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TechMom from Silicon Valley
I just came back from "Cellular 25" party in Chicago. The event marks the start of Wireless History Foundation, on the day that the first mobile phone service started in Chicago 25 years ago Oct. 13.
It was a fun night, with lots of industry insider attending (500 people). It was also encouraging for me that the foundation was headed by Arlene Harris, well-known female entrepreneur in wireless, and is backed by lots of women in the industry. They gave me lots of inspiration.
Michi
Wall Street Journal's Yukari Iwatani wrote an interesting article yesterday, regarding the slow sales pace of iPhone by Softbank Mobile in Japan.
WSJ article on iPhone 9/15/2008
The article was translated into Japanese and is getting lots of social bookmark and comments back in Japan.
I think what is to blame here is the outrageous media hype. Everything that is mentioned here is no secret to Japanese users and industry people. Before the release, media hyped that Apple is SO special that it WILL be a huge hit, even though you cannot use emoticons or one-seg (satellite TV) or mobile wallet or anything. It was just not the case. That is all.
iPhone is and will remain as a niche product, even though a sizable niche, in the U.S., Europe or in Japan.
U.S. soil was cultivated enough before iPhone release with smartphone market development after 2004. Japan did not have that background. People there are also used to using number keys for typing in text. They are already so fast in doing so, just as a fierce samurai with his quick sword skill, so they would rather not give up this habit and skill to flat, touch screen interface.
It will just take more time for learning curve in Japan. It is still too early to judge.
Michi
I am at CTIA - the mobile phone conference - in Las Vegas, and on Monday, there was a pre-show event called "Mobile Entertainment Live". I have been involved in the mobile contents industry for the past several years, and am quite disappointed that people are still complaining about the same things.
There was even a panel designed to "complain" all the problems that the contents providers face, repeating their same mantra to blame phone carriers, rights holders (such as music labels and movie studios) and everybody else.
In my eyes, though, they are missing an important point - "women".
I recently talked to a guy from RockYou, one of the top Facebook application providers, and he mentioned that their CEO reads teen girl's magazines to come up with new ideas, because they have the biggest "viral" power to spread their application. Sure enough, Web2.0 community understands it. So they are successful.
Even in Japan, the land of male-centric society, mobile contents industry has plethora of female entrepreneurs, most notably Tomoko Namba of DeNA (provider of ad-supported game/SNS service Mobaga Town) and Yoshimi Ogawa of Index (the pioneer of i-mode contents). And their main customers also are young women. They love to communicate, have fun together, and listen to their friends. Great customers for mobile contents.
Here at CTIA, in the US, the land of the free and where women are supposed to be better situated in business than their across-the-pacific neighbor, the place is just full of men. Women are often ignored both as providers and as customers, even in "that" mobile contents segment. They talk about sports, hip-hop and shooting games - so much focusing on 18-and-older male audience.
5 years, and nothing has changed. You guys just don't understand your potential customers. And that is the formula for failure. Stop complaining and do something about it.
Japan's industry people often criticize their own mobile industry "Galapagos". The largest carrier NTT DoCoMo chose their proprietary technology for 2G, and therefore became segregated from the rest of the world and the market developed in quite unique way, just like unique animals in Galapagos.
It turned out to be an obvious bad decision, so they have tried very hard to standardize their technology in 3G cellular. Yet, in 2.5GHz wireless broadband spectrum, they have made another "Galapagotizing" decision.
Yesterday, Ministry of Internal Affairs and Communication (MIC) decided to give 2.5GHz licenses to two groups, one headed by KDDI, utilizing WiMax, and another by WillCom with "Advanced PHS" technology.
In the 90's, NTT tried and failed to make PHS their home-grown technology to be used worldwide. It did make it to China and some other Asian countries as the cheap fixed wireless alternative, yet it is of very limited use compared to mobile phones.
PHS mostly failed, except for a so-so success by Willcom, with its data plan for PC card modem. So Willcom does have some expressed interest from its customers for the higher speed connection, but in the larger state of spectrum politics, it looks nothing but another try for Japan's home-grown technology again, with another risk of "Galapagotization".
Even KDDI's WiMax, whose consortium includes Intel - the largest backer of WiMax -, with the growing clouds over mobile WiMax initiative in the United States, may not be the sure bet. It is a shame to see Japan going further into the Galapagotization, just because it is too advanced and technology decision has to be made much earlier than the rest of the world.
I know that everyone wants to escape from Qualcomm's reign in CDMA monopoly world. Yes, I know it is politics. But I am still a bit concerned.
Originally posted on enotech.vox.com
Just learned these numbers. I am writing them down for my own memo, but interesting numbers...
1. Mobile handset share in Japan
Sharp 19.6% (up 4.4 points)
Panasonic 13.2% (down 2.9 points)
NEC 13.2% (down 2.4 points)
Background: Sharp was successful in their new "One-seg" phone from Softbank 905SH, with a rotatable screen. They named its mobile phones as "Aquos Keitai" to coincide with their LED TV sets, to emphasize their high-quality LED screens. They have 43.9% market share on LED TV as well. LED share is as follows:
Sharp 43.9%
Sony 18.0%
Panasonic 17.0%
Source: Nohon Keizai Shimbun
2. Mixi growth stops on the Web, continues on Mobile
http://www.itmedia.co.jp/news/articles/0707/31/news089.html
http://www.itmedia.co.jp/news/articles/0707/31/news069.html
Mixi has just exceeded 10mil. member number in May, but their page view on PC web is on decline, while its mobile PV is increasing. (below numbers from June 07)
PC web: 6.38bil. total (-7%), 607.0 per member (-19%)
Mobile: 5.27bil. total (+30%), 493.3 per member (+13%)
Accordingly, CEO Kenji Kasahara states that they are planning to introduce "Mobagei" type casual game and avatar functions, and opening its doors to minors (currently 18+ only).
Source: IT Media
NTT DoCoMo still has more than 50% market share in terms of the cummulative number of subscribers in Japan, but has been forced to sit at the second place in monthly subscriber acquisition number, after KDDI, for consecutive 10 months until April. May number was announced today, which was even more disappointing for DoCoMo - now they are at the bottom. Softbank (former Vodafone Japan) won the top position for the first time with 162,400 new subs, while KDDI got 138,500 and DoCoMo mere 82,700.
Source: TCA (English version)
DoCoMo started to run a new campaign called "DoCoMo 2.0" with the release of FOMA904i series, featuring several popular TV/movie celebs in its new TV CM, but that campaign is drawing a harsh criticizm in Japanese blogosphere, that there is no substance despite of its glitzy appearance. The only major new feature is that a user can load two phone numbers and two mobile mail address on one handset, so s/he can use one handset for both private and business use. Apparently, it was not appealing enough to convince people to come back to DoCoMo, after they are branded as the biggest loser in mobile number portability (MNP) battle that started last October in Japan. Looking at May figure, the campaign is even backfiring them.
Mr. Takeshi Natsuno, a flamboyant and charismatic figure of the DoCoMo's successful i-Mode team, was as confident as usual at the product launch event, but I am afraid his focus and DoCoMo's focus on the real needs of their users are getting blur right now.
I have lots of friends in DoCoMo, so I am really concerned that some of them may be now haunted by the ghost of old AT&T Wireless - not the new one that used to be Cingular, but the original one - which went under after the MNP was implemented in the U.S. I hope they get back on their focus before it is too late.
Another new and wacky service in Japanese mobile scene is making a big splash. I mean, HUGE splash. Huger than "Mobaga Town". This time, it is called "Kao Cheki" (means "face check-y") provided by J-Magic.
All you have to do is to take a photo of yourself with a camera phone, and send it over to "Kao Cheki" site. Then you get a message to your cell phone with the result of your face analysis - which celebrity (currently mostly actors/actresses) you look similar. According to a user blog, the analysis reads kinda like "you have 21% similarity to Tom Cruise"(!). The service is free to users.
The service started on April 26, 2007, and by one month later, the number of cummulative user reached 15 million. Japan's hottest mobile service "Mobaga Town" has 5 million registered users, and this 15 million is not a regular registered users, so they are different numbers, but still 15 million in one months is a HUGE number, even in Japanese standard. The service expanded virally through blogs, SNS and direct word of mouth.
The point here is that you can laugh at it with your friends. You can also interpret it in different ways. "Wow, I look like Tom Cruise!" or "But only 21%!" or "Well it is better than nothing" or whatever you like. It is no question a great topic generator in bars.
So, you might ask, it must be another horoscope with no scientific background, isn't it? Well, in fact, it isn't. The service use "Face Sensing Engine" developed by Oki Electric Industry - although to me, the results sound totally random.
J-Magic is currently expanding the celebrity face database to include more celebs in comedy, sports and others. They are also trying to come up with business model (sounds familiar?) by partnering with a mobile search company.
Source: CNET Japan
In Tokyo, Mixi is already yesterday's news. Just as in anywhere else, SNS fashion trend has already moved on to someone else. The talk on the street today is Mobaga (pronounced "mow-baa-gay" - short for "mobile game") Town.
Mobaga Town is a mobile-only SNS site that combines free games, customizable avatars, chats, customizable mails, etc., free to users and supported by advertisement, run by a company called DeNA. Sounds generic, doesn't it? Well, if you are a PC net user, it certainly does. Not in this little mobile town.
It started off as a teen-oriented free game + SNS site in February, 2006. According to Yuka Okada's interview with Isao Moriyasu, mobile business executive at DeNA, in last December for ITmedia News (and by the way, she usually writes great interview articles with IT people in Japan), Moriyasu believes that the key was "high-quality games" even though they are free, and "brand-new type service on mobile net" for mobile-only generation.
He says that PC users are accustomed to high quality games on PC, and SNS type services also are already commodities on PC. But in Japan, there are some 19 million users who only use mobile devices for net access, vs. 16 million PC-only users, and for these 19 million (mostly teen and early 20's), free high-quality games and SNS service were totally awakening experience.
Now Mobaga boasts over 5 million registered users, with increase of 1 million every other month pace, and 420 page views per day, according to company's 1st quarter financial announcement. DeNA has already recognized the limitation of teen-only market niche, and has expanded their target to wider young adult population in recent months, by adding more UGC-type applications, and looks like it is paying off; On Feb. 1, teens made up 62% of its users, but by May 10, teen portion has shrunk to 53%, and 20's/30's users increased from 38% to 47%.
On the same day, mixi also announced their user number, and it states 9.83 million users, still way ahead of Mobaga, but analysts and bloggers pose questions about the decrease of "active" users among them, and the pace of its growth, in comparison to Mobaga's spectacular momentum.
It may only be a special case in Japanese market environment, but certainly is an interesting case study of SNS market place.
No, I am not talking about breakfast menu. It is about mobile strategy.
I have always felt a bit awkward with the growth prediction of different segments of mobile industry by big-name industry consultants, such as Yankee Group, Gartner Group or Ovum. It applies to lots of things - handsets, smartphone, mobile music, mobile games, etc., etc., etc.
I recently realized that it is because their brains are European-flavored, while mine is totally American-oriented. Their clients seem to be mostly European companies, I don't know why, and naturally, their analytical framework is European-style.
When it comes to mobile, Europeans are standard-driven. All European (and most of the rest of the world) use GSM and its successors, so the handset vendors can have the economy of scale - but in other words, you have to be a big player to compete in this world. Common denominator way of data communication is SMS/messaging. None of the carrier has the majority power, so it is in a way democratic, but chaotic, as nobody is responsible about the compatibility. Major European vendors, Ericsson and Nokia, are in the center of this world. Those big-name consultants think that is the way the world should be, and individual company's strategy should be attuned to this wild West world. Among major American carriers, AT&T belongs to this camp.
On the other hand, another major US carrier Verizon has a different perspective of the world. There, Verizon stands at the center of the world, with a strong support by Qualcomm. They have created their own little ecosystem. It is based on CDMA and Brew, so the vendors can only sell this kind of handsets or service to Verizon, you have to follow their policy, and the entrance exam is as rigorous as Tokyo University. However, once you are admitted into that ecosystem club, they support you well, and pay you well. Verizon/Qualcomm team asks for higher prices from customers, but they promise the higher quality. Handset price competition is not as fierce here, and BREW ("GetItNow") service claims the highest share among mobile gaming. It is, in a way, "Apple iTunes + iPod" style ecosystem business model. You can be a small but nimble player and still can survive in this world. This strategy has become even more effective in recent years, when the wireless industry has been consolidated and Verizon has become the large portion of the US market. In Japan, the largest wireless carrier NTT DoCoMo has run the country in a similar way for a long time, although recently, they have been chased to the corner by another Verizon-style competitor KDDI.
In my mind, VZ-Apple style ecosystem is a great business strategy, with a higher and stable margin potential, as long as you can successfully execute it. It has some cost disadvantage, but can be justified by the higher margin. If you are a vendor to wireless carriers, it is a matter of which you choose and how you optimize yourself to each style.
So, if you are a small and nimble player, don't believe in big name wireless industry consultants. I mean, they are not lying or anything, but are only talking about the half of the reality.
So, you might ask, what about Sprint? Well, they are stuck in the swamp between the two world. That is only a small part of their problems, though.
This year's CTIA looks somewhat less flashy to me, with few big name keynotes and no major technological topic. Sure, the exhibit hall is huge and number of attendees will probably be the record, again. Carriers are profitable, hansets are sexier than ever. Things are good in the industry. Right?
The less flashy nature of the show may be simply because of consolidation of the industry. There are less number of large customers, so less actual business is generated in the show.
But seeing what has been going on in Japan, where wireless market is more saturated, I can't help but feeling it is the beginning of the end of the great wireless standard era.
Wireless remain the center pillar of the carriers for sometime in the future, but it won't be the growth engine in the developed countries anymore. That is not just due to the low growth on the number of subscribers. It is also due to the lack of major cost structure breakthrough in the network.
Periods of telecom bonanza have been always supported by the technological revolution that drastically reduce the cost of network. At&t breakup and internet boom were made possible by the advancement of fiber optic, and this current wireless era by digital transition.
Now the voice capacity per spectrum has pretty much hit the ceiling, and the high speed data is not cheap enough to satisfy the web2.0 crowd.
It has been 10 years since digital one rate that marked the digital transition in the us, and it should be the time to move on, but no major cost breakthrough is in sight.
I may be just a pessimist. I hope so. But I may have to prepare myself for the coming change.
