J@pan Inc Magazine Presents:
W I R E L E S S W A T C H
Commentary on the week's wireless news from Japan
Issue No. 9
Friday, May 25, 2001
+++ Viewpoint: Charging Content Providers a Big Mistake
+++ Noteworthy News
- J-Phone to Start Java Service (Update)
- NTT DoCoMo's Wireless Net Users to Get AOL Accounts in June
- NTT DoCoMo To Cut Email Receiving Rates
- Japan's NTT DoCoMo to Tackle Junk Email
- NTT DoCoMo to Let i-Mode Users Choose Addresses
- DoCoMo, Manx Admit They Were Wrong, But Can Other Carriers Avoid
+++ Worth a Read
Charging Content Providers a Big Mistake
This week, the Web site of San Francisco-based The Industry Standard
magazine carried a report by their European executive editor, James
Ledbetter, quoting a senior NTT DoCoMo official who said the operator
might begin charging content providers that wish to be carried on its
i-mode wireless service (URL below).
The report was based on comments the official, Kiyoyuki Tsujimura,
managing director of NTT DoCoMo's global business department, made
during an Economist conference in Stockholm on Monday. It cites
Tsujimura as acknowledging that DoCoMo is "still nervous, still
cautious about our relationship with content providers," and that
forcing them to pay "might hurt our relationship."
Still, the report said, Tsujimura insisted that i-mode has now grown
so powerful that it can afford to assert itself. He added, "You
should stay quiet regarding content providers until you have 20
million customers. It's a negotiation power game."
Readers of Wireless Watch, especially those who read Issue No. 8 last
week (which listed some of the key factors necessary for a wireless
Web to work -- anywhere), will understand the monumentally bad
implications that such a move, if true, would have for the continued
success of i-mode (and, conversely, the welcome boost it would give
to i-mode's competitors EZWeb and J-Sky).
Such a change would also negatively affect the prospects of the new
i-mode services in the US and Europe, where the battle to win the
hearts and minds of third-party content providers will be even
tougher than it was in Japan.
Here, at the dawn of the wireless Web, there was no bitterness
poisoning the atmosphere due to a recently-failed WAP launch like
there is in Europe (and to a lesser extent, the US) right now. And if
AT&T Wireless and the European i-mode carriers have understood the
reasons for i-mode's success in Japan, they'll know that building up
a critical mass of content, application, and service providers will
That'll be a tough challenge since few (if any) content providers
earned any revenue from their WAP service efforts, and we suspect
they will be highly reluctant to commit fresh resources to anything
that involves "wireless" and "Web" anytime soon -- even if it is
i-mode, and especially if they have to pay for the privilege of
In fact, the baby i-modes will have to bend over backwards to make it
exceedingly easy for local content partners to come on board, and
that includes eliminating or substantially reducing technological or
economic barriers to launching new i-mode sites. KPN in particular,
targeting a fall launch, should be actively setting up a developer
community, complete with tech-question mailing lists, an SDK
(software development kit) for download, and sample sites online for
perusal. When's the first developer conference?
There should also be a site targeting third-party business
development managers, with a Q&A list, a discussion forum, a
statement of how the billing system will work (with a firm commitment
to fix the i-mode commission to be no higher than the average credit
card commission charged by financial institutions in Holland), and a
partner policy statement containing listing standards and a firm
commitment to allow content providers to list for **free**.
Obviously, speculation by senior DoCoMo drones junketing in Europe
that partners may be billed is really unhelpful, and might help kill
the geese that lay the golden eggs before the laying even starts.
Despite the alarming portent of managing director Tsujimura's
speculation, we think it's just that -- speculation. At DoCoMo,
calmer heads that understand how the wireless Web works are likely to
head off any pressure from within to skew, and ultimately diminish,
i-mode revenues by billing content providers.
We queried our Deep Source at the Sanno Park Tower on how believable
Tsujimura's speculation might be. It turns out that Tsujimura was
likely offering his own opinion, not official wisdom. "Tsujimura-san,
of our global department, has nothing to do with i-mode's strategy,
and our team (which does) is *not** considering charging content
providers," says Deep Source.
I-Mode May Charge for Content, May 21
+++ Noteworthy News
(Long URLs may break across two lines.)
--> J-Phone to Start Java Service
Source: J-Phone, April 17
EXTRACT: The J-Phone Group (J-Phone East, Central, and West) will
launch Java capabilities on its J-Sky service starting in June. With
the planned addition, J-Sky will comprise mail, Web, J-Sky Station,
and Java. J-Phone's Java will conform to Sun's global standards --
the Connected Limited Device Configuration (CLDC) and Mobile
Information Device Profile (MIDP) -- and designers anywhere will be
able to freely develop Java apps for the service.
COMMENTARY: This news is already well known, but we wanted to provide
two quick updates. First, we had the chance to try out a pre-release
model of Sharp's new J-SH07 Java phone. What a beaut! It boasts a
65,536-color semi-translucent high-color TFT liquid crystal display
and a 110,000-pixel color CMOS digicam, and 16-voice polyphonic sound
is provided by a Yamaha MA-2 synthesizer chip (which sounds great).
Java apps, in particular games, can run at up to 130 x 120-pixel
display size, and the phone can store 375 Kb of mail onboard (that's
about 22 weeks' worth of Wireless Watch!).
While the service is set to debut later in June, we heard a rumor
from one of J-Phone's suppliers that the service might be delayed.
The reason? The operator may be reluctant to launch Java without
thoroughly testing the onboard environment so as to avoid the
expensive and embarrassing recalls DoCoMo has seen with its i-mode
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--> NTT DoCoMo's Wireless Net Users to Get AOL Accounts in June
Source: Bloomberg on CNETnews.com, May 21
EXTRACT: NTT DoCoMo said it will give i-mode subscribers access to
American Online's email service starting June 1.
COMMENTARY: Finally! The DoCoMo-AOL tie-up was originally announced
in August last year (URL for the J@pan Inc story is below), but very
little was said afterwards. The move will give i-mode's 23
million-plus users their own AOL screen name, enabling them to link
to AOL email service via their mobile handsets or personal computers
(PC access will be free for the first three months). The report said
the service will initially be limited to Japan, though it could be
introduced globally if successful.
We think this is a smooth move. Mail is one of the wireless Web's hot
spots, and linking AOL and i-mode mail will likely give a terrific
boost to AOL's Japan subscriber base, still much smaller than many
other ISPs. Notice that there's no word on giving **existing AOL
subscribers** i-mode phones... ;-)
(J@pan Inc story on DoCoMo-AOL tie-up:
--> NTT DoCoMo To Cut Email Receiving Rates
Source: Dow Jones on Yahoo, May 25
--> Japan's NTT DoCoMo to Tackle Junk E-mail
Source: Reuters on iWon.com, May 19
--> NTT DoCoMo to Let i-Mode Users Choose Addresses
Source: Bloomberg on CNETnews.com, May 18
EXTRACTS: All three stories relate to the spam and junk mail problem
on i-mode. The Dow Jones report mentions that the company received
42,000 complaints concerning spam in April alone, and will reduce the
fee for receiving (not sending) email. The iWon story says the
carrier has decided to allow subscribers to select their own email
addresses, rather than simply assigning the phone number as the
default address. It also mentions that much of the spam is related to
adult site ads or solicitations for "dating" services. The Bloomberg
story covers many of the same points as iWon's.
COMMENTARY: On some of the so-called dating services, women can sign
up for free to be introduced to men seeking dates, while the men have
to pay to send a message or post their contact info. There's no
confirmation on how billing is done, since none of the dating (deai)
sites are permitted onto the official portal. We heard that some site
operators ask the guys to register and pay through postal or bank
transfer, and then debit their account each time they use the
Ironically, i-mode users always have been able to change the default
email address (firstname.lastname@example.org), which is set prior to sale
based on the handset's telephone number. It's just that doing so
requires reading the manual and figuring out the procedure.
We guess that what DoCoMo will do now is add an extra step to the
sign-up process where the sales clerk will query the customer to
choose an address prior to walking out of the shop. Of course that
won't eliminate spam, but it will make it significantly harder for
the spammers to guess addresses.
We now offer Wireless Watch, Gadget Watch, and JIN -- three free,
weekly email newsletters. Keep up with the latest Japan-specific news
on technology innovation -- filtered for relevancy, annotated for
context, and hot off the presses.
To subscribe, access: http://www.japaninc.com/subscribe_news.html
--> DoCoMo, Manx Admit They Were Wrong, But Can Other Carriers
Avoid The Same Mistakes?
Source: Wireless Insider/Phillips Publishing International on
Northern Lights, May 21
EXTRACT: A really in-depth look at some of the issues surrounding
Manx Telecom's delayed 3G roll-out, and its implication for other
operators in other markets. "Unfortunately, a lot that goes into 3G
deployments is beyond carrier control," says Kelly Quinn, senior
analyst with Boston-based Aberdeen Group, an industry research firm.
"Carries (sic) are dealing with the compatibility of handsets, old
and new networks, the readiness of infrastructure vendors, all has to
be brought to market on time." Story ends up comparing the challenges
of 3G roll-out on W-CDMA versus CDMA 2000.
COMMENTARY: This is a great story and points out some of the
poorly-understood benefits of Qualcomm's CDMA technology. Upgrading
to higher-speed CDMA 2000 1X for current cdmaOne (term used in Japan)
operators is a much lower-cost proposition than building an entirely
new W-CDMA network.
Sprint PCS will be launching a (3G) CDMA 2000 1x service by mid-2002,
at a speed of 144 Kbps -- Japan's KDDI will do likewise, making the
EZWeb service one of the fastest around by the end of 2001. The story
According to Knox Briggs, an analyst with the Yankee Group,
the long line of players in the race have to be in sync with
rollouts. "It's important for the carrier and handset
manufacturer to work in tandem; it has to do with handsets
not being ready," Briggs says.
We'd strongly advise that the developer community (Java, wireless
information services, systems integrators for ecom and online trading
sites) be involved from the start as well.
+++ WORTH A READ
--> Doreen Vogel, a 25-year-old student in the Baltic Management
Studies program at the Fachhochschule (university) in Stralsund
(North-East Germany), has just finished her thesis, entitled
"Wireless Games: The Potential of Electronic Entertainment as a Key
Component of Mobile Business Strategies (May 2001)." Ms. Vogel's
executive summary states in part:
Through games, brand awareness can be increased. ...
[Games] help to guide consumer perception into the desired
direction by using a peripheral route, or central route
for building opinions. In general, users expect rewards
for success in a game, which may either be the prospect
of winning a prize or the fun entertainment itself. As
premium content, games add value to sites, attract
customers, and increase site stickiness. This creates
the basis for building customer loyalty. Mobile promotional
games add another channel to the marketing mix. They also
serve as mediators [to] support the replication of a brand
image between different advertising platforms and media.
... Well-conceptualized games may become viral marketing tools.
Last night, while preparing for a weekend trip to Aomori prefecture,
my wife and I wondered what kind of clothes to pack. It's getting
humid in Tokyo now, and up to 24C or 25C if the sun's out. But up
north? The Weathernews site on i-mode was quite handy, and told us:
11.3C to 21C today, 13C to 20C on Saturday (with 20 percent chance of
rain in the AM), and 10C to 18C on Sunday, with a 50 percent chance
of rain). We packed accordingly. Have a great weekend!
Written by Daniel Scuka (email@example.com)
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