WW-91 -- Korea, Japan, Pastel-Hued PDAs, and Tokyo's Good 'ol Days are Back

Wireless Watch Japan Mail Magazine
Commentary on the Business of Wireless in Japan
Issue No. 91, Tokyo, Tuesday, March 4, 2003
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Tokyo's HI Corp. has spun up Japan's keitai scene with its 3D-graphics rendering
software. Initially deployed by J-Phone, the Mascot Capsule engine is now in
service with DoCoMo and KDDI, and HI has its sights set on - where else -
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in this issue
---------------------------------------------------------------------

++ Viewpoint: Korea, Japan, Pastel-Hued PDAs, and Tokyo's Good 'ol Days are Back

++ Wireless Notes:
** Previewing Content - Japan: Sometimes, US: No
** New BREW Handset - Toshiba A5304T ;-(

++ Noteworthy news:
--> DoCoMo Plans Flat-rate Mobile Web Access Service
--> Online News in Japan: Popular, but Not Profitable
--> J-Phone Launches "Loco Guide" Location-based Portal
--> DoCoMo Adds Flash to Phones
--> Wireless Surprise: In Japan and Korea, Mobile Content is Making Money

++ Events (promotion):
>> EMERALD (IRISH) BALL, March 7
>> SECOND ROUNDTABLE ON BRANDING IN JAPAN May 28

++ Sign of the times:
"48.8% of Homes Have Net-capable Devices: Ministry"

++ Subscriber statistics, corrections, credits, administrivia

----------------------------------

++ Viewpoint: Korea, Japan, Pastel-Hued PDAs, and Tokyo's Good 'ol Days are Back

The last News Item in today's newsletter (see "Wireless Surprise: In Japan and
Korea, Mobile Content is Making Money" below) is an interesting story and well
worth reading in its entirety (see additional commentary after the extract).
There's a growing amount of interaction and seeding between the Japanese and
Korean wireless space, and it's going to become more difficult if not impossible
for me to brag that Japan - and, by extension, Tokyo - is the center of the
mobile universe.

On February 21, KDDI (finally) launched Qualcomm's BREW (binary runtime for
wireless) environment on a new Toshiba handset, the A5304T. We've got a great
interview coming up in the March 5 edition of the WWJ Video newsmagazine with
Qualcomm's BREW project manager, Ted Nozaki, but the interesting point here is
that among the 21 BREW applications available for download via EZweb, several
come from Korean providers. That has to be a first!

WWJ sr. contributing editor Michael Thuresson dropped me a note late last week
commenting on the growing Korea-Japan ties. He mentions that the Korean
government has set up the "iPark Tokyo" IT-related venture support complex
housing several Korean wireless application developers aiming to do business on
Japan's wireless webs.

He adds that, "iPark Silicon Valley is interested in utilizing this relationship
to bring both Japanese and Korean content into the US market." Mike cited one
good example of this: Web Eng Korea, a developer/aggregator. "They opened a
North American office for distribution in the US market, and have named
themselves 'Tsunami.' They're apparently actively looking for Japanese content
to import as well."

I also received feedback on my editor's comments accompanying last week's WWJ
Video Newsmagazine ("Smartphones Stir Up Japan's Mobile Market" - a look at
Nokia's Communicator now available in Japan) from Gonzague-Alexandre Gay, a
self-described former consultant for the International Telecommunication Union.

He agreed that the PDA is not a "Japanese" device, and supplied some reasons why
that may be. "If you look around," he wrote, "you will see that the keitai
[business] in Japan is more a 'woman' business than in Europe or the US. Young
women (15-35 years old) upgrade their phone almost every time that a new one is
released; mobile phones with built-in cameras were bought first by women and it
is these clients that Japanese carriers are targeting." I agreed that he was
largely correct.

Gonzague-Alexandre went on to state that, in Japan, the mobile business is the
business of 'fun' and that the phone is not necessarily a productivity tool - in
contrast to how European and US device makers approach the problem. He agrees
that in those markets, this may be changing as younger male professionals
increasingly adopt mobile devices that are as 'fun' as they are useful - e.g.
the P800 Ericsson or Nokia 7650. But he asserts that, in Japan, businessmen
don't travel much, mostly stay at the office, and so don't really need
smartphones. "His Keitai and maybe his laptop are good enough."

He finished with the observation that, "In Japan, women don't care if they can
have Outlook, Word, or Excel in their keitai." He says that most of the
smartphones in Europe are still "too big and business oriented," like the Nokia
Communicator, et al. "So, until a smartphone brings 'fun' and pleasure in a
small form factor designed for Japanese women, we won't see such devices in
Japan much at all."

I think he's made a couple of good points - and I certainly agree that the
keitai biz in Japan to date has been a consumer-targeted business with female
subscribers often leading the way. Maybe Nokia, Sony, Casio, Sharp, et al would
be wise to create a fashionably-colored Communicator-like PDA with several
applications tailored for the young, female demographic?

Finally, the past couple of weeks saw two lavish events at trendy Tokyo venues
hosted by carriers NTT DoCoMo and J-Phone to fete their content provider
communities (so, yes, there was a lot of overlap in the guest lists). One
attendee at the J-Phone event, held at Zepp in Odaiba, reported that it was a
sweaty, raucous evening with content community punters packed in six deep.
"There was a lengthy line-up of folks waiting to exchange meishi business
cards," she said, adding that a good time was had, evidently, by all.

NTT DoCoMo's event - held to mark the 4th anniversary of i-mode's February,
1999, launch - was a little less raucous and more high-brow. You can read a
report on Joichi Ito's blog (link below); he mentions that there were about
2,000 people present, all content providers, and adds: "Most are making money.
That's impressive. There were jugglers, guys on stilts playing huge saxophones,
lots and lots of food, plasma displays all over the place, art, etc. Schmooze
was in the air. The NTT DoCoMo exec team has special business cards printed for
the event with special assistants following them around with a box of name cards
as they went around and greeted their guests. Reminds you of the good old days."

-- Daniel Scuka
daniel@wirelesswatchjapan.com

i-mode 4th anniversary party/panel
http://joi.ito.com/archives/2003/02/25/imode_4th_anniversary_partypanel....

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++ Wireless Notes
---------------------------------------------------------------------

** Previewing Content - Japan: Sometimes, US: No
Last week, sr. contributing editor Michael Thuresson sent in a user-level review
of his new Sanyo handset that he uses on the Sprint network. He commented: "As
you scroll through a list of tones, you cannot sample them before you buy them.
Hard for people new to this idea to get interested if they can't do that! Then
they cost $1 each and expire in 90 days." Afterwards, Carolynne Schloeder,
executive vice-president of Faith West Inc. - creator of the "music for i-mode"
(MFi) ring-tone file format used on i-mode, sent a comment stating that Sprint
doesn't allow ring tone previews from the phone because "they're downloading
through WAP, and that's currently not possible."

She added that streaming technology for WAP (which is also used by KDDI in Japan
for EZwewb) is in the works, but couldn't confirm when it would launch or from
whom. Carolynne also mentioned that Faith has built one Java (J2ME) application
to solve this problem, but the company hasn't released it into the wild yet. It
would be possible to create a BREWlet that would also allow a streaminG preview
of a multimedia file.

In Japan, NTT DoCoMo allows some sound files to be previewed, namely the audio
files distributed via download-and-playback on the M-Stage music service that
runs on the 64-kbps PHS network (not i-mode). Otherwise, it's rare for a
ring-tone provider to offer previews in Japan.

** New BREW Handset - Toshiba A5304T ;-(
A regular WWJ reader who requested anonymity (for obvious reasons) send me a
blast panning the new Toshiba BREW-enabled CDMA 1X handset:

Just thought you might be interested. I bought a A5304T with BREW last
week, and it is crap! Actually, the BREW part and the camera are all
right, and the phone design itself is nice; but the user interface and
display suck. The display is the biggest out there but the pixels are
really large. Resolution is not that great; looks kind of like the
display on a Palm. I wouldn't have bought one if I had seen a working
model beforehand, but I figured that since Toshiba put out that quarter
VGA-resolution model on J-Phone, the display [on this one] must be nice.
Also, the icons stink and you can't customize anything.

The BREW applications are nice, although I've only played with a few.
The GPS maps load fairly fast so that's good. The camera and the photos
are excellent though, and there are some functions on this phone that I
do like, but the interface is awful. I already traded it in for an
A5302CA, which is much better.

Pictures, screenshots of display, review (Japanese) at:
http://k-tai.impress.co.jp/cda/article/showcase_top/12989.html

++ Noteworthy News
--------------------------------------------------------------------------------

--> DoCoMo Plans Flat-rate Mobile Web Access Service
http://in.tech.yahoo.com/030228/137/21mns.html
Source: Reuters on Yahoo, Feb. 28

EXTRACT: NTT DoCoMo said on Friday it plans to launch a flat-rate wireless Web
access service using its personal handyphone system (PHS) network, in a bid to
shore up its flagging PHS operation. In launching a flat-rate service, DoCoMo
would be following in the footsteps of DDI Pocket, a unit of rival KDDI Corp
which boosted its PHS subscriber base, despite an overall decline in PHS users,
after launching a flat-rate Internet access service in 2001. DDI Pocket's
service quickly became popular with users of notebook computers and other
portable devices. In contrast to DDI Pocket's operating profit of 9.1 billion
yen in the half year to last September, DoCoMo's PHS division posted an
operating loss of 15.6 billion yen in the same period.

COMMENTARY: This service would directly compete with DDI Pocket's
well-established and very successful flat-rate PHS data service (which is also
available through a number of resellers). DoCoMo hasn't announced pricing, but
the Nikkei said the service should start on April 1 at a monthly rate of 4,880
yen (DDI Pocket charges an average of 4,930 yen - but it's much more expensive
for the high-speed 128-kbps option). Note that Big D has already had flat-rate
(but tiered) pricing for PHS data for some time. The P-p@c 10 and P-p@c 20 plans
provide up to 600 minutes (10 hours) of data transmission time for a flat charge
of 2,500 yen, and up to 1,200 minutes (20 hours) of data transmission time for a
flat charge of 3,200 yen, respectively.

PHS data cards work extremely well, offers 64 or 128 kbps speeds, and its a
profitable business. DoCoMo was also handing out promo brochures yesterday in
Ginza for its PHS-based M Stage-series of audio and video clip download
services. It looks like they are desperate to do anything to boost packet and
multimedia data usage among the non-FOMA-using public, even if such packets and
services run on PHS - an ancient, coal-fired technology.

----------------------------------

--> Online News in Japan: Popular, but Not Profitable
http://www.japanmediareview.com/japan/media/1046029646p.php
Source: JMR, Feb. 27

EXTRACT: Japan's largest newspaper Web sites get hundreds of millions of page
views per month. But many new media pioneers are still unsure where news sites
fit into the media mix in Japan -- and whether they'll ever make a profit. A man
walks by a bank in Osaka just as it erupts into flames. He pulls out a
camera-equipped cell phone -- one of 10 million in use in Japan -- and snaps a
photo. He e-mails it to Yomiuri Shimbun, Japan's largest newspaper, which
publishes it on the front page. Predicting few readers will ever use cell phones
to cruise the Web, Asahi Shimbun builds a Web site for cell phone users in 1999
-- just in case. Today, 1 million people pay about $1 each month to access Asahi
content, making wireless Web the most profitable part of Asahi's interactive
division.

COMMENTARY: This is an excellent story providing a snapshot in time of the
distribution of newspaper content via keitai in Japan - a profitable endeavor.
Key points from this News Item:

** Teddy Jimbo, Japan's first video journalist, web casts a controversial weekly
news analysis program from his small television studio in Tokyo; 4,000
subscribers pay about $4.50 each month to watch this and three other regular
shows

** Many of Japan's newspaper Web sites update around the clock, employ dozens of
staffers, and boast hundreds of millions of page views every month.

** Only five or six Yomiuri staff members are involved in cell phone news
services, but it is expected to yield about 100 million yen in profits each year

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--> J-Phone Launches "Loco Guide" Location-based Portal
http://www.j-phone.com
Source: Company PR, Feb. 26

EXTRACT: J-Phone said that on March 3 it will launch "Loco Guide," a new service
that utilizes the J-Sky mobile Internet to bring a broad range of local
information to customers based on their current location. Loco Guide searches
for location-specific contents so users can quickly obtain information on
transportation, restaurants, leisure spots, banks, hospitals, and other
services. Previously users had to search different J-Sky content services to
obtain location-specific information. However, with Logo Guide, users can now
access the contents of multiple sites simultaneously, thereby eliminating the
inconvenience of searching different sites to find relevant information.

COMMENTARY: The Loco Guide systems accesses content from 23 sites (18 content
providers); J-Phone plans to expand the lineup in the future. Loco Guide uses a
total of 482 area designations in Japan based on NTT DoCoMo's "open i-area"
standard (used for i-mode's "i-area" service). Matthew Nicholson at J-Phone PR
provided some Q&A details on how the system works:

Q. What technology does the system use? Is it cell-based?
A. Yes, the nearest base station senses the current location. The Loco Guide
portal will automatically arrange content based on the current location (you can
change the location too, to search Sapporo City, for example). The technology is
based on our "Station" location-based service for content delivery.

Q. Is it a new database, or is it based on existing systems?
A. The database is actually not so complicated. It takes currently existing
contents and rearranges them according to location.

Q. How did you find the content providers?
A. The service is based on existing contents so we already have relationships
with these CPs (we of course obtained their cooperation for this new service).
This service provides another gateway (which is location-based) for accessing
content to make our Web services more convenient for customers.

Q. Can CPs update their service data in real-time? e.g. Can a restaurant run a
"seat sale" between, say, 17:00-19:00, if business is a little slow one day?
A. CPs can generally update their content on the J-Sky platform (and Loco Guide)
when necessary (e.g., add a new restaurant, delete a restaurant when it's
closed, change a train timetable). The updating method varies; different CPs use
different systems.

----------------------------------

--> DoCoMo Adds Flash to Phones
http://rss.com.com/2100-1033-985581.html?type=pt&part=rss&tag=feed&subj=...
Source: CNET, Feb. 23

EXTRACT: Japanese cell phone giant NTT DoCoMo will become the first phone
carrier to offer services based on Macromedia's Flash animation player,
Macromedia is set to announce Monday. Flash is one of the most commonly used PC
applications, installed on more than 98 percent of PCs worldwide to serve up
everything from animated Web ads to homemade cartoons. With the new version of
Flash, however, Macromedia began eyeing a bigger territory, positioning the
Flash player as the foundation of a new era of Web services that could also be
easily ported to smaller devices, such as mobile phones and handheld computers.
Under Monday's agreement, DoCoMo will include the Flash player software on new
high-end I-mode phones, starting with the 505i series, to be introduced late
this year in Japan.

COMMENTARY: Macromedia has be eyeing the Japan market for over a year now, and
must be mighty pleased that Big D has opted to support the technology. One
Macromedia developer told me: "As you can well-imagine, I'm very happy about the
partnership with DoCoMo and the fusion of Flash and keitai in general." Flash is
interesting because it allows dynamic animation and high-quality graphics to be
delivered to and displayed on cell phones without the bandwidth and onboard
processor overhead that video requires. DoCoMo was likely attracted at least in
part by the well-established Flash developer community.

Competitors in this space include technologies such as that touted by US-based
Active Sky, which allows similar dynamic graphic images to be displayed on a
celly. In fact, while there's no confirmation yet, an Active Sky-based content
service may be deployed on a DoCoMo competitor network here in Japan quite soon.
All in all, Japan's content technology mix is becoming more complex.

----------------------------------

--> Wireless Surprise: In Japan and Korea, Mobile Content is Making Money
http://www.businessweek.com:/print/magazine/content/03_09/b3822124_mz033...
Source: Business Week, Mar. 3

EXTRACT: Even mobile e-commerce - which has been a bust elsewhere - is starting
to take off in Japan. More than a third of mobile Net subscribers have used
their phones to buy such goods as CDs and concert tickets, according to the
Mobile Content Forum, an industry trade group. One site, called Blondie, lets
shoppers scan bar codes in magazines with their phones to order items appearing
in ads. Blondie's turnover: nearly $50,000 a day. A sister site devoted to
perfume rings up $170,000 in monthly sales. "People love shopping on their cell
phones," says Katsuhisa Oda, general manager of Index Corp., which owns the two
sites. Mobile e-commerce revenues in Japan are expected to top $1.4 billion in
2003, 40% more than last year, according to Mobile Content Forum.

COMMENTARY: This news is old hat to anyone here, but the story is a well-written
summary of who's making money and how on Japan's and Korea's wireless webs.
Interesting factoid: Japan's three carriers rang up USD$9.9 billion in traffic
fees last year, up 62% from 2001. This story well wroth reading entirely as it
describes the current ring tone and other content download business, as well as
the new "camera-phone-as-scanner" shopping systems (the current crop of handset
high-res displays can also show a bar code coupon that can be scanned by a POS
terminal scanner to provide a discount on a non-e-com purchase). There is,
unfortunately, little mention of how advertisers are using Japan's wireless webs
as advertising, promotional, and marketing platforms, also a large
revenue-generating component of i-mode, J-Sky, and EZweb.

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++ Events (promotion)
---------------------------------------------------------------------
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++ Sign of the Times
--------------------------------------------------------------------------------

48.8% of Homes Have Net-capable Devices: Ministry
http://www.japantimes.co.jp/cgi-bin/getarticle.pl5?nn20030226b2.htm
Japan Times, Feb. 26
2002 saw 48.8 percent of the nation's households sporting
Internet-capable electronics equipment, according to the Public
Management, Home Affairs, Posts and Telecommunications Ministry.
Households with such devices as computers and mobile phones topped 50
percent in the Kanto and Kinki regions.

... In Japan, even the bureaucrats consider a cell phone to be an "Internet
Device" ...

Subscriber Statistics, Corrections, Credits, Administrivia
--------------------------------------------------------------------------------

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STAFF
WWJ Video Newsmagazine host & research:
Daniel Scuka (daniel@wirelesswatchjapan.com)

WWJ Mail Newsletter editor & host:
Daniel Scuka (daniel@wirelesswatchjapan.com)

WWJ Sr. Contributing Editor:
Michael Thuresson (mthuresson@labusinessjournal.com)

WWJ Video Newsmagazine editor & producer:
Lawrence Cosh-Ishii (lcosh-ishii@wirelesswatchjapan.com)

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Text copyright (C) 2002 WirelessWatchJapan.com. All Rights Reserved.
Reproduction in whole or in part by any means without written permission is
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