WW-49 -- Why There Were Few Japanese Companies at CTIA

J@pan Inc Magazine Presents:
Commentary on the Business of Wireless in Japan

Issue No. 49
Monday, March 25, 2002


+++ Viewpoint: Why There Were Few Japanese Companies at CTIA

+++ CTIA Noteworthy News
--> Access USA
--> Cibernet
--> NTT DoCoMo
--> OmniVision
--> PacketVideo
--> Panasonic
--> TransChip
--> TruVideo

+++ CTIA Rumors and Scuttlebutt

+++ Subscriber Statistics, Corrections, Credits, Administrivia

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+++ Viewpoint: Why There Were Few Japanese Companies at CTIA

Aside from dreading the cold, I spent the plane ride from Orlando
(+28C) to Toronto (-2C) after the CTIA (Cellular Telecommunications
and Internet Association) show reviewing notes and thinking what was
the news of most lasting significance. I think I found a pretty good
candidate in one company president's take on why there were few
Japanese mobile content, application, or service providers at the

The theme of this year's event was 'Live, Work, Play' and over 800
companies and organizations participated. The event itself was
absolutely monster, with more than a few booths occupying multiple
stories spread over several hundred square meters and manned by a
staff of dozens; the show overall spread over a million square feet of
space in the Orange Country Convention Center, which itself makes
Narita Airport look tiny (and they're currently building a huge
addition across the street -- is there anything that the Americans
don't do big?).

It was impossible to visit all booths and pavilions, so I made a point
of seeking out companies that were connected to Japan in any way first
(see full report below). Of course, NTT DoCoMo, NEC, Hitachi, Fujitsu,
Sony Ericsson and other big Japanese mobile players were out in force.
(On second thoughts, I guess Sony Ericsson isn't really 'Japanese,'
is it?)

It was interesting to see the number of foreign companies that have a
great deal of interest in Japan, or who are already partnered with a
Japanese carrier or technology company. These included CMG,
PacketVideo, Logica, Qualcomm and other well-known brands, as well as
several lesser-known technology vendors (TruVideo, OmniVision,
TransChip, et cetera).

One recurring refrain heard from those who want to get into Japan was,
"How do we get into Japan?" My standard answer: Read J@pan Inc! ;-)

But the person I most enjoyed speaking with was Access USA's president
Kiyo Oishi, a smart, US-savvy embedded systems guy who came up through
Geoworks and Sony. I asked Oishi why there were so few Japanese
software vendors at CTIA -- one of the largest showplaces for the
wireless Internet in the USA. As I said in WW No. 46, ("New York, New
York! or, Whither Japan's Wireless Software Industry?"), if you want
to make it big, you've got to make it in the US, and Japanese software
vendors that have built up experience on the wireless Webs here over
the past three years should have a natural head-start, shouldn't they?

"I don't know why," said Oishi, referring to my query. But he
speculated that the reason may be related to the fact that the US and
Japanese software industries are totally different. He explained that
a US software startup typically targets a vertical industry first,
like wireless, entertainment, or automotive. But in US wireless space,
there is only one major terminal maker (Motorola), so the server side
is much more important and there isn't a lot happening on the client

Conversely, in Japan wireless, a software startup typically relies on
relationships with one or more of the big electronics manufacturers,
many of whom have extensive terminal operations, so client-side is
big. "The makers want technologies that they can apply across
different devices," said Oishi. As a result, smaller software
companies in Japan tend to have expertise, technology and business
know-how that relates to devices, products and the end-user, whereas
the US wireless industry is much more oriented to the server, the
gateway and the network.

Oishi may be right. In Japan, DoCoMo built the original i-mode gateway
itself (helped by very large SI friends at NEC, CTC, and in the NTT
Group), while less-deep-pocketed competitors J-Phone and KDDI turned
to foreigners for off-the-shelf gateway solutions (KDDI used Openwave
for EZweb's WAP system, while J-Phone used Logica).

The domination of the client-side in Japan is one reason why Access
Japan could survive, says Oishi, but it's also why Japanese software
companies are hesitant to move to the US. "Who do you talk to in the
US? It differs by vertical industry," he says, adding: "Besides, it's
a totally different business culture." To emphasize this difference,
the US MBA-educated Oishi goes so far as to speculate that Access USA
will at some point have to "switch to a local hire" for its president.

I saw a large number of non-Japanese companies that, sure enough, had
some pretty sexy wireless network technologies on offer, including
video, graphic and image transmission and display solutions, content
enabling systems, billing and ecom servers, as well as animation and
multimedia platforms. Based on what I've seen in Japan so far, it will
indeed be tough for the Japanese to compete with these guys -- they've
already got a firm head start in dealing with the Ericssons, the
Nokias, the Openwaves, and the Verizons of the US market.

Still though, I hope Oishi is wrong in at least one respect. I hope
that Japanese wireless Internet firms drop their hesitation to go over
and talk with the US and European industries and develop the
self-confidence needed to beat incumbent competitors at a game that is
already well-established in Japan. Access can do it. Cybird can do it.
Why not the rest of them?

--Daniel Scuka

PS. The subscriber survey is complete -- thanks! Response was much
stronger than hoped for, and we'll have a report in an upcoming issue.



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+++ CTIA Noteworthy News

--> Access USA
To my surprise, Access, original developer of the i-mode browser for
NTT DoCoMo, appears to be gaining some momentum this year. I say
surprise because last year parent Access Japan was in a sales slump,
while Access USA seemed to be up against a steep wall with a browser
that cost money (competitor Openwave's is free) and few customers.

But the US branch of the company is now moving aggressively into
server space with its new Premium Content Subscription Server (a
wireless Internet gateway component that allows subscription-based
content-fee collection), which the Access guys all refer to as 'i-mode
in a box' (and I'm almost positive they're not paying brand name
royalty fees to DoCoMo). The company expects to have an announcement
soon concerning a US CDMA operator that is adopting the PCSS system;
several handset makers are involved as well. The pending announcement
may scoop AT&T's launch of i-mode (closer to December -- Access is
also involved with that one) and there may also be an announcement
from a Brazil-based carrier concerning Access. The company also
recently hired Curtis Yarvin away from Openwave, where he was lead
architect for that firm's Universal Edition of the WAP-based Mobile
Browser; they also picked up an ex-Palm guy.

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--> Cibernet
I sat in on a seminar run by Mary Clark, VP for operations, who
presented on the company's settlement, billing and roaming software,
used by many major carriers (including DoCoMo and KDDI). Cibernet is
now porting the system to enable per event, per packet, or per time
microbilling for non-voice services within carriers or across carrier
boundaries. Clark explained that in the future, 'carrier' can include
non-traditional players like 802.11(b) network operators such as
Boingo. In fact, her seminar used billing for content access via an
802.11(b)-based WLAN system as the sample transaction. I wonder if any
of the Japanese billing software providers are considering the
challenge presented by non-licensed spectrum carriers? Handling,
accounting, processing, and settling transaction records (MXP and TAP
records) consumes a major portion of wireless telcos' IT efforts. We
wonder if anyone in Japan is up to the task of porting these systems
to Hiperlan, 802.11(b), and Bluetooth?

--> NTT DoCoMo
The DoCoMo booth was unique in being generated largely out of the
parent company, NTT DoCoMo Japan, while most of the others were
conceived and manned by the US subsidiary of the Japanese brand. This
is understandable given that Big D doesn't have a retail presence in
the US, so naturally all the handsets, services, and networks (i-mode
series, FOMA, i-Appli, the c-mode Coke vending machine, et cetera)
being demonstrated were DoCoMo's **Japan** products. You've gotta
wonder what it costs to translate all the brochures, service plans,
and product descriptions, round-up English-speaking staff, hire
translators, and put togther such a massive **English** showcase.

The DoCoMo booth with its 3G handsets was also one of the first stops
for the various VIP tours, and I happened to be there when a group of
senior CTIA and FCC directors was led through by NTT DoCoMo USA vice
president David Jeppsen, under the watchful eyes of several NHK
television cameras. Clearly, DoCoMo Japan PR were pushing the 'i-mode
in America' angle for all its worth (see WW No. 45 "DoCoMo as National

Tomoko Oshinka, from DoCoMo's marketing team in Tokyo, explained some
details at the corporate solutions display. DoCoMo is tied up with
SAP, Lotus and -- more recently -- Oracle. The Oracle joint effort is
still under definition, but will focus on the Oracle Mobile Database
and DoCoMo's Location Platform Service. One possible application will
be using Mobile Server to provide spatial data to mobile devices via
the Location Platform; Oshinka says the system may work on the 2G
network, but is really focused on 3G. The Lotus connection is already
in service, and users of the Domino Mobile Server can access a mobile
interface using a laptop and a wireless data card (or, I would
guess, a cellphone connected to a laptop). Oshinka says this
works with any carrier in Japan, but is cheaper if access is made via
a DoCoMo network.

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--> OmniVision
Remember the Treva digital camera-equipped phones that DDI Pocket
released early in 2001 (the camera module plugged in to a jack on the
side of the handset)? They were quite popular for a time until
J-Phone's Sha-mail handsets (Sharp and Toshiba) came out last May
with a built-in camera. Well, it turns out that the CMOS sensor in the
Treva was designed by 'fabless' chip maker OmniVision Technologies,
based in Sunnyvale, California. The camera chips themselves were made
in Taiwan.

--> PacketVideo
CEO Jim Brailean says that about 50 percent of PacketVideo's revenue
will come from Japan this year, so the Japanese carriers are obviously
a major focus for the San Diego-based company. He also says that the
Japan market has helped solidfy MPEG-4 and the move to open standards.
PV has no formal relations with VoiceAge, DoCoMo's other MPEG-4
technology supplier (PV covers streaming MPEG-4-based media; VoiceAge
provides the download-and-play solution for i-motion on FOMA) and
admits not having known much about them before Big D's decision to
choose VoicaAge's SPOTxde encoder for i-motion. (Ironically, in Tokyo
last week, the VoiceAge guy told me they didn't know anything about
PV, either.)

--> Panasonic
Product engineer John Mitchell said that traditionally, cell phone
terminal development in the US and Japan is done completely
separately. But recently there's been more cooperation as the US
models have started to adopt the look and feel of the Japan models.
Panasonic USA's new EB-TX310 digital handset (2.7oz, 22 ring tones,
200 hours standby time -- still lower than in Japan) was actually
developed by the Japanese side he says, and -- sure enough -- it looks
just like the some of the latest Japan models.

I asked why not simply use the extra-long life batteries from
Panasonic models in Japan in the US models to achieve similar standby
times? John explained that battery life and talk time are greatly
affected by the basic network technology that the handset uses. In the
US, on CDMA- and TDMA-protocol systems, the handset has to query the
network several times per second (unlike in Japan on PDC) and the
much greater cell areas in the US drive the phones to run at much
higher power levels.

--> TransChip
Speaking of video sensing technology, Israeli mobile video
communications startup TransChip was demonstrating its CMOS-based
'video camera in a package.' President Avi Strum says they can achieve
CCD-like image quality with an integrated camera that includes the
optical sensor, the processing circuitry, and the color management
logic in a package that is smaller, cheaper and uses less power than
anything else out there.

TransChip's Japan hand is Kozo Imai-san, ex-head of Analog Devices
Japan, and it is looking for partners and customers. Strum admits that
the biggest technology risk is in integrating the MPEG-4 processing
logic ("it's tough to do"), but with luck there should be a finished
package ready by Q2 next year. I asked him if he was worried about the
competition from Japan, but Strum says the Japanese are focused on CCD
solutions, so the CMOS space is a good one to play in.

--> TruVideo
This 4-year-old Berkeley startup was founded by Dr. Avideh Zahor and
owns some patents related to video compression and transmission. The
company says its TruVideo DCT-based (discrete cosine transformation)
encoding and delivery platform will offer much better picture quality
at low bandwidth (10-60 Kbps) than MPEG-4. Greg Chow, an engineer with
the company, said that the firm started talkiing to DoCoMo USA last
year, which passed the relationship on to DoCoMo Japan. No word yet on
any joint activity. I saw the demo and, sure enough, the image quality
was noticeably better than on any of the MPEG implementations I've


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+++ CTIA Rumors and Scuttlebutt

**AT&T Wireless should finally get the US baby i-mode
launched by December 2002, about a year and a half late.
At this stage, there is still no word on what the service
will look like, who will provide handsets or technology,
nor whether AT&T will, like KPN in Holland, use the i-mode

**One grizzled tech journalist based in the North-East told me
that Motorola, AT&T's major handset vendor, is the 'driver'
behind AT&T Wireless' i-mode plans.

**The AT&T Wireless flavor of i-mode will be based on
IP/xHTML and not WAP.

+++ Subscriber Statistics, Corrections, Credits, Administrivia

2,121 as of March 25, 2002

January 1 - March 24: 10,292 page views (122 PV/day)

1-22 March: 3,945 streams (179/day); 41,505 mins; 31.4 hours per day

Wireless Watch newsletter and Wireless Watch Video Newsletter
researched and hosted by: Daniel Scuka (daniel@japaninc.com)
Edited by: J@pan Inc editors (editors@japaninc.com)

Wireless Watch Video Newsletter produced and edited by:
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