WW-93 -- Cell-Based Location Services on Target and Japan has Cheapest WLAN on Earth

Wireless Watch Japan Mail Magazine
Commentary on the Business of Wireless in Japan
Issue No. 93, Tokyo, Tuesday, March 18, 2003
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in this issue
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++ Viewpoint: Cell-Based Location Services on Target and Japan has Cheapest WLAN
on Earth

++ Advertorial (promotion):
>> Access Your Mail Accounts via Your Cell Phone

++ Wireless Notes
** NTT Group Companies Build WLAN Network 1, WLAN Network 2, WLAN Network 3...
** Hello Kitty Content Sells in the US!!!!

++ Noteworthy News
--> Japan's Generation of Computer Refuseniks
--> NTT DoCoMo to Expand M-stage Visual Net Service
--> Toshiba, Matsushita Elec to Offer Smaller SD Memory Cards
--> Battle over 3G Phone Services Intensifies

++ Events (promotion)
>> GLOCOM Platform Monthly Seminar
>> SECOND ROUNDTABLE ON BRANDING IN JAPAN

++ Sign of the Times
"Yakuza Shot as Gang Warfare Erupts in Shikoku"

++ Subscriber statistics, corrections, credits, administrivia

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

++ Viewpoint: Cell-Based Location Services on Target and Japan has Cheapest WLAN
on Earth

Darren Coleman, with Orange PCS (UK), said in an email last week that he was
surprised to learn that J-Phone's new location service, Loco Guide, uses cell ID
for location - and not GPS (or some other, more accurate, technology). "Do you
think there is any specific reason why J-Phone have not looked to enhance their
location data accuracy? Are people happy enough with cell-ID-based accuracy as
long as the quality of the mapping is good enough?" he asked.

Basically, yes - it appears that the non-GPS location services here (operated by
NTT DoCoMo and J-Phone) work just fine with cell-based accuracy - it's
sufficient for consumer-focused, mass-market applications such as coupons,
restaurants, nearest station or pub, etc.

KDDI, of course, use Qualcomm's GPS chip in their navi service, so accuracy is
not an issue (although coverage inside buildings and time to connect to the
satellites can cause frustrations). Overall, all the mass-market navigation
services here get lots of usage, so I think people are happy enough with them.

Note that DoCoMo, for example, do offer GPS-based terminals for fleet
applications.

Darren also queried whether Japanese operators sell handsets on the back of
specific services - or are the GPS-based or cell-based location services
marketed as a "generic part of the latest handsets?" He points out that, in
Europe, most mobile players have invested in a variety of middleware platforms
and location servers but the next strategic decision is to improve accuracy -
but they can't define a clear business case for doing so.

I told him that so far, Japanese carriers haven't really pushed location
services as stand-alone products; they're sold as "part of" a handset and there
are no handsets that are sold only as, or primarily for, navi-service
capabilities.

Sure, KDDI did do a big marketing push when their first GPS-enabled keitai hit
the market in December 2001, but now it's just one more feature onboard their
fleet (in the January catalog, KDDI showed six of 11 handsets as having GPS
capability).

DoCoMo does sell one special device for tracking kids, elderly, and - I guess -
errant spouses. The service is called: "Ima-Doco?" There are about 60,000
subscribers, and it works based on PHS, the cells of which are much smaller than
on the mainline cellular network, so the accuracy is pretty good.

Darren finished his mail asking, "For LBS in general, are services picking up in
Japan?"

Again, basically, yes. Location-based services are very popular and well-used.
There are at least 80 content services on i-mode, EZweb, and J-Sky that use
position data (games, maps, communication services, etc.), and there will be
more on BREW. All in all, location services are popular and - evidently -
profitable.

----

On another topic, London-based Broad Group (www.broad-group.com) put out a
release last month stating that pricing for public access wireless LANs reveals
sharp divergences in approach between the US, Asia, and Europe.

The release referred to a new Broad Group report, "Pricing and Marketing
Wireless Hotspots," which assessed and interpreted marketing and pricing
strategies across Europe, North America and Asia Pacific, covering fifty players
in 21 countries, and over one hundred and thirty pricing schemes.

I contacted Philip Low at the Broad Group, who kindly provided several extracts
from the report. Surprise! Surprise! Europe was found to be the most expensive
market for WLAN access, while Japan was one of the cheapest.

The report cites the following figures (prices in USD at February rates and are
exclusive of tax) for a one-month subscription (conditions apply to all prices):

Telia HomeRun Sweden 164.52
AT&T Go Port US 69.99
Boingo Boingo US 49.95
Aervik Aervik Holland 46.30
Surf and Sip US 30.00
Joltage US 24.99
amazingports Sweden 22.09
Korea Telecom Korea 21.28
defaultcity Sweden 21.24
NTT DoCoMo Japan 16.70
Starhub S'pore 14.39
NTT Com Japan 13.36
Yahoo BB Japan 13.19
GLOBAL AVERAGE 41.50
JAPAN AVERAGE 14.42

In the press release, Philip wrote that Europe is the most expensive region in
the world for public access wireless LANs. Monthly subscription pricing schemes
are offered by 37% of service providers surveyed in the report, with European
prices for this category averaging US$62 per month, compared to US$39 in the US,
US$16 in Asia and US$41 globally. The most popular scheme - 24 hour pricing -
offered by almost 40% of all service providers covered, and predominantly
European, averages US$14.39.

Looks like Japan's WLAN market - in addition to being highly fragmented (see
Wireless Notes below) - is one of the cheapest. Combine this with cheap
fixed-line access via DSL and cable (I pay 4100 yen per month to cable provider
City Telecom Kanagawa), and Japan remains the coolest and lowest-cost place on
Earth from which to surf the Web.

-- Daniel Scuka
daniel@wirelesswatchjapan.com

Access the Broad Group and their reports at:
http://www.broad-group.com

++ Advertorial (promotion)
---------------------------------------------------------------------
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work e-mail accounts via Internet-capable mobile phones. classY Mobile also
allows users to respond to messages with the e-mail address of their choice, and
to delete unwanted "spam" messages.

** Message from Nelson Fung, creator of classY Mobile:

Although there are similar products on the market (which are on the official
menu of NTT DoCoMo!), I went ahead and developed classY Mobile because
existing services are difficult to use, offer too many features, and are
relatively expensive. In contrast, classY Mobile is easy-to-use and offers
only needed features. classY Mobile is available now in both Japanese and
English versions for EZweb, i-mode, and J-Sky subscribers. Moreover, unlike
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Japan-based users can sign-up for free at: http://classY.jp/
---------------------------------------------------------------------

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

** NTT Group Companies Build WLAN Network 1, WLAN Network 2, WLAN Network 3 ...
Fellow Canadian and keen Japan wireless observer Sean Bennett asked a question
last week that should be thunderingly obvious to anyone watching this market:

I have a question regarding NTT DoCoMo's M-Zone - do you know how this
differs/compares to NTT Communication's Hotspot WiFi [WLAN] service? The
pricing is similar, though one charges higher sign-up fees while the other has
higher monthly fees. The logic in having two related companies offering
competing services is... frustrating. You'd think it'd be cheaper *and* more
successful to have more [access] points under one unified system, rather than
split between two; while there is an M-Zone-equipped cafe near my office, the
one near my home is Hotspot-equipped. This causes me to forgo either of the
services and consider DDI's slower, more expensive, but use-anywhere Air H"
service... am I missing something between the two? Cheers, Sean

I don't have an answer to this one and would agree that at first glance the NTT
Group strategy appears redundant and ultimately harmful. Perhaps it's time to
ask for an interview? In the meantime, watch our video program (link below)
featuring NTT Communications senior executive vice president Shuji Tomita
speaking about their WLAN plans.

--DGS

WLAN: NTT Com VP Doesn't Expect 'Large Revenue'
http://www.wirelesswatchjapan.com/vp/42.shtml

** Hello Kitty Content Sells in the US!!!!
(Reported by senior contributing editor Michael Thuresson)

Read the press release (below) from Los Angeles, California-based THQ Wireless
(www.thqwireless.com). After all the trashing Western skeptics have done on
Japan's non-exportable cartoonish content, Hello Kitty content is coming to AT&T
Wireless's mMode! I guess it makes sense, it is a very recognized Japanese brand
here; I think most people don't even know that it's Japanese actually. THQ told
me that it's very difficult to import Japanese games because of the costs of
localizing them for deployment on US networks (i.e. Japanese game files are
typically 10 kilobytes in size while US games are around 50-60 kilobytes), so
bicultural icons like this might be the most commonly exported content we'll
see.

-- MT

THQ to Deliver Catalog of Titles to AT&T Wireless' mMode Service
http://www.wirelessdevnet.com/news/2003/70/news8.html
CALABASAS HILLS, Calif.-- March 11, 2003 -- Leading videogame publisher THQ
Inc. has teamed up with one of the leading wireless service providers in North
America, AT&T Wireless, for the distribution of several key THQ game titles
for mobile devices. AT&T Wireless' mMode customers will be able to download
THQ games including MotoGP, Tetris, Astrosmash, and WWE Mobile Madness to
their mobile phones. In total, more than 20 THQ titles will be distributed
through the agreement, including THQ's first Hello Kitty-licensed content in
early 2003.

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

--> Japan's Generation of Computer Refuseniks
http://www.japanmediareview.com/japan/wireless/1047257047.php
Source: JMR, Mar. 12

EXTRACT: Most teens and young adults in Japan rarely use computers to surf the
World Wide Web. Instead they use cell phones to access a scaled-down wireless
Web. The result: A growing computer literacy problem among Japan's youth.
Yasushi Takashita smiled sheepishly when his slender girlfriend Rika, clinging
to the train stanchion next to him, suggested he use the Internet to search for
some college-related information he needs. "I don't know how to use a PC," he
admitted as the orange Chuo Line train car bumped out of Yoyogi, an area in
central Tokyo with a high concentration of private prep schools. Takashita, a
19-year-old cram school student hoping to enter a four-year college this spring,
is not alone. A surprising number of Japan's high school students graduate
without learning how to use a personal computer, let alone the Internet.

COMMENT: In one of author William Gibson's famous essays (he coined the term
'cyberspace'), he writes: "Japan is the global imagination's default setting for
the future." Looks like we're seeing the emergence of the first
post-PC-but-networked generation, and it's happening right here, right now. I'm
not sure this is an entirely positive thing, though. Part of the cause lies in
misguided educational policy and part in dumbed-down peer pressure (those who
actually know how to install, say, Adobe Photoshop on a PC or Mac are thought to
be so dasai [uncool]...).

This story also points out that mobile surfers in Japan are fed pre-selected,
walled-garden information over cell phones - they don't have to proactively look
for it. As a result, this passive acceptance of pushed content mirrors a
fundamental (and serious) flaw with Japan's educational system. Ironically,
while news headlines and summaries are available via i-mode and the other
networks, they attract only a fraction of the subscribers who access
entertainment and lifestyle offerings, such as ring tones, cartoon screen
savers, weather reports, maps, fortunes, and train timetables (although sports
scores delivered via mobile are popular).

In the US, in contrast, the personal computer provides "direct access to
alternative news sources and multiple one-to-many channels for opinion
expression" and serves as the "ultimate media literacy tool." I can't see
Japan's situation promising a good outcome, but, a la Gibson, it does appear to
be a significant thread of tomorrow. Sigh! (My summary and comments above are
inadequate; this story is well worth reading in its entirety.)

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

--> NTT DoCoMo to Expand M-stage Visual Net Service
http://www.nttdocomo.com/current_information/product/pressrelease/articl...
13_1504505.html
Source: Company PR, Mar. 13

EXTRACT: NTT DoCoMo announced today that the company will expand its M-stage
Visual Net service to include Personal Handyphone System (PHS) and land line
phones that have teleconferencing capabilities, starting March 24, 2003. M-stage
Visual Net provides a communications platform that enables numerous people to
participate simultaneously in mobile videoconferencing. Launched in October
2002, this service was previously only available to users of
teleconferencing-capable handsets(read: FOMA). With the service expansion, users
of PHS Lookwalk P751v handsets and Moppet land line phones will also be able to
participate in mobile video conferences, though they will not be able to host
one. Users hosting the teleconference will be charged a monthly Visual Net
service fee of 100 yen, along with additional FOMA transmission charges that
apply.

COMMENT: One of the little-reported stories in 2002 was how DoCoMo is going all
out to boost usage of its long-established PHS network. The system corresponds
to second-generation cellular (but isn't considered "cellular") and has lots of
capacity - most subscribers receive a 64-Kbps chunk of bandwidth more or less
anywhere. Big D's been pushing this older technology and its multimedia
capability as a way to seed the market for the new 3G FOMA system. We first saw
3G terminals last year that could access PHS-based content (the M-Stage-series
of services provide streaming video clips and download-and-playback audio files
that use Sony's ATTRAC DRM system), and now it looks like we're going to get PHS
terminals that can access 3G services.

Is this just one more desperate move to try and boost FOMA's flagging fortunes?
Or is it a savvy way to leverage all assets to provide premium services that
business users in particular will find attractive? Time will tell...

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--> Toshiba, Matsushita Elec to Offer Smaller SD Memory Cards
http://www.nikkeibp.asiabiztech.com/wcs/frm/leaf?CID=onair/asabt/news/23...
Source: NEAsia Online, Mar. 14

EXTRACT: The SD Card Association, a group of about 500 firms dedicated to the
promotion of SD Memory Cards, on March 13 announced a new mini version of the
cards. The smaller SD Memory Card, which has about 60% less capacity than
current cards, will be used mainly in mobile phones for recording image data.
Association member Toshiba Corp will market a version with a 32MB recording
capacity in June and another with a 64MB capacity in July. It plans to introduce
a 128MB version in October or thereafter.

COMMENTS: The SD card competes directly with Sony's Memory Stick. Clearly, the
move is a response to the growing need to store more data onboard mobile
terminals. Why haven't we already seen multi-megabyte memory cards on all manner
of keitai? In a word: DRM - digital rights management - or the lack thereof. My
sense from several recent discussions with carriers is that they are terrified
of anything that would allow subscribers to use their phone as a Walkman and
avoid downloading the music via the network (and thus paying packet fees); they
are also very shy of being associated with anything that may be tinged by "music
piracy." In the meantime, as this item illustrates, technology is rolling ahead.

For an absolutely excellent overview of the fundamental issues involved, read
Frank Rose's story in the February issue of Wired:

The Civil War Inside Sony
http://www.wired.com/wired/archive/11.02/sony_pr.html

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

--> Battle over 3G Phone Services Intensifies
http://www.yomiuri.co.jp/newse/20030317wo13.htm
Source: Yomiuri Shimbun, Mar. 17

EXTRACT: Satoshi Nagao, executive managing officer of KDDI, said: "We are
already in an era of one mobile phone per person, so the market itself is
saturated. To make the company grow in such a situation we have to increase our
share of the market, by making other companies' customers shift to us." For its
next step, KDDI will launch the CDMA2000 1xEV-DO service - evolved from the
CDMA2000 1x - this year, possibly as early as autumn. The company plans to
separate voice transmission to 1x and data transmission to EV-DO. "The EV-DO
platform ... can provide a five-minute-long video easily, as opposed to the
current CDMA2000 1x that allows only 15 seconds," he said. Motoharu Sone,
telecom analyst at UFJ Tsubasa Research Institute, said KDDI's dominant position
in the 3G race was unlikely to be challenged over the next few years. "It will
be interesting to see whether NTT DoCoMo can catch up with KDDI. With handsets
to be released in autumn that will be equal to PDC handsets in terms of
coverage, weight and battery life, DoCoMo and J-Phone will start a full-scale
counterattack. However, I don't think either of them can overwhelm KDDI within a
few years," he said.

COMMENTS: This news item is a great wrap-up and review of the status of 3G in
Japan. The Yomiuri Shimbun yesterday said that DoCoMo's three new FOMA 3G
handsets - the N2051, the F2051, and the P2102V - have received a "good
reception even though all of them were released later than scheduled."
Panasonic's P2102V videophone handset - which went on sale last weekend - is
particularly striking and features a rotatable display. Now we'll see how they
sell.

Quick Specs-->
N2051: 310,000-pixel CMOS main cam; 2.21-in., 65,536-color TFT display,
F2051: 270-deg swivel 100,000-pixel CCD cam; 2.2-in., 65,536-color TFT display;
onboard photo editing
P2102V: 310,000-pixel CMOS main cam; 2.35-in. 262,144-color TFT display; SD card
http://foma.nttdocomo.co.jp/term/

Quick Prices-->
N2051: Bic Camera (Shibuya east exit): 28,800 yen, Shinjuku West exit: 28,800 yen
F2051: Bic Camera (Shibuya east exit): 19,800 yen, Shinjuku West exit: 19,800 yen

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Masami Atarashi (Global Linkage): "Japan from Global Viewpoint"

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Wednesday May 28th 2003
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++ Sign of the Times
--------------------------------------------------------------------------------

Yakuza Shot as Gang Warfare Erupts in Shikoku
http://www12.mainichi.co.jp/news/mdn/search-news/873085/mobile-0-1.html
Mainichi Shimbun, Mar. 11
KOCHI - A yakuza [gangster] sustained minor injuries after being hit in a
drive-by shooting as cities in Shikoku were rocked for a second consecutive
night Monday by a war between rival factions of Japan's biggest underworld
syndicate, police said Tuesday. Police said the gangster was shot as he walked
through Kochi while talking on his mobile phone at about 6:15 PM. Only one of
the five shots fired at him hit the target and even then the bullet only
grazed his leg.

... Luckily he was only talking... I wonder what would've happened if he'd been
checking his mobile email? ...

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