WW-104 -- NTT DoCoMo launches new music service next month; Will this mean competition for its ringtone providers?

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J@pan Inc presents the Wireless Watch Newsletter:

W I R E L E S S W A T C H

Commentary on the Business of Wireless in Japan
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Wireless Watch Newsletter
Commentary on the Business of Wireless in Japan
Issue No. 104, Tokyo, Monday, August 25, 2003

Subscribe for FREE:
http://www.japaninc.com/newsletters/index.html?list=ww

CONTENTS

++ Viewpoint: NTT DoCoMo launches new music service next month;
Will this mean competition for its ringtone providers?

++ Noteworthy News:
-- Disappointing growth figures for KPN's i-mode services
in Europe

=============== EVENT =====================
GARTNER'S SYMPOSIUM/ITXPO 2003
Date: Nov. 19-21, 2003
Location: Le Meridien Grand Pacific (Odaiba, Tokyo)

Business today is all about reducing time, increasing speed, and
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Keeping up - and looking ahead - is your challenge and our strength.
Join over 2500 senior IT decision makers to hear Gartner's leading
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View complete Symposium information at:
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SAVE 20% for delegates who register by August 29.
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++ Viewpoint: NTT DoCoMo launches new music service next month;
Will this mean competition for its ringtone providers?

Downloadable ringtones are a big money maker in the mobile industry.
Several Japanese ringtone services have more than 1 million monthly
subscribers.

In Korea, a new music service concept called "Ring Back Tone"
was introduced last year by SK Telecom. Usually when you call
someone, you hear the classic "ring ring" in your earpiece
while waiting for that someone to answer the phone. But the Korean
carrier has introduced a service whereby the subscriber can select
a music clip that the caller hears until the call is answered.

"Ring Back Tone" differs from download services because it resides
exclusively within the network. The service is now even more
successful than downloadable ringtone sites. Within 10 months of
its launch, over 8 million people were using "Ring Back Tone"
-- representing a 25 percent market penetration.

DoCoMo has adopted the "Ring Back Tone" service and will launch it
next month (September 2003) as "Melody Call." For 200 yen per month,
users can select three melodies from 3000 popular songs. The maximum
duration of each music clip is 15 seconds. Subscribers to "Melody Call"
need to register the phone numbers of callers who will have access to
the clip(s). Up to 30 phone numbers can be registered -- but only
other DoCoMo phone numbers are eligible.

DoCoMo expects to attract 2 million subscribers by the end of the year.
They have established a Web site to promote the service on which users
can search for available melodies and view a list of the most popular
songs.

Apparently DoCoMo wants to tap into the lucrative mobile music market,
though the company has no plans, yet, to "open" the service for its
ringtone download providers. Altough "Melody Call" does not directly
compete with these ringtone content providers, there is a chance that
their users will spend less on downloadable ringtones.

There are also other concerns for "Melody Call." The majority of DoCoMo's
customers are still using PDC. In comparison with GSM, the voice quality
of PDC remains inferior. Since the melody will be played in "voice mode,"
the quality might be disappointing for those expecting HiFi sound. With
FOMA, the sound quality will be better.

Another limitation is that the sevice is only accessible to DoCoMo
subscribers. As the service resides in the network, cooperation with
J-Phone and KDDI will be necessary to guarantee interoperability. As
we expect "Melody Call" to become very successful, watch for J-Phone
and KDDI to rapidly deploy similar services that will ensure
interoperability with "Melody Call."

-- Arjen van Blokland

Source:
http://www.nttdocomo.com/home.html

Link:
"Japan's Mobile Internet Roars Back" from our July issue
http://www.japaninc.com/article.php?articleID=1143

===================EVENT===================
SECOND COST CUTTING STRATEGIES SEMINAR FOR FOREIGN
MANAGERS IN JAPAN

Date: Sept. 19, 2003
Location: JETRO BSC Hall, Akasaka Twin Tower Main Building
Organized by: LINC Media Inc., Japan Inc. Communications KK
(publisher of J@pan Inc magazine) and the Shizuoka
Prefectural Government. We are pleased to present the second
of our ongoing program of cost cutting seminars for foreign
managers. Our keynote speaker is Mr. Andrew Fried, a
partner with IBM Business Consulting (previously PwC).

View complete Seminar information at: http://www.japan.com/shizuoka/
Registration fee: free of charge
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===================EVENT ==================
The Entrepreneur Association of Tokyo - Our September seminar will
feature Caroline Pover, founder of Alexandra Press, Being A Broad,
and Go Girls, and Yuriko Miyazaki, founder of Krene Inc and vice president
of Go Girls. Both will be sharing their experiences on starting businesses
in Japan and how they overcame the obstacles that stood in their way.

Date: Tuesday September 9th, City Club of Tokyo Maple Room
(Canadian Embassy Complex) Language English
http://www.ea-tokyo.com E-mail: info@ea-tokyo.com
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++ NOTEWORTHY NEWS
(Long URLs may break across two lines, so copy to your browser.)

** Disappointing growth figures for KPN's i-mode services in Europe

In Brief: Last week, DoCoMo's European i-mode partner, KPN, announced its
second quarter results. At the end of June, KPN had 353,000 i-mode customers
in the Netherlands, Germany and Belgium. In the Netherlands, KPN's home
base, the number of i-mode subscribers grew by 11,000 in the three months
ending in June, while in Germany, E-Plus registered 41,000 new i-mode
customers. Last Friday, in a separate press release, KPN announced that
i-mode growth was accelerating -- and that it had signed up 400,000
customers.

Commentary: Even though growth is accelerating according to KPN, these
results are rather disappointing. KPN faces stiff competition in its markets
from Vodafone and T-Mobile. Notwithstanding these results, KPN maintains
its target forecast of 1 million i-mode customers by the end of December.
Last year, it reached its target of 100,000 by giving away i-mode phones
and services for free -- a strategy that will be quite expensive to repeat
this year.

Link:
http://www.kpn-corporate.com/eng/pers/index.php?id=2.01&taal=eng

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STAFF
Written by Arjen van Blokland; edited by the
J@pan Inc staff (editors@japaninc.com)

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