WW-12 -- Stupid Browser Phone Tricks

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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
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Issue No. 12
Friday, June 15, 2001
Tokyo

INDEX
+++ Viewpoint: Stupid Browser Phone Tricks
+++ Noteworthy News
- Cash-strapped Japan Eyes Spectrum Auction
- J-Phone to Spend $5.74 billion on 3G
- DoCoMo to Replace 1,400 3G phones
- Access Develops Web Browser for Sharp Linux PDA
+++ Worth a Read
+++ P.S.

<----------------------------ANNOUNCEMENT----------------------------

Wireless Watch Publication Day Changes

This will be the last Friday for Wireless Watch. Starting with issue
No. 13, on June 25, Wireless Watch will appear on the Monday of each
week at approximately 18:00 JST.

Next Friday (June 22), there will be no issue.

-------------------------------------------------------------------->

+++ VIEWPOINT
Stupid Browser Phone Tricks

On PCs, viruses can do anything from the faintly annoying to the
grievously destructive -- and we're talking evil, Hannibal
Lecter-level stuff here. Last week, a Tokyo colleague was hit by
W32.Magistr.24876@mm. This sadistic little beast can delete files,
erase the computers' BIOS (rendering the machine unstartable),
overwrite every 25th file with the text "YOUARESHIT" as many times as
it will fit in the file, delete every other file it finds, and
overwrite an entire sector of the hard disk -- and that's just for
starters.

There are no browser phone viruses that can cause device
destruction on this scale (that we know of), but as the keitai
software environment becomes more sophisticated (see the special
preview of "Hard Cell" mentioned below) the possibility of a really
vicious virus emerging in the mobile Internet realm increases every
day.

In the meantime, however, Japanese Web-enabled phones have already
proven to be susceptible to at least several annoying pranks that
hover on the teenage-boys-in-the-locker-room level of sophistication.
While these stupid browser phone tricks don't cause any direct
destruction of onboard data (some handsets, particularly Java-enabled
models, can do that all by themselves -- see Wireless Watch No. 11),
cellphones are connected to the country's telephone network, opening
up tremendous possibilities for prank calling.

Last summer there was a series of incidents in which DoCoMo i-mode
users received hoax email messages inviting the subscriber to click
on a "tel:" link, which automatically dials the number embedded in
the link. While the linked number was displayed innocuously
(something like: Takahashi's Sushi Delivery, "03-3499-2099"), the
link was actually coded to dial 110 or 119, Japan's nationwide
emergency services numbers.

The hoax resulted in a flood of calls to the emergency line, since
there was no way the user could tell beforehand which number the
phone was actually going to dial. In September 2000, DoCoMo said it
would upgrade i-mode handset software to prompt the user by
displaying the number actually about to be dialed and asking for
confirmation ("Click confirm to dial 119, cancel to return to
browsing"). Since December 2000, all models have implemented this
fix, but older ones missed it and they still allow users to
unwittingly click on malicious messages or booby-trapped Web sites.

We didn't hear too much more about this afterwards, but it appears
the prank, like the stench of last weekend's half-eaten bento lunch,
won't go away. This time, however, pranksters have figured out how to
make the phone call out **automatically** upon the receipt and
opening of an email (the user doesn't even have to click on a link),
and the phone can also be made to automatically send email in the
user's name, or the screen can be made to freeze up. According to
DoCoMo, the first complaints from users were received on May 23 and
confirmed on May 24.

On Wednesday this week, the company issued a release (see link below)
explaining the problem. The Nishinippon Shimbun reported that 12
different handset models produced by five different makers (NEC,
Fujitsu, Mitsubishi, Sony, and Matsushita) suffer from the auto-dial
problem, while the auto-mail problem affects six models from two
makers (Fujitsu and Sony).

The operator, which stated that the problems are "not a defect with
the software," issued the following warning in the press release (it
also said the problem would be fixed in new handsets from July on):

1. Do not open email from unknown senders.
2. If the mobile phone starts to dial a third party automatically,
push the "Stop (power)" button.
3. If the mobile phone starts to send email to third parties
automatically, push the "Clear" button.
4. If the mobile phone's screen freezes, remove the battery, reinsert
it, and then restart the handset.

While still not on the level of W32.Magistr.24876@mm, the most recent
cellphone pranks appear to have the potential to flood the country's
emergency numbers with sufficient calls to swamp out genuine
emergencies.

Further, what else can a celly be remotely prompted to do in the
absence of owner intervention? Can a phone be triggered into calling
for-toll services, and running up a huge voice bill, or tricked into
repeatedly accessing a wireless Web site, pushing the subscriber's
packet fees into the stratosphere? Maybe we're about to see the first
"i-mud.InflaTTR.@bomb" virus -- designed to inflate the victim's
phone bill? And who can the victim sue? DoCoMo? The handset maker?

Interestingly, so far, the mischief has been caused largely by
fooling owners, which appears pretty easy to do. "Some users [are]
still using older phones; some are pretty much confused if they get
an email from somebody stating that they have to click there for
confirmation of whatever -- and they just follow this advice,
especially if it looks important or official," wrote wireless
developer Juergen Specht in one mail list posting.

He adds, "Since I just finished an i-mode usability test with an
unprepared Japanese beta tester, I can confirm that some people are
pretty easy to scare ("I made something wrong!"), to confuse ("I
don't get it, where do I have to click?") or to push into actions
they normally would not do ("Call here for the confirmation of
your action!").

Looks like the challenge for mobile operators, content providers, and
wireless developers alike will be to make the phones and wireless Web
sites not just easy to use but harmless to use as well.

--Daniel Scuka

Link to DoCoMo prank problem press release:
http://www.nttdocomo.com/new/contents/01/whatnew0613.html

Translation of Nishinippon Shimbun story:
http://www.mobilemediajapan.com/imalice.html

Juergen Specht original posting:
http://www.appelsiini.net/keitai-l/archives/2001-06/0123.html

<----------------------------ANNOUNCEMENT----------------------------

For Wireless Watch readers who subscribe to J@pan Inc!
Special early preview of J@pan Inc's July feature article:

Hard Cell
http://www.japaninc.net/mag/sub/2001/07/jul01_hard.html

Japan's cellphone giants are about to conquer the planet, right?
Wrong. We're not talkin' boomboxes and Walkmans here, and software
integration and internationalization are serious barriers.

-------------------------------------------------------------------->

+++ Noteworthy News
(Long URLs may break across two lines.)

--> Cash-strapped Japan Eyes Spectrum Auction
http://sg.biz.yahoo.com/010612/3/vonu.html
Source: Reuters on Yahoo, June 12

EXTRACT: The Japanese government, deeply indebted but unable to raise
taxes amid an economic slowdown, is looking to sell radio spectrum
via auction to put its finances back in shape, the finance minister
said on Tuesday. "It's a new idea that we are looking at with
interest," Finance Minister Masajuro Shiokawa said in the Diet.

COMMENTARY: It's tough to see how the government -- no matter how
strapped for cash -- could capitalize on the new 3G system spectrum,
since frequency allocations have already been given away to the three
licensees via a process that wasn't even billed as a beauty contest.

The government simply decided which operators were capable of rolling
out successful services, and allocated the licensees by central fiat.
The 1999 allocation caused a major realignment of the then-existing
operators (DoCoMo, DDI, IDO, Digital Phone, Digital Tu-Ka, Tu-Ka
Phone, KDD, and others) into the three major groups competing today
(DoCoMo, J-Phone, and KDDI).

Further, the entire process of spectrum allocation in this country is
tightly (and non-transparently) managed by the government, and
opening up the process for bidding would inject an unhealthy degree
of competition into the market. (In any case, DoCoMo reported FY2000
profits of JPY365.5 billion, so it could probably outbid anyone else
every time.)

Also, the market itself would likely not support such a move: The
telecom sector was the second-worst performer on the TSE on Tuesday
-- the day the finance minister made his remarks.

--> J-Phone to Spend $5.74 billion on 3G
http://telecomasia.net/dailystories/2001/06-2001/14062001/jphone.html
Source: Telecom Asia, June 14

EXTRACT: Japan's No. 3 operator, J-Phone, plans to spend JPY700
billion ($5.74 billion) on its 3G roll-out next year, according to a
senior company official. J-Phone originally intended to launch its 3G
service at the end of this year, but has pushed back the commercial
launch date to June 2002. "Our original schedule was based on the
September version of the 3G specification," said the official. "Then
another version came out in December, so in order to keep to the
global standard, we decided to put back our launch date." He also
said that customer spending will remain about the same as at present
due to the spending power of its main target market segment -- teens
and youths. "There will be a limit to how much they can spend," he
added.

COMMENTARY: J-Phone's average revenue per user (ARPU) is
JPY7,000-8,000 per month. About 10 percent of the operator's revenue
comes from wireless data services (J-Sky) and messaging. Data traffic
is fast approaching 50 percent of traffic on the company's network.

We're not too certain that J-Phone has any better idea of what mix of
3G services consumers will pay for (and at what price point) than
DoCoMo does. Let's assume that next June, they've got 7,741,470 J-Sky
subscribers (that's 10 percent more than this month's approximately
7,037,700 subscribers), and let's assume 5 percent subscriber growth
per year and no growth in data revenues. If you do the calculation
under this scenario, you'll find that in each of the 10 years, head
count and revenue are as follows:

Year Subscribers Revenue
Jun-02 7741470 69,673,230,000
Jun-03 8128543 73,156,891,500
Jun-04 8534970 76,814,736,075
Jun-05 8961719 80,655,472,879
Jun-06 9409805 84,688,246,523
Jun-07 9880295 88,922,658,849
Jun-08 10374310 93,368,791,791
Jun-09 10893025 98,037,231,381
Jun-10 11437676 102,939,092,950
Jun-11 12009560 108,086,047,597
Total 876,342,399,545

This exceeds the JPY700,000,000,000 capex cost by JPY176,342,399,545,
for a ROI of some 125 percent over the 10 years. Not too bad! Now, if
the operator can also boost average data revenue per user (remember,
the calculation above assumed no growth in this), there could be some
really healthy revenues flowing into J-Phone's coffers. There are
also rumors this week about J-Phone being spun off from parent Japan
Telecom. Is it time to buy J-Phone stock? Keep reading ...

<----------------------------ANNOUNCEMENT----------------------------

We're on the Air!

The BBC recently interviewed J@pan Inc about 3G. See Editor at Large
Daniel Scuka online at:
http://www.bbcworld.com/Content/clickonline/week22_2001/click_one.asp

-------------------------------------------------------------------->

--> DoCoMo to Replace 1,400 3G phones
http://sg.news.yahoo.com/010615/3/xmsx.html
Source: Reuters on Yahoo, June 15

EXTRACT: NTT DoCoMo said today it plans to recall 1,400 3G mobile
handsets made by NEC (FOMA N2001 model) to upgrade them. "We are
replacing handsets to improve their function, not because of
technical problems," said Takumi Suzuki, a DoCoMo spokesman. The
company did not say when the handsets would be replaced.

COMMENTARY: Stop! Don't buy J-Phone stock -- if DoCoMo can't get the
manufacturers to field stable 3G handsets for its network, there's
not much likelihood that J-Phone will.

With this recall, NEC joins the ranks of Sony and Matsushita, which
have both suffered recalls of their 2.5G Java-enabled i-mode handsets
in recent months. NEC's handsets were also recalled in April from the
UK Isle of Man, where BT subsidiary Manx Telecom had to delay rollout
of its 3G network due to (presumably similar) buggy handsets.

After reading the special preview release of the J@pan Inc July
feature article "Hard Cell" (subscribers can access via link above),
ask yourself if handset software problems are not becoming even more
pervasive. On the other hand, maybe the ever-growing technical and PR
disasters will prompt the Japanese handset makers to get really
serious about something they've never had to get serious about:
systems integration. We think the problems will get worse before they
get better.

--> Access Develops Web Browser for Sharp Linux PDA
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=onair/asabt/moren/132861
Source: Nikkei AsiaBizTech, June 14

EXTRACT: Access, developer of Web browsers for mobile phones and
other portable devices, said it has completed a prototype browser for
the Linux-based PDA that Sharp is planning to market overseas. The
prototype browser is based on Access' NetFront v2.6 for Linux, one of
the microbrowsers that Access already markets.

COMMENTARY: In addition to using JavaScript and cookies, the browser
also has a client-side common gateway interface (CGI) function,
meaning that it works largely like Netscape or Internet Explorer on a
desktop PC (and can download and run scripts that enable
functionality like database access, etc.).

With further development work, the Linux browser will handle secure
socket layer (SSL) security, additional language character sets, and
plug-ins (for Flash animation? RealPlayer audio?). The browser will
appear on Sharp's Zaurus Linux PDA due, to be shipped to the US and
Europe in the fall of this year.

We have to admit a certain degree of admiration for Access. They're
small but smart, and they're having a tough time getting their
microbrowser software overseas (one version is on Nintendo's
Gameboy). There's no word yet on which distribution of Linux the PDA
will use, but presumably Access is talking to additional (US?) Linux
houses (Red Hat, etc.) to port versions of the newly Linux-compatible
browser to their distributions.

<---------------------------ANNOUNCEMENT----------------------------

More wireless coverage from J@pan Inc!

These wireless articles from the May issue of JI are now available:

Sign of the Times
A wireless advertising experiment offers shops and restaurants a
new way to attract passersby.

Top 20 Keywords: i-mode vs. Web
The top keyword searches done by i-mode surfers differ significantly
from those done by regular Web surfers.

Keitai vs. Game Handhelds
The cellphone wants to be a gaming platform. The makers of handheld
game machines are reacting accordingly.

Toru Arakawa: Small-Time Visionary
When he launched Access about two decades ago, CEO Toru Arakawa knew
that today we'd be living, working, and playing through small, Net-
connected devices. Now he's a star of the small screen.

See the full table of contents at:
http://www.japaninc.net/mag/2001/toc/may01_issue.html

------------------------------------------------------------------->

+++ WORTH A READ

The Way of the Mobile Warrior
Japan's mobile Web operators have important lessons for their
counterparts elsewhere on how to make profits, including this rule:
Give customers what they want. DoCoMo promises to teach those playing
catch-up a lesson: "We will give a lesson to our partners in the US
and Europe," Keiji Tachikawa, president of DoCoMo, told a press
conference in Tokyo in April. "We focus on services that will be
accepted as fast as possible. We are trailblazing." This piece is an
excellent grounder on how i-mode can work elsewhere (which it can),
and what the formula for success comprises.

Far Eastern Economic Review
(http://www.feer.com/_0106_21/p046innov.html)

+++ P.S.

Stopped into Andersen's cafe and bakery in Omotesando on my way to
work on this rainy Tokyo Friday morning. Andersen's has to serve one
of Tokyo's best breakfasts! The continental menu (JPY600 -- about
five bucks) consists of coffee or tea and an unlimited helping from a
basket filled to the brim with fresh, made-on-the-premises
croissants, various breads, and pastries. There's a small dish of
jams and marmalades on the table, and they heat up the little
oshibori towelette. The waitresses make a point of visiting your
table at least twice again to offer refills on drinks and breads.
It's peaceful, the background music is mellow 80s, and a tip is
neither expected nor required. --DGS

(Andersen's is directly across from the Fuji Bank and diagonally
across from the police box at Omotesando crossing.)

====================================================================
STAFF
Written by Daniel Scuka (daniel@japaninc.com)

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