WW-77

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J@pan Inc presents the Wireless Watch Japan Newsmagazine:

W I R E L E S S W A T C H J A P A N LITE

Commentary on the Business of Wireless in Japan
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Issue No. 77 (Lite Version)
Monday, October 21, 2002
Tokyo

+++ Noteworthy News
--> DoCoMo Suspends 3G Videophone Model Sales Due to Glitch
--> Matsushita Kotobuki to Offer Storage for 'Nancy Codec'
Cell-Phone Videos
--> Application Software Shown at 'FeliCa Fair'; 'Edy' Vending
Machine for Electronic Money Grabs Attention
--> Japan's YOY Mobile Phone Shipments Decline for 15
Consecutive Months

+++ Subscriber Statistics, Corrections, Credits, Administrivia

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+++ Noteworthy News
(Long URLs may break across two lines so copy to your browser.)

--> DoCoMo Suspends 3G Videophone Model Sales Due to Glitch
http://sg.biz.yahoo.com/021018/15/33vqb.html
Source: Dow Jones on Yahoo, Oct. 18

EXTRACT: NTT DoCoMo from Friday temporarily suspended sales of its 3G T2101V
video-enabled cell phone handset due to a technical glitch. The company
confirmed a software bug that sometimes prevents the reception of voice and
videophone calls and email messages when the screen is in energy-saving mode,
DoCoMo said. Since introducing the model on Sept. 27, DoCoMo has sold 1,640
units, the company said.

COMMENTARY: The company also announced that it would notify users via direct
mail when (free) replacement phones are ready. Apparently, if you cancel the
energy-saving mode to avoid this glitch, you'd end up with approximately 30
hours of continuous standby use.

Good images/info on T2101V here:
http://foma.nttdocomo.co.jp/english/catalog/term/t2101v_02.html
http://www.toshiba.co.jp/product/etsg/cmt/docomo/t2101v/t2101v_color.htm

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--> Matsushita Kotobuki to Offer Storage for 'Nancy Codec'
Cell-Phone Videos
http://neasia.nikkeibp.com/wcs/leaf?CID=onair/asabt/news/212282
Source: NEAsia Online, Oct. 18

EXTRACT: Matsushita Kotobuki Electronics Industries Co., Ltd. is ready to start
a service to store moving images taken by mobile-phone cameras on Web servers.
In Japan, the company already has been providing a service to store still
pictures on a server on the Web. Matsushita Kotobuki predicts the needs for the
video storage service will increase. Adopting the "Nancy Codec" video data
coding system originally developed by Office Noa Inc., Matsushita Kotobuki plans
to start operations first in the Chinese cell-phone market. For further
deployment, it will aim the business at other countries in Asia. The Nancy Codec
technology is due to be officially introduced to China Mobile Communications
Corp., the largest mobile carrier in China.

COMMENTARY: It appears that Matsushita Kotobuki will cooperate with Office Noa
to create an online video clip storage and format-conversion service so that
non-Nancy-codec-enabled cell phones can receive Nancy codec clips (as a series
of still images). This service, if it launches as planned, would be a
significant step towards creating 3rd-party mobile video services. J-Phone,
which has deployed Nancy as part of its Movie Sha-mail system, doesn't yet offer
anything like this. Most interesting may be the China connection; we hear Office
Noa chief Kajiki-san has been banking up the air miles lately with flights
to/from the Middle Kingdom.

BTW, I've tried video mail using the Nancy codec: it really works. And on 2G
too...

"Office Noa's Nancy technology may
be just the thing for video on the small screen"
http://www.japaninc.com/article.php?articleID=906

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======================================================================

--> Application Software Shown at 'FeliCa Fair'; 'Edy' Vending
Machine for Electronic Money Grabs Attention
http://neasia.nikkeibp.com/wcs/leaf?CID=onair/asabt/news/212037
Source: NEAsia Online, Oct. 17

EXTRACT: Sony Broadband Solutions Corp. held its "FeliCa Solution Fair," an
exhibit for introducing services using the non-contact IC card, "FeliCa," at
Gate City Osaki in Tokyo's Shinagawa Ward, from Oct. 9-10. The company put on
display application software for identifying individuals and making electronic
settlements with electronic money called "Edy," using employees' ID cards,
students' ID cards and members' ID cards based on FeliCa, and various systems
for issuing those cards. On the fair floor there were booths in array of 14
companies, such as Omron, Secom, Dai Nippon Printing, Toppan Printing, in
addition to Sony group's Sony Broadband Solution and Sony Finance International
Inc. and Bit Wallet, which is developing the Edy system.

COMMENTARY: Consider some of the applications displayed at the FeliCa Fair: Fuji
Denki Reiki had a new vending machine which enables customers to make payment
using Edy (via a panel); Sapporo city subway services had a FeliCa-based IC
ticket system; and Denso Wave displayed a concept mobile terminal (i.e. cell
phone) which has IC-card and bar-code reading capabilities. Students, company
employees -- anyone -- can recharge the terminal wherever they have an account
and where ever there is a compatible fixed terminal connected to a settlement
network (like those owned by debit & credit card providers, for example).
Although not present at this event, NTT DoCoMo is also working closely with the
BitWallent folks and their Edy contactless card system.

I think these sorts of application -- true e-money and e-payment schemes that
allow a cell phone to be used as a wallet -- represent one of the transition
points between the wireless Internet as a toy (albeit a hugely popular toy) and
the wireless Internet as a tool that everyone uses every single day -- even
granny. In a few years, teens will still be using i-mode to download idol pics
and ring tones -- but adults will be using wireless-enabled terminals to buy
BMWs and business-class tickets to LA.

This is the kind of thing that makes covering the mobile Internet in Japan so
damn interesting! ;-)

================================EVENTS===============================

>> THE BROADBANDING GLOBAL SUMMIT 2002
Focusing on the coming revolution in ubiquitous networks and their
global and social impact, this two-day event will bring together
Japan's top wireless, technology, and strategic thinkers from
industry, government, and academia, including:

** Masanobu Suzuki, President, NTT Communications
** Jeff Richardson, Director of Corporate Strategy, British Telecom
** Keiji Tachikawa, President, NTT DoCoMo
** Andrew Fried, Director, PWC Consulting
** Kiyoshi Mori, Director-General, Int'l. Affairs Dept., MPHPT
** Anna Gomez, Deputy Chief, International Bureau FCC (USA)

22-23 October 2002, Hotel Laforet, Shinagawa, Tokyo
Y225,000 per person, incl. documentation, luncheon, cocktail party
For registration info, access: http://www.meikikaku.co.jp/entry.pdf
or send mail to bbs2002hh@meikikaku.co.jp.
MEI Planning Co., Ltd. T: +813-5966-3210

>> IMMR Asia Field Visit 2002

Join a delegation of analysts and executives visiting leading
wireless companies in Japan and Korea Nov. 10-15, 2002.

IMMR is leading a delegation of senior executives and industry
analysts to visit leading wireless companies in Korea and Japan
next month (Nov. 10-15). Participants will learn how businesses
and consumers in these advanced markets are using wireless
applications, and better understand what operators and wireless
solution providers are doing to promote adoption and use. Several
spaces are available for interested participants.

During the week, the delegation will meet with executives at 15-20
leading wireless companies (operators, device manufacturers, content
providers, and others) as well as several leading experts on wireless
in Asia.

IMMR will also be preparing a summary of observations and
conclusions, and will share the report with interested parties.

More information at: http://www.immr.org/asiavisit.pdf
Send mail to: info@immr.org
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--> Japan's YOY Mobile Phone Shipments Decline for 15
Consecutive Months
http://neasia.nikkeibp.com/wcs/leaf?CID=onair/asabt/news/211423
Source: NEAsia Online, Oct. 15

EXTRACT: The Japan Electronic and Information Industries Association (JEITA)
announced the number of mobile phones (cellular phones, in-car phones and
personal handyphones) shipped to the Japanese market in August 2002. According
to JEITA's report, total shipments in August showed a 20.5 percent decrease to
3,331,000 units compared to the same month in 2001. It marked the 15th straight
month decrease on a year-on-year basis.

COMMENTARY: JEITA says dull demand for replacements is behind the decline in
shipments. Looks like Japan's long, dark economic stagnation is finally starting
to affect even -- Can it be? -- cell phone sales. Against this trend, there are
a couple of interesting points to note. First, in the 4-month period from 1
April to 6 August, sales of KDDI's much-ballyhooed CDMA 1X 3G handsets reached
about 1,645,000 -- that's 411,250 per month on average.

But sales of J-Phone's **2G** Sha-mail-enabled handsets more or less kept pace,
with a total of 1,617,600 being sold for a monthly average of 404,400. Would you
prefer a faster handset or one that can take pictures? Granted, several of the
new KDDI models have cameras as well, but my argument is that after a certain
point, speed doesn't matter as much as multimedia functionality.

Another point: shipments of PHS terminals are waaaay down, now at an
18-consecutive-month, YOY decline, at 73,000 units -- a whopping 64 percent
decrease over August 2001. Is this the end for PHS? Two factors in its favor:
data cards are still selling at least somewhat well, and PHS terminals continue
top be sold outside Japan (otherwise why would there still be 15 makers here
manufacturing the handsets?). See map at the link below for a list of countries
now using PHS:
http://www.phsmou.or.jp/worldwide/index.html

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+++ Subscriber Statistics, Corrections, Credits, Administrivia

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