WW-37 -- Assessing the Value of Wireless Content

J@pan Inc Magazine Presents:
Commentary on the business of wireless in Japan

Issue No. 37
Monday, December 17, 2001

Notice: The next Wireless Watch will appear on January 7. The staff
at J@pan Inc magazine wishes you all a Merry Christmas and a safe,
healthy and peaceful Year of the Horse.


+++ Viewpoint: Assessing the Value of Wireless Content

+++ Noteworthy News
--> Root Develops Wireless LAN Device Supporting IPv6
--> PDA Makers Come Closer to System Integrators
--> NEC to Open Cellphone Software Development Center

+++ Sign of the Times
Teens Rule


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+++ Viewpoint: Assessing the Value of Wireless Content
(Rather long this week -- perhaps better to print and read on paper)

Last week, I was asked by a colleague what constituted the factors by
which a company could decide to deploy a service via the wireless
Internet. She's assembling a list of such factors in order to create
a tool, if you will, that can be used to assess the potential value
of any content, applications, or services (simply, "content") on

Wireless content is valuable when it provides value to customers --
an obvious but often missed point. This means that any content
must be assessed from the customer's point of view. Wireless content
also must be simple, time independent, place or location independent,
and process independent -- and I would argue that these four
attributes are absolutely necessary.

Japan's experience with the wireless Internet proves that wireless
content is most likely to be valuable when linked to other channels,
presences or modes of contact. These can be offline -- a
bricks-and-mortar presence, traditional media or other marketing
efforts -- or linked to an online presence, for example, to a PC Web
or PDA Web content channel, to email, to kiosks or to a wireless LAN
hotspot (all these exist in Japan).

Successful wireless content must also be tightly integrated with how
subscribers actually use the devices from physical, cultural and
social points of view. There is no doubt that content providers in
Japan artfully take advantage of long commutes and microniches of
time (say, waiting on the train platform), and both are
key time slots when people use their wireless devices.

In America or elsewhere, if people commute in cars, for example, then
maybe content should be ported to some sort of in-car smart
navigation terminal; in other words, don't get hung up on a **phone**
as the hardware platform.

Further, Japan's content providers spend a lot of time figuring out
what, precisely, their customers want. If the customers don't want
m-commerce-enabled shopping, for example, then the content providers
don't waste time building complex systems and then trying to coax the
customers to use them.

Providers start with **extremely** simple content and then see what
their audiences use. They then apply incremental improvements, always
working in the direction of increased customer value (and, obviously,
profit for the provider).

Japanese mobile content providers have found that, compared to the PC
Web, mobile content is accessed:

** At various times throughout the day
** In different situations
** For different reasons and incentives, and
** At various locations

Further, customers really do demonstrate use of micro time-slot
patterns, and they don't browse, they "jump."

Also, the Japanese content providers actively exploit and develop
content that is as interactive as the hardware and network technology
will permit. J-Phone now has some 3 million camera phone users, and
the photo-sharing area is becoming very interesting.

Several third-party developers (including Kizna Inc. and
FusionOne.com) have sync-based middleware that allows real-time
updating and sharing of, for example, photos between digital devices
(like browser phones and PCs). It's easy to imagine various
photo-sharing applications (business and consumer-focused) that can
take advantage of such technology and of J-Phone's large and growing
cam-phone customer base.

Also, Tsutaya Online will install Java-based video mail kiosks (kind
of like the hyper-popular "Print Club" photo printing kiosks) in
Tsutaya shops nationwide by 1Q2002. For JPY20-30, you'll be able to
send a video mail to a PC or, presumably, to a J-Phone handset. (If a
big-name sponsor comes onboard, the end-user cost may be zero -- of
course, there'd be a trailer advertisement attached, but so what so
long as it's entertaining?). The system integrator is also planning
to build a higher-bandwidth version for DoCoMo's 3G FOMA network. The
lesson learned? Think of ways that even non-phone users can
participate (and also, timeliness is important for mobile content).

Finally, someone has to take the initiative to make sure that mobile
content works. In Japan, that's the operators. They are the guys who
knock heads together, attend endless dreary meetings with new content
providers, and basically coordinate all the players required to get
any new content running.

If the failure of WAP has taught us anything, it's that all the
players in the mobile content production chain (the content provider,
the system integrator, the hardware integrator, the operator, and the
billing or other integrated service provider) have to work together.
In other words, the carrier can't just build the platform, then hope
that compelling, valuable content will magically appear.

-- Daniel Scuka


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+++ Noteworthy News
(Long URLs may break across two lines.)

--> Root Develops Wireless LAN Device Supporting IPv6
Source: Nikkei AsiaBizTech, December 13

EXTRACT: Root Inc. announced on December 11 a new IPv6-compliant
wireless IP router, which operates in the 2.4GHz frequency band. IPv6
is the next-generation Internet Protocol. The company says this is
the world's first wireless LAN product that uses the IPv6 protocol.

COMMENTARY: IPv6 is steadily gaining significance. Tokyo-based ISP
and R&D company IIJ said it will start offering Internet access
service for individual customers using IPv6 as of December 3.

IPv6 is significant for wireless because it greatly expands the name
space available for addressing individual devices connected to the
Internet. In the not-too-distant future, not only your home PC, but
also your cellphone, your PDA, your connected fridge, your
GPS-enabled wristwatch, and your dog's tracking collar will all have
their own IP addresses so that they can be connected to the Net at
all times.

--> PDA Makers Come Closer to System Integrators
Source: Nikkei AsiaBizTech, December 10

EXTRACT: The reason PDA makers are enthusiastic about partnering with
integrators is that they want to competitively sell their mobile
products in the growing enterprise mobile system market. "This market
is more promising than the consumer market," said a Toshiba official.
In fact, there is an ever-increasing need for sales people facing
customers to access their company's information system with their
PDAs to get necessary customer data.

Selling PDAs to enterprises will require the makers to offer
applications for PDA and server systems for information processing as
well as PDA hardware. Hence, PDA makers rely on SI vendors who are
"specialists" to integrate systems.

Some PDA manufacturers also are partnering with telecom carriers in
order to secure communications infrastructure. In order to leverage
wireless communications infrastructure, major PDA makers made partner
agreements with Japan Communications Inc., which offers a PHS data
communication service. For example, Compaq Computer KK, which sells
the iPAQ Pocket PC, made alliances with Japan Communications in
September and NEC in October when it launched the new PDA,

COMMENTARY: This story is REALLY important, and you should read the
complete text at the link shown above.

To date, cellphones have seen little penetration into enterprise
space for the simple reason that in Japan (as in most other markets),
the phone is not viewed as an IT purchase, handled by the IT
department and sold through a well-defined channel of system
integrators and software vendors. All carriers primarily sell phones
through retail channels direct to end-users. Sure, some of them are
corporate users, but that's not the same as selling a fleet of phones
-- with the concomitant applications and hardware -- to the company

This is starting to change, but, ironically, the push isn't coming
from the likes of DoCoMo based on advanced data-capable 3G technology
(although Big D is trying). Rather, the push is coming from tertiary
players, like Japan Communications, which is cooperating with
software developers, system integrators and PDA device makers to
offer flat-rate wireless data-enabled devices to vertical channels
using old PHS technology (JCI leases the bandwidth from DDI Pocket, a
KDDI group cooperator).

We will see enterprise usage of phones take off when and only when
the phone becomes an IT purchase.


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--> NEC to Open Cellphone Software Development Center
Source: Nikkei on Yahoo, December 11

EXTRACT: NEC announced Monday it will set up a next-generation
cellphone software development center in Yokosuka, just south of
Tokyo, the Nihon Keizai Shimbun reported in its Tuesday morning
edition. The JPY4 billion facility, to be located in a research park
containing many mobile phone companies' R&D centers, including those
of NTT DoCoMo, is slated to begin operations in October next year,
the Nikkei reported.

The new facility will develop a variety of software for 3G cellphone
handsets, designed for services launched this autumn by NTT DoCoMo.
It will also develop software for fourth-generation cellphone
handsets, network systems and other infrastructure products.

COMMENTARY: DoCoMo has already broken ground for its new research
center at YRP (Yokosuka Research Park); the existing one is dedicated
to 3G, among other goals. It looks like Japanese handset makers will
work just as closely with DoCoMo for future 3G and 4G development as
they have on 2G and 2.5G.

+++ Sign of the Times

Teens Rule

When it's summer break in Japan, high-school girls who aren't hanging
out at shopping malls or getting suntans at the beach may be working
as advisory board members to big companies like NTT. When it comes to
finding out what is hot on the streets, the most reliable resource is
teenage girls, who are more interested in fashion and trends than
Japanese boys are, and less afraid of stating their own opinions.

Boom Planning Co., a leading market research company, has
recognized this and specializes in setting up meetings between
companies and high-school girls. It has around 8,000 panel members
who are willing to give marketing advice to product manufacturers.

"Do any of you often use online terminals of convenience stores?"
Koji Ohtsuka asked four teenage girls at just such a meeting with
Boom Planning. He is in charge of NTT's telegram business marketing
division. "Once -- when purchasing a concert ticket," answered one.

After several meetings and evaluations by the girls, the company
decided to push its subsidiary NTT DoCoMo to start a telegram service
for i-mode, its wireless Internet service.

"High-school girls rule Japan's telecom market," The Standard,
Dec. 17

(Hey! I thought The Standard had crashed and burned! Guess not in

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Written by Daniel Scuka (daniel@japaninc.com)

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