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
Issue No. 165
Friday August 10, 2007
*****OUT NOW J@PAN INC MAGAZINE'S SUMMER ISSUE*****
Featuring our Real Estate Special, Web 2.0 Marketing and more!
Why did i-mode fail outside Japan? Was it really the
By Arjen van Blokand
A big surprise? KPN and O2 recently announced their plans to
out-phase i-mode. Dutch KPN Mobile was the first mobile carrier
to adapt i-mode in 2002. Its i-mode services launched with the
clam-shell NEC phone featuring a color screen and polyphonic
tones. The i-mode branding and business model, where official
content providers sell content and subscriptions through the
i-mode portal, were similar as in Japan. Other carriers followed.
Where did it go wrong? Many people in the wireless industry now
blame the walled garden approach. We believe more important
factors limited the uptake of i-mode.
In Europe, carriers do not control the complete mobile value
chain like the Japanese do at home where handsets can only be
introduced after a time-consuming and demanding evaluation. It
was clear that leading vendors Nokia and Samsung did not want to
bet solely on the success of i-mode. This resulted in a very
limited line-up of i-mode capable handsets. Japanese handset
vendors were not as popular as their Finnish and Korean
competitors. They furthermore lacked the independent retail
channels to sell their handsets to create the necessary scale to
support their overseas ventures.
Before i-mode was introduced outside Japan, content providers had
already set up off portal services in Europe. Consumers were
charged through premium SMS. Larger content providers easily
made money with this business and could grow through aggressive
advertising on TV and magazines. In order to become official
i-mode content providers, they had to undergo an annoying
evaluation process. There was simply no commercial driver for
them and the carriers to kill the revenue streams generated by
premium SMS services in favor of browser based services like
The marketing message for consumers was confusing showing the
lack of full commitment to i-mode. Carriers continued to push
WAP services as well. Later UMTS was positioned as the successor
of i-mode. Ridiculous as i-mode is a service that perfectly works
KPN's i-mode portal was the first of its kind in Europe and was
successful with more than 200 content providers. The model was
copied by Vodafone with its Live! services. In the quarter ending
June 30, Vodafone reported a messaging ARPU ratio in Europe of
13.9%, while pure data traffic ARPU was just 7.2%. Compare this
to DoCoMo where total data ARPU accounts for 32.3%.
Japan started with a walled garden to educate the market and keep
control of the value chain. Under pressure of content providers
and the authorities, DoCoMo gradually opened their closed model
and started to stimulate off-portal sites as well. Currently, the
most popular services are dating and social network working sites
with billions of page views per month. Business models changed
from monthly subscriptions to advertising. Although not under the
i-mode brand, Europe is heading in the same direction. Flat
packet fees are being introduced and free services and search
engines are becoming popular. The open mobile internet is around
the corner. Have the carriers missed their chance to become more
than a bit-pipe provider?
Japan's First Family Social Network is here! www.piqniq.jp
Are you raising a family in Japan? Do you speak English?
Would you like to meet other English speaking families in
your area? Piqniq is a Social Network Service tailored
specifically for you!
Our concept is "Families helping Families" and we invite
anyone that wants to meet other families, help other families,
or discuss family-related issues pertinent to life in Japan
to come and join the Piqniq today!
For more information: www.piqniq.jp
International Cricket Competition 15-17 September 2007
This is your invitation to three days of fun at an
international cricket tournament in Niseko being held to
the benefit of the Tyler Foundation for Childhood Cancer.
Cricketing legend Dennis Lillee will be attending the event
which is being co-hosted by the Higashiyama Prince Hotel and
includes two days of cricket, a golf match and charity
dinner dance and auction.
For more information, and the chance to win a
dinner with Dennis,