the digital forest

State of the Japan net - part VIII

- by Forest Linton -

The news just keeps rolling in. Softbank has announced yet another Japanese joint venture - this time with broadcast.com. I swear that Softbank is active enough here that I could devote a column just to them and not run out of topics. Not to be outdone, Sony Music Entertainment launched a digital music download trial in early March. According to Sony, over 1000 music files were downloaded (at \300 each) in the first week.

Although most of japan is still mired in a recession, consumer PC sales have failed to decline - due mostly to the summer release of Windows 98 and the wildly successful iMacs. Continued PC sales mean more Internet users - witness AOL Japan's January announcement that they broke the 200,000-subscriber barrier.

America didn't disappoint either. The financial results are in and it was an "e-Christmas” to say the least. An estimated $3.1 billion was spent online in the last quarter of 1998, with heavyweights Amazon.com and AOL leading the pack. A recent survey in Nikkei Multimedia pegged the number of Japanese Internet users who shop online at about 46%. The same survey also reported that women comprise 40% of all new Internet users. 1999 will be the year of online shopping in Japan.

The latest InterNIC survey

Every six months, Network Wizards performs an Internet-wide survey, providing a guess at the growth of the Internet and the number of hosts in various domains worldwide. The January 1999 results are out and total number of hosts increased nearly 18% - from 36.7 to 43.2 million. In the top 10, Japan's hosts jumped the most, with nearly 25% growth. I sense another big wave coming here and we should see Japan outpace its European peers in the future. For the first time since I have been tracking this survey, the order of the top 10 did not change from the last survey.

Major developments will change the landscape

In late February, Excite Japan announced a plan to list its shares on the Tokyo stock exchange by 2003 or once the company has turned profitable. This follows in the footsteps of Yahoo Japan, whose stock has done quite well. So what? This bodes well for the burgeoning individual investor segment, which I believe won't really start to take off until there are "interesting" high-growth stocks available on the market. Hopefully, this won't take too long.

In early March, Sony announced its much-anticipated PlayStation 2 game platform. Just as Windows 98 and the iMac re-energized the entry-level computer crowd, PS2 will bridge the gap between gamers, TV watchers, and the Internet. In reality, game machines will become the ubiquitous set top box that Oracle and others started promising years ago.

Smart card efforts took another step forward with Mondex International's announcement of three new Japan partners. Sanwa Bank Ltd., JCB Co. Ltd, and Mastercard International of Japan have all agreed to be franchisees of the Mondex money system and to issue Mondex Cards in Japan. Mondex is a smart card company that was purchased by MasterCard International last year. Japan (and more specifically, the Kanto and Kansai regions) is thought to be an ideal roll-out market for smart cards because of high consumer usage of debit cards, the country's proficiency in building nationwide infrastructure, and the high population density.

NTT DoCoMo launched its new iMode cellular phone data network which allows users to check e-mail, pay bills, and play games via their phone. (See April 1999 Computing Japan - Ed.) A typical i-mode-compatible phone features a six- to eight-line kanji-capable screen, offering two to three times more real estate than current top-of-the-line cell phones. The only problem is the price: a \300 monthly fee to subscribe to the service and a \0.3 per packet usage charge. A screen's worth of data will cost \20-30 to download. You can do the math: we are talking about some killer phone bills and a big group of pissed-off teenagers and parents. But, it is a great concept.

All of these developments are helping pave the way for not only connecting the citizens of Japan, but also educating them as to the coolness of being a wired community. The effect will be enormous and once the general population is comfortable online (which will be very soon), Japan will be launched into a net boom the likes of which we have not seen before.

Forest Linton is the MSN Portal Group Manager at Microsoft Japan. His views are expressly and exclusively his own and do not necessarily reflect the opinions or Microsoft or Computing Japan. He can be reached atforest@gol.com.



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