WW-94 -- Focusing on Camera-Phone Apps & Let's Put a Celly in Every Back Pocket

Wireless Watch Japan Mail Magazine
Commentary on the Business of Wireless in Japan
Issue No. 94, Tokyo, Tuesday, March 25, 2003
Subscribe for free: http://www.wirelesswatchjapan.com

Living abroad can be an exciting experience, but obtaining superior healthcare
abroad can be a challenge, and you cannot rely on public healthcare schemes, as
they either don't exist, or often provide inadequate cover. Furthermore, medical
evacuation to another country providing a higher level of medical care is often
necessary. With the vast array of international health insurance and personal
protection products marketed worldwide by individual companies, we offer the
unique service of independent consultation. We have researched the various
insurers and represent those healthcare plans that simply provide the best
coverage for the best price.

We invite you to have a look at www.globalhealthcover.com

Contact us for more information:
Banner Financial Services Japan K.K.
4F Esperanza Ebisu Bldg., 3-2-19
Ebisu-minami, Shibuya-ku, Tokyo 150-0022
Tel: 03-5724-5100 Fax: 03-57245300
www.bannerjapan.com www.globalhealthcover.com www.bannerjapan.co.jp

in this issue

++ Viewpoint: Focusing on Camera-Phone Apps & Let's Put a Celly in
Every Back Pocket

++ Wireless Notes
** Disney Dour on US Mobile; Games Don't Rock; Users Don't Use

++ Noteworthy News
--> DoCoMo 2G ARPU is Higher Than 3G
--> Need a Bus Ticket? Use Your Cell Phone
--> i-Mode Users Like Sites for Ring Melody, Wallpaper Data Most: Survey

++ Events (promotion)

++ Sign of the Times
"Too Much of IT May End your Love Affair"

++ Subscriber statistics, corrections, credits, administrivia

Coming March 26...

BeTrend is a quiet little mobile service developer closeted in SunBridge's
Venture Habitat. But they've created one of the coolest
customer-relationship/marketing-and-service apps we've ever seen and scored a
major automaker as their first client. The service won't even launch until next
month, but we bring you never-before-publicized footage. This show is a

"We Rip the Faceplate Off Japan's Wireless Industry"
For WWJ program sponsorship details, send mail to:

++ Viewpoint: Focusing on Camera-Phone Apps & Let's Put a Celly in
Every Back Pocket

I swapped some notes with Pernille Rudlin, a UK-based wireless consultant and
researcher, last week. She pointed out some interesting observations on the
Japan market arising out of a discussion with the Japanese partner of one of her

She mentioned an emerging trend in camera-phone usage, wherein as the camera in
Japanese phones gets better, it seems that users are treating it more like a
digital camera and less like a cell phone - and are taking even less interest in
the image communication functionality.

"In other words," she wrote, "they are taking photos but not sending them; just
using their camera phone as a photo album." As a result, the current image-based
services market is not that big, and everyone is trying to find the next killer
content after wallpaper and ring tones.

I wrote back that I agreed, sort of.

Yes, I have seen data indicating the contention that carrier revenue from
swapping pictures over the network is not great. But KDDI, for one, has said
several times that camera-phone users tend to use **all** device features more
than non-camera-phone users - and so generate up to 30% more ARPU.

Also, there are as yet few non-picture apps for cameras, but there are lots in
the works. You can already use the camera as a bar-code scanner (and so service
providers can generate e-commerce revenue from the camera even if carriers don't
earn that much data packet revenue) and you'll soon be able to use it as a
security feature as well (don't miss our upcoming video feature on Omron's
"Kaopass" face recognition service).

Also, look at how traditional chemical photo service providers (Kodak, Fuji,
etc.) have realigned themselves to handle digi prints; this is a new and growing
line of business. With DoCoMo's 505-series i-modes phones (due to hit the market
early summer), handsets will have very high-quality, mega-pixel-class cameras,
so cam-phone users will want to buy more of the services that digi-cam users
have already been buying - like kiosk printing (see link below).

Maybe the question is Who will earn camera-phone revenues - not, Are there any
camera phone revenues?

Pernille, smart lady that she is, agreed that "the real money to be made from
camera phone revenues is when applications and services are developed which go
beyond simple photo editing and sending photos to other people." But she added
that: "The trouble with a lot of the current photo-based services and
applications is that they are just lumped in with the 'purikura' (Print Club)
stuff (like I mentioned above) and that is seen as rather 'old hat' and not
where the growth is for content providers."

Hmmmm. It remains to be seen which one of us is correct, but she finished by
pointing out one fact that is depressingly true: the use of camera phones for
"deai" adult match-making services will no doubt continue to be a good cash cow!

Link to camera-phone printing kiosk story:


Like other professions, journalism has many unwritten rules. One of them is that
you make it a point to match the message to the medium - or match the message to
the audience - and avoid covering, say, rampant illegal business practices in
the beef packing industry in something like Better Homes and Gardens or the
Journal of Astrophysics. Accordingly, the WWJ Viewpoint column tends to shy away
from topics like politics in favor of other, more specialized, media.

But it seems to me that extraordinary times call for extraordinary thinking from
all of us and I would be remiss in not stating for the record what I believe to
be true.

There's a helluva battle unfolding in Iraq right now and while I wholeheartedly
support the individual men and women of the US, British, and other forces who
are fighting and dying to erase an indisputably evil regime, I can't similarly
support the political and diplomatic processes (or, rather, failures) that
brought them to the outskirts of Baghdad in the first place.

I, for one, believe that there is a connection between the business of wireless
and, to put it bluntly, freedom. The growing proliferation of mobile networked
devices is a force that no government can contain. Sure, the networks themselves
are controlled by Big Business with all the lack of freedom this entails, but
even that control is slipping.

When portable device-to-device networking becomes a reality (and it will), there
will be no stopping the free transmission of thoughts, ideas, dissent, and
individual expression. Look how the Kazaa P2P network is destroying the
conglomerates of old music media. The same will happen to governments that try
to control their populations, and it will be the most disenfranchised - in
places like Iraq - where people will best be able to use interconnected cellys
to boost emergent democracy movements - an application that makes Hello Kitty
downloads seem even more irrelevant and self-indulgent.

So, does what we in the wireless industry do, matter? Yes - more so than ever.
And while we may get too wrapped up in the minutia of i-mode, make no doubt
about it: packet communications in the hands of citizens is one of the strongest
forces for good yet created. And throughout this latest Middle Eastern crisis,
it isn't only in places like Iraq where peoples' voices have been ignored by

To those who would cry havoc and let slip the dogs of war I reply: cry freedom -
and put a keitai in every back pocket.

-- Daniel Scuka

PS>> There will be NO Wireless Watch Japan newsletter next week (Monday, March
31). Your humble scribe will be taking a few days off to relax at an onsen with
his wife and visiting relatives.

++ Wireless Notes

** Disney Dour on US Mobile; Games Don't Rock; Users Don't Use
(Reported by sr. contributing editor Michael Thuresson)

Wrap-up report from the West Coast:

Disney Internet Group is not expecting its US operations to approach its
success in Japan anytime in the near future, one of their executives told me.
The guess here is that things will change when color phones saturate the
market. One in every three cell phones in the US will have a color display
within 6 months, according to Seamus McAteer at Zelos Group, a San
Francisco-based technology consulting firm.

THQ Wireless, a division of L.A. entertainment software maker THQ, now has 50
game titles in the US, up from 20 a year ago (see last week's Wireless Notes).
They told me one area they are working on is helping the carriers train their
retail salespeople on how to get people to sign up for data services when
buying a phone. This has been a problem, apparently.

THQ Wireless, which is known for its sports games, has had games running in
Japan through Cybird since December, but they told me the performance has been
disappointing so far. The content must be updated frequently to keep pace with
the ultra-competitive market - taking more of their resources - and is sold at
a lower price than their US games. The US market, though still small, offers
bigger margins.

Verizon claims to have sold over a million BREW handsets in the US since last
September, but a good portion of people with these aren't using data at all.

-- MT

Retail Japan 2003:
The first-ever, complete guide to Japanese retail and consumer markets.

Over 500 pages, 22 different product sectors, and more than 2,000 companies
indexed. With detailed analysis, strategic reviews and forecasting, Retail Japan
2003 provides in-depth insight into retail markets in Japan today.

Free sample sections and the complete contents guide at:

Or email us at:

++ Noteworthy News

--> DoCoMo 2G ARPU is Higher Than 3G
Source: 3G Newsroom, Mar. 19

EXTRACT: NTT DoCoMo generates less ARPU from customers on FOMA 3G wireless
service that enable video-conferencing and high-speed Internet access than those
on conventional 2G i-mode service, the Financial Times Deutschland reported,
citing board member Takanori Utano. "Data revenues per customer are below those
that we have with the systems of the second generation," the paper quoted Utano
as saying. There aren't enough applications for 3G technology, the FTD said.
"The attraction of developing applications is not large enough given the low
customer total," Utano told the paper.

COMMENTARY: This is, perhaps, today's wireless news of lasting significance.
From October to December 2001, DoCoMo 3G ARPU was 10,400 Yen per month, a figure
some 25% higher than the 8,500 Yen for 2G, according to this news item. But in
2002, FOMA ARPU fell to 8,300 Yen while 2G ARPU reminded more or less the same.


--> Need a Bus Ticket? Use Your Cell Phone
Source: Asahi Shimbun, Mar. 20

EXTRACT: Travelers on some long distant bus routes will be able to pay fares
using cellular phones from the end of this month, thanks to a tie-up between
Matsushita Electric Industrial Co. and bus firms. The electronics giant aims to
introduce the ticketless service on about 80 routes operated by 40 firms during
fiscal 2003 and hopes to extend it to theater and other ticketing in the future.
Customers can make and download reservations on Internet-capable mobile phones
and pay by credit card. When boarding, passengers show the driver their phone
screens displaying the reservation details and their credit card. By late April,
eight companies operating on four routes, including Tokyo to Osaka, are expected
to be offering virtual ticketing.

COMMENTARY: More evidence that one of 2003's biggest stories will be the
provision of true e-commerce via keitai. Don't miss our upcoming video feature
on BitWallet's emoney service, now under intensive development work by carriers
and others for adoption onto cell phones. BitWallent is a JV between, among
others, Sony and NTT DoCoMo.


--> i-Mode Users Like Sites for Ring Melody, Wallpaper Data Most: Survey
Source: NEAsia Online, Mar. 19

EXTRACT: Infoplant Co., Ltd., an Internet research company, said that NTT
DoCoMo's i-mode users mostly bookmark and view sites that provide ring melodies
and wallpaper images, and least favor mobile banking and trading sites.
Infoplant conducted a survey from Feb. 24 to March 3, 2003 on the usage of
Internet sites registered under the i-menu. According to the survey, 95.5% of
the respondents bookmark their favorite sites in the "My Menu" section of the
i-menu. Among those bookmarked, the most favorite destination sites are ring
melody data and wallpaper image data.

COMMENTARY: The survey found that ring tone and wallpaper sites were accessed
very often by 73.1% of respondents. News and weather sites were second (29%),
while mobile banking and trading sites came is at 5.1%. 36,666 i-mode users
answered the survey. It's worth accessing the original story to see the table of
results by age and gender. Looks like things haven't changed much since the
first few months of i-mode - back in 1999!

++ Events (promotion)

Brand Mythology: results-driven strategies to leverage the brand story
Four Seasons Hotel, Tokyo
Wednesday May 28th 2003

Main issues to be discussed:
- Fusion of the brand and business strategy
- Brand management in crisis and recession
- Delivering global brands in foreign markets
- B2B targeted versus consumer sector branding
- Global and local case studies of failure and success

Online registration is available at:

++ Sign of the Times

Too Much of IT May End Your Love Affair
Japan Times, Mar. 11
When Rei Nagashima, a 20-year-old university student, first saw the
new-fangled mobile phone, she thought it was pretty cool, not to mention
harmless. Equipped with a tiny camera, the sleek device could take and send
not only photos, but video clips as well. It was given to Nagashima (not her
real name) by her wealthy boyfriend after she taunted him, half jokingly, to
buy her a new mobile phone. The boyfriend also seemed to think it was rather
nifty, and in the following days he made repeated requests for more of
Nagashima's homemade videos. Yet after about a week, Nagashima sensed an eerie
change in her boyfriend: His appetite for the video e-mails quickly grew to
insatiable proportions. "He even specified the ways in which the video should
be shot, like saying, 'Take it from such-and-such an angle,'" she says. Spa!
says Nagashima and her boyfriend are part of a new and fast-growing breed:
young couples whose relationships have been destroyed, or at least put
severely to the test, by the latest generation of IT gadgets.

... as Arthur C. Clarke once said, "The universe is not only weirder than we
imagine, but weirder than we can imagine" ...

Subscriber Statistics, Corrections, Credits, Administrivia
PS>> There will be NO Wireless Watch Japan newsletter next week (Monday, March
31). Your humble scribe will be taking a few days off to relax at an onsen with
his wife and visiting relatives.

3,940 (via japaninc.com and wwj.com) as of Mar. 25, 2002

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 digital media producer:
Lawrence Cosh-Ishii (lcosh-ishii@wirelesswatchjapan.com)


Text copyright (C) 2003 WirelessWatchJapan.com. All Rights Reserved.
Reproduction in whole or in part by any means without written permission is
strictly prohibited. WWJ Mail Magazine is republished by J@pan Inc magazine by
special permission.