allowing invitations via sending out QR codes and implementation of new mobile site design, helped attract mobile users.

As a result the number of mixi Mobile members has reached 2.3 million in December 2006 and it is being increased on a twelve thousand new members per day rate. Below is a demographical profile of mixi Mobile’s user base:

Source: CNet Japan

IP Mobile in TD-CDMA E-R7 launch preparations

IP Mobile readies for commercial rollout in Japan its TD-CDMA E-R7 (Evolved Release 7) network with downlink theoretic capabilities of up to 42.2Mbps. The service is planned for autumn this year. Initially, IP Mobile will enable the downlink speed up to 10Mbps (with 2-3Mbps on average).

Source: k-tai.impress.co.jp

After Walkman and Cybershot next comes Bravia – the SO903iTV handset

Marketing people at Sony Ericsson did it again – they assigned Sony’s well-known consumer electronics brand to a cell phone. As DoCoMo expands its handset line-up with ‘one-seg’ terrestrial digital TV broadcasting compatible devices, Sony Ericsson introduces the SO903iTV model that is being marketed under the Bravia brand – a name more known for Sony’s flat-screen TVs. To give Sony Ericsson a credit, the Bravia handset bears more than just a TV-associated brand name – the handset actually spots the newly developed mobile Bravia engine that enhances the picture quality of one-seg TV. The phone should start shipping in June 2007.

Source: DoCoMo
Related article: Walkman: old brand gets new life in mobile world

Willcom sells W-ZEZO3 smartphone in package deal with Slingbox and Sky Perfect TV

While U.S. carriers are fearing that Slingbox or Orb will congest their networks with bandwidth-hungry live TV content streaming, Japanese PHS carrier Willcom teams up with Sky Perfect TV and Slingbox to offer its subscribers a package deal, containing Slingbox and Windows Mobile W-ZERO3 smartphone for JPY49,800 ($414). Besides the hardware discounts, Willcom offers an attractive monthly voice/data service plan for JPY3,950 ($33). If users exceed the allocated 12.2MB of data they will be automatically switched to unlimited data plan that costs JPY6,700 ($56). This measure will guarantee the maximum users would pay won't go over $56 dollars. Besides, the W-ZERo3 can connect to public hotspots via WiFi. The promotional campaign will run until February 15. And yes, you also need to be a customer of Sky Perfect TV.

Source: Willcom press release

KDDI au auction site hits 500,000 milestone

KDDI au auction site has finished 2006 with 500,000 subscribers, paying subscribers (JPY315/month). It took two years for KDDI to hit this milestone and before October 2006 the auction was strictly mobile-only. Now, it offers the PC version as well.

Source: IT Media

Mobile social network Mamasa targets at mommies

Mobile social networking market in Japan is undergoing further segmentation in pursuit of marketing opportunities. The latest example is the launch of Mamasa mobile website that identifies young mothers as its main audience. Mamasa’s founders - Kimuratan and Xavel.com - hope build a solid user base by encouraging members to share information regarding pregnancy, child rising, fashion and other questions through mobile blogging. Xavel.com, an operator of fashion website for young women girlswalker.com, plans to attract some of its 680,000 user base to start using Mamasa, while Kimuratan will team up with 170 stores across the country to promote the website. Below are some examples of girlswalker.com's mobile channels:

Maria Sharapova vs. Paris Hilton: who represents better Motorola?

It was a surprise for me to find out that Paris Hilton, not Maria Sharapova, was asked to attend the kick-off party for DoCoMo's M7o2iS handset a.k.a. Motorola Razr this December. Sure, both have a contract with Motorola to promote its products, but the choice of Paris Hilton after all that scandalous coverage in mass media raises some questions. Don't you think it might cast a shadow on DoCoMo and Motorola's image? Is it only me or, indeed, after seeing Paris Hilton holding Motorola you stop wanting to own the Razr? And, common, we all know Paris Hilton is an avid Sidekick user. Anyway, I think Maria is much more popular in Japan. And if you're wondering what model she holds, it is M100.

Can Goliath MySpace defeat David Mixi?

As MySpace seeks to penetrate Japan's market by teaming up with Softbank, Mixi is confident it won't be affected much by this move. According to Financial Times' article (Dec.6, 2006), Mixi starts targeting Japan's baby boomers to expand its user base, whose 80% is now constituted of subscribers aged between 20 and 34. The invitation only social networking site Mixi is a dominant player in Japan recruiting under its banner more than 6.5 million users who have created 900,000 online communities. It ranks only second after Yahoo in popularity in Japan.

The confidence of Mixi management is based on the fact that "about 6.8m Japanese will celebrate their 60th birthdays over the next three years." Based on market researches and survey data, Mixi thinks newly retired people will become active members of its network by uploading travel pictures and writing "blog-style" diaries and participating or organizing online communities that can range from "sky watching" to "love of sleep" interests.

Besides being "demographically removed from the average user of MySpace", Mixi has other unique features that make it very attractive to Japanese users. First of all, it is mobile-friendly, with 2bn hits coming from cell phones and only 750m from PC users. For comparison, about 1.4 million mobile customers logged onto MySpace using the wireless Web in September 2006, according to Telephia. Obviously, to succeed, MySpace needs to address the mobile internet and has a fully-functional mobile version available to members of all Japanese mobile operators. Instead, MySpace announced the launch of localized PC version in March 2007, while it is not clear whether the mobile version will also be operational at that time. Additionally, the partnership with Softbank assumes the exclusivity of the offering to Softbank's mobile users, while Mixi is open to all cellphone users with Internet access. Among other lacking features of MySpace is the invitation only nature of Mixi that appeals to Japanese users who cherish the sense of privacy and exclusivity. It is yet to be seen but there is a big chance that MySpace will repeat the negative experience of eBay and other many global brands of entering Japan market if it won't learn about the local market.

NEC intros Windows Media Player and iTunes compatible music chipset

NEC Electronic announced the start of sample shipments of its newly developed music LSI AP131 for mobile phones. The company plans to keep the output of one million chipsets per month in 2007. The new AP131 LSI accommodates music playing CPU and DSP on its board and adds support for WMV (ASF) and MP (MP4, M4A, 3GP, 3G2). The previous version of this product the μPD99910 had only support for SD-Audio (MP3, AAC) format. NEC achieved a 15% power efficiency in the AP131 when compared with the similar offerings on the market and claims the non-stop playback time has increased to 60 hours from 50 hours on previous products. The AP131 seamlessly integrates with the handset baseband LSI without the need to make changes to baseband LSI. The AP131 product portfolio includes three processors based on their functionality: μPD99911, μPD99912, and μPD99913. NEC is asking 1,000 yen for a sample.

Source: NEC

Apple’s iPhone to hit Japan market in 2008?

Apple indicated it is going to offer iPhone in Asia in 2008. Steve Jobs didn’t name any specific countries, but it looks like the first candidates for the iPhone launch are going to be either Japan or South Korea in the Asia Pacific region. Taking into account the hefty price of the iPhone, it is obvious that only mature markets such as Japan and Korea can afford it. Don’t forget about the dominant position of iPod and iTunes in Japan. Apple just needs to add the UMTS support for its iPhone to sell in Japan as GSM is useless here.