Push-to-Talk failure in Japan

Mesmerized by the US Nextel's success with its PTT service running on Nextel's proprietary iDen network in early 2000's, Japanese carriers including DoCoMo and KDDI au also introduced similar services utilizing existing cellular networks in Japan in 2005. However, the concept never really took off in Japan. According to DoCoMo, about one hundred thousand users use the service on a monthly basis. As the result, both carriers announced the pending retirement of PTT services with KDDI au shutting down its in August this year, followed by DoCoMo with the plans to close the service in September next year.

Source: IT Media

KDDI au signs up one million fitness fans

In penetrated markets you need to dig deeper past the usual gender and age demographics to uncover untapped user segments. The proven method is to utilize a lifestyle marketing catering to different user needs. The first thing that would come into mind is probably sport and fitness lifestyle. And KDDI au recent endevour with au Smart Sports service shows that it works - the carrier has just announced one millionth subscriber. The au Smart Sports service offers two options Run & Walk and Karada Manager (Body Manager). With Run & Walk compatible phones you can set various modes like running or cycling mode and track and upload the data onto the web. Karada Manager offers means to set your personal health goals and provides advices on achieving them. KDDI au also partnerd with Adidas to provide branded phone pouches for au Sport Smarts users.

Source: KDDI au press release

Toyota, KDDI link phones with car navigation systems

Driving Toyota has just become funnier as the company partnered with KDDI au and Navi Time to provide EZ Navi Link service bridging mobile phones with car navigation systems. With EZ Navi Link service, au users can search for driving destinations on their mobile phone and then push the search results to car navigation via Bluetooth connection, which should improve the user experience with Toyota cars and au phones and save time by not typing in destination address. The service is free but users will access mobile web search services that will contribute to au's data revenue stream.

Source: KDDI au via Keitai Watch

First waterproof phone with solar panels to go on sale in six months in Japan

In six month the world or at least people in Japan will witness the first phone featuring solar panel to go on sale. Manufactured by Sharp the new wonder will hit the shelves of the second biggest operator KDDI au. The companies claim that 10 minutes of charging by the sun will be enough for 1 minute talk or two-hour standby time. The solar panel will be able to charge the battery to 80% of its capacity, serving as an alternative to electricity and thus reducing the potential carbon dioxide release into the atmosphere. But being greenish wasn't enough for Sharp as it also made its phone waterproof, which added uniqueness to the product.

Source: KDDI au press release

Japan finishes 2008 with 110 million mobile phone subscribers

The “low-baller” competition led by Softbank and eMobile is on in Japan and DoCoMo seems to be back in the game while KDDI and Willcom are out of steam. The December 2008 new adds data from TCA shows just that (see above). Overall, Japan carriers including PHS operator Willcom added 401 thousand new subscribers in December 2008 boosting the country’s total number of mobile phone users to over 110 million equal to 87% of population penetration.

As for the carrier market shares, DoCoMo is in comfortable first-class seat with over 49% of the market while the second and third contenders KDDI and Softbank are chugging behind with 27% and 18% market shares correspondently (see below).

Source: TCA

HTC aims for 5% of Japan mobile handset market

This week HTC held a press conference in Japan to share its vision and strategy of tackling Japan mobile handset market and also to mark the launch of HTC Touch Pro and HTC Touch Diamond devices along with Touch FLO 3D user interface. 

HTC's outlook for Japanese operations is positive with optimistic goal to grab 5% of domestic unit shipments in near future. HTC will need to ship about 2.6 million devices annually in order to achieve its 5% goal (annual handset shipments in Japan reached 52.3m in 2007, according to Gartner).

HTC's confidence is based on global success of HTC Touch smartphone, which sold in almost 3 million devices from its launch in 2007. The new and enhanced Touch-based models Touch Pro and Touch Diamond should drive more sales, according to HTC. Having launched HTC Diamond in May 2008, HTC reports global sales of 1 million devices with the forecast of 3 million shipments by the end of October 2008.

Along with new devices, HTC also refined its strategy in Japan, including the following moves:

• Target multiple carriers by shipping HTC Touch Diamond to DoCoMo, Softbank, and eMobile and HTC Pro to DoCoMo, KDDI au, and Softbank
• Provide a thorough localization for Japanese carriers enabling carrier-specific email, menus, text input, navigation apps in Japanese
• Bring HTC's latest handsets to Japan in timely fashion (in sync with global launch)...

Source: IT Media +D Mobile

iPhone sales go flat in Japan?

Market research company GfK has just released handset sales rankings for the first week of October in Japan. Surprisingly, Apple iPhone didn't make it to the country's top ten and even ended up third in Softbank's line up. Talking about the novelty effect evaporating...Overall, October is a slow month in Japan as the industry holds its breath for carriers' winter handset lineup announcements. But will Apple have something new to offer? I doubt that. To make it worse for Softbank, an iPhone's operator in Japan, none of its models was listed in top ten list. At the same time DoCoMo's models occupied the top list taking seven out of ten positions including the first top three. Unfortunately, GfK doesn't make public the handset sales numbers but at least you can see the top ten list below:

1. Panasonic P906i (NTT DoCoMo)
2. NEC N906iμ (NTT DoCoMo)
3. Sharp SH906i (NTT DoCoMo)
4. Sharp W62SH (KDDI au)
5. Toshiba W61T (KDDI au)
6. NEC N706iμ (NTT DoCoMo)
7. Panasonic 706iμ (NTT DoCoMo)
8. Fujitsu Raku-Raku Phone V (NTT DoCoMo)
9. Sony Ericsson W62S (KDDI au)
10. NEC N706iII (NTT DoCoMo)

Source: GfK via ITMedia

Japan handset distribution channels: over 10,000 kiosks

Japanese wireless carriers control the significant part of the handset retail distribution channels – approximately 80% belong to carrier-owned stores. According to M-Report’s estimates, top three carriers, including NTT DoCoMo, KDDI au, and Softbank own over 8,000 retail kiosks. Consumer electronics stores and general retail account for additional 2,000 POSs, making the total number of specialized mobile phone stores over 10,000.

Source: M-Report

Social network GREE grows to 4 million users

GREE claims to be the first social network to be launched in Japan. The company has grown to 4 million user base since its launch four years ago. GREE sees its success in delivering appealing content such as user interests-based interactivity (Music Corner service), games (online-based 3D golf), news made accessible from both the PC and mobile phone. The company has a partnership with KDDI au, which recently announced that two million of its mobile phone users are GREE members. GREE has a goal to increase its user base to 10 million in near future. While GREE maybe the oldest social network on the block it is not for sure the most popular in Japan. The most successful rivals include Mobage Town and mixi social networks.

Source: GREE press release (Japanese)

Related articles:

• Mobile social network Gree adds another million users
• Mobile social network EZ Gree grows to one million users
• Study: mobile social networking usage in Japan

KDDI au’s Full Game: 10MB games targeted at mobile users

KDDI au, one of the biggest supporters of Qualcomm’s BREW platform outside of United States, took the advantage of BREW 4.0 capabilities and deployed a mobile game service called Full Game that provides high-quality 3D mobile games for download. The Full Game service is based on the precise rendering capabilities of KCP+ platform (KDDI Common Platform) based on Qualcomm's MSM7500 graphic chipset. To deliver a smooth 3D gaming experience the game’s file size reaches 1.5MB plus up to 8.5MB of supporting data. There are six Full Game-compatible handsets, including the W56T、W54S、W54SA、W61SA、W61T、and W61S models with more to follow. Initially, there four titles, which will become available for download from February 28.

Source: KDDI press release (Japanese)

Sharp handsets do magic and spur mobile web usage in Japan

CNet Japan reported Be Trend’s research results about the mobile internet usage in Japan in January 2007. First, they show the breakdown of mobile internet access shares by carrier. The trend here reflects the recent turn around at Softbank, with carrier’s share surpassing 9% in January and gradually heading to a 10% milestone. Nevertheless, NTT DoCoMo still holds the lion’s share of mobile phone users accessing mobile web.

What is more interesting is that Be Trend was able to track down the mobile web access statistics to a single handset model, publishing top five models for each carrier. First come DoCoMo handsets with the top five ranking being occupied with spring and summer models of 2007. However, the latest models of 905i series also start penetrate the ranks, with Be Trend reporting that the P905i has made the Top 10 list with a 2.7% share.

Sharp entered KDDI au’s Top 5 list the W52SH model for the first time. Considering Sharp’s leading positions with other carriers, this success with KDDI au tells that Sharp has found a winning formula to manufacture both the CDMA and WCDMA handsets with appealing design and user friendly interface.

Softbank’s Top 5 list of devices used to access mobile web is dominated by Sharp model – only Toshiba handset prevents Sharp from taking all five positions.

Source: CNet Japan (Japanese)

Signs of LTE becoming a 4G technology of choice emerge in Japan

It is no wonder that WCDMA carriers like NTT DoCoMo and Softbank in Japan might pick LTE (Long Term Evolution) cellular technology for the upgrade of their current 3G networks. After all, LTE is considered to be a more optimal path for them than alternative 4G technologies, such as WiMAX. As a matter of fact, DoCoMo is already moving into that direction as it just announced the selection of Ericsson for its LTE base station development project. The two companies have a long history. Since 1992, Ericsson has delivered PDC base stations to NTT DoCoMo and, more recently, W-CDMA base stations for the operator's FOMA network. However, there are signs that even carriers from opposite to UMTS camp – CDMA, are hesitant about upgrading from their CDMA EV-DO networks to the Qualcomm’s proposed UMB (Ultra Mobile Broadband). CDMA carriers worldwide, Verizon Wireless, Vivo, KFT and SKT in Korea, made a pledge for the WCDMA upgrade path. What’s more interesting is that Japan’s CDMA carrier KDDI also seems to be evaluating its options about 4G. upgrade. According to Jean-Pierre Bienamé, chairman of the UMTS Forum, he senses a change of direction in the KDDI boardroom. “They have frozen development on EV-DO Rev A and are now assessing Rev B and Rev C alongside all the other options, including WiMAX and LTE. The decision criteria will be on cost reduction per bit and it is here where LTE has an advantage,” he said in an interview to Telecommunications Magazine.

Mobile social network Gree adds another million users

Last August we reported that mobile social network Gree on KDDI au had reached a milestone of one million users. And now it is time to update that data with another million to a total number of two million users, which roughly constitutes 2 percent of Japan’s total wireless population.

Source: KDDI au press release (Japanese)

KDDI au's top ten selling phone models

GfK, a market research company, published ranks of top selling mobile phones with each operator in Japan during the last week of November. This post will cover KDDI au. See table below for the top 10 sellers with au brand.

KDDI au Top Ten
1 (1)	Toshiba W53T
2 (2)	Casio Exilim W53CA
3 (3)	Sharp W52SH
4 (4)	Sanyo W52SA
5 (5)	Kyocera A5528K
6 (8)	Sony Ericsson W53S
7 (6)	Casio W52CA
8 (7)	Panasonic W52P
9 (9)	Toshiba W54T
10 (20)	Kyocera W53K

Source: GfK via ITMedia

Google Japan intros new single portal for domestic mobile operators

Now mobile phone users of NTT DoCoMo’s iMode, KDDI au’s EZ Web, and Softbank’s Yahoo! Keitai data services have one uniform URL they should use to get to Google Mobile - google.jp. Google Japan redesigned the mobile search method by getting rid of radio buttons with Web, Mobile and Images search options, leaving it to just a simple universal search. Google also report they optimized the local search and display of maps on mobile handsets. While this announcement is a step ahead for Google Mobile in Japan, it looks like the Japan’s team has a lot of localization work to do when comparing the array of mobile services available in the U.S. with those few offered in Japan (see image above).

Source: Google Japan Blog

10 million of mobile wallet users at KDDI au

Contactless payment solutions continue to penetrate mobile phones in Japan at the accelerating rates. KDDI au registered 5 million mobile wallet users in March 2007, now they report 10 million users or 35% of their total subscriber base is actively using mobile phones to make all kind of purchases you do in your daily life. Thanks to the adoption of FeliCa, a flavor of Near Field Communications standard, by all major carriers the POS locations don’t have a headache of prepping different readers in order to process the mobile phone transactions. FeliCa rules in Japan. Expect the similar solutions to be deployed by AT&T, maybe even in 2008.

Source: KDDI au (Japanese)

KDDI au ships Hitachi Woo mobile TV phone

Mobile phones with built-in one-seg TV tuner are driving replacement sales in Japan, making any self-respecting handset manufacturer release its version of mobile TV phone. Now that everybody does mobile TV phone, how are you supposed to differentiate your product from the bunch of others. Well, there are some ways to do so. First of all, you are in luck if your company is also in flat-screen TV business, because you can borrow its established brand and re-use it for mobile phones. As a result, we have Sony Ericsson Bravia, Sharp Aquos, and Panasonic Viera mobile TV phones attacking the market. Hitachi is not exception here as it also uses its TV brand Wooo to woo mobile phone customers. In order to make the appeal of Wooo handset stronger, Hitachi says they adopted the same graphic quality control technology Picture Master they are using in Wooo TV sets. Besides, the external design of the Wooo handset also borrows from the Cutting Edge Design concept used in Wooo TVs. To further differentiate itself Hitachi brings into play Wide QVGA organic light emitting display that complements handset’s slim body (14.2 mm) in a very cool way. Not to mention handset’s 2MP camera, contactless payment capability, GPS navigation and full HTML browser. KDDI au is shipping it this week at unknown price under the Wooo W53H model name. I can only say, “Wow Wooo!”

Phone Specs
Model:	Wooo W53H
Carrier:	KDDI au
Maker:	Hitachi
Price:	N/A
Form factor:	Clam/Swivel
Color variations:	Black, White, Purple
Weight:	131 g
Dimensions:	51 X 107 X 14.2 mm
Main display:	2.8 inch WQVGA (240 X 400 pixels) OLED
Talk time:	250 min
Standby time:	360 hours
Platform / OS:	N/A
Memory:	100MB shared with BREW folder
Memory card slot:	microSD card
GPS / Location:	Yes (EZ Navi Walk - Voice input 3D navi)
Bluetooth:	No
Infrared:	Yes
USB:	N/A
Wi-Fi:	No
Camera:	2MP
Video calling:	No
One-seg TV:	Yes
Music player:	Yes (Lismo, SD Audio)
Browser:	Full HTML
FM radio:	No
Mobile Wallet:	Yes (EZ FeliCa, QUICKPay)
QR-code:	Yes
Biometrics:	No

Source: KDDI au

The launch of Toshiba W55T is limited to 3,000 models

KDDI au is launching today a limited edition of Toshiba’s super slim W55T, with only 3,000 models to be sold. KDDI is targeting the handset, which size-wise emulates the business card, at style-conscious business customers who value exclusivity and personalization. The personalization comes with the ability to engrave the owner’s name, initials or some citation on the stainless back panel of the handset. As for the accessories, the Weinheimer design house has created a leather case that looks like a business card holder and features an imprinted serial number of the handset.

The exclusive and limited offerings of cell phones are still rare occurrences in the mobile world but it can change with the saturation in the mature markets. Currently, to drive the replacement sales in such market carriers are introducing technological advancements in new handset models. While these tactics seem to be working in approaching the mass market, the carriers can’t afford to overlook the market segments that don’t want bells and whistles of advanced mobile phones. The strong interest to design and fashion from users, along with the desire to personalize your phone, is growing trends that will make carriers and handset manufacturers sell more limited and exclusive handset models in future.

Phone Specs
Model:	W55T
Carrier:	KDDI au
Maker:	Toshiba
Price:	$485~$290
Form factor:	Clamshel
Color variations:	Golden, Platina, Black
Weight:	104 g
Dimensions:	54 X 94 X 9.9mm
Main display:	2.4inch QVGA (240X400)
Talk time:	22o min
Standby time:	240 hours
Platform / OS:	N/A
Memory:	N/A
Memory card slot:	microSD
GPS / Location:	GPS (EZ Navi Walk)
Bluetooth:	No
Infrared:	N/A
USB:	No
Wi-Fi:	No
Camera:	2.0 megapixels
Video calling:	No
One-seg TV:	No
Music player:	Yes (LISMO)
Browser:	PC site viewer
FM radio:	Yes (EZ-FM)
Mobile Wallet:	No
QR-code:	Supported
Biometrics:	No

Mobile phones as fashion statement

The idea of mobile phone serving as not only a personal voice or data communications tool, but also as a fashion differentiator helping consumers complement their designer clothes is not new. However, in Japan, KDDI au moved a notch ahead in co-branding with famous designer houses (see the image above).

Celebrity hairstyle: use your mobile to see if it fits you

Japanese mobile phone users got a fun application I would also like to have on my cell phone. The application, dubbed as Hair Chen, allows you to select trendy hairstyles from a sample database and apply them to your own picture to see how you’d look with that new hairdo. You’ll find a lot of Japanese celebrities in that database as usually they are the trendsetter for hairstyles. For starters, the sample database will contain around 80 virtual wigs to try on, but eventually it will grow with the time.

The Hair Chen application is not offered as a standalone, but rather serves as a bait to lure users to the same-named portal that aggregates nationwide data about hair salons and related information. The portal relies on a subscription-based model to make a profit, charging JPY315 (USD2.67) a month. While KDD au users had this application at their disposal from 2003 DoCoMo users got access to it only recently. The application developer Rstream partnered with hair salon operator Taya to feed the portal with the relevant data.

Source: Source: Rstream (Japanese)

Mobile social network myMTV selects Japan for debut

Viacom decided to test mobile social networking waters in Japan with a bang - claiming to be the "first in the world to offer simultaneous video and page-browsing on mobile." I'm not sure how it works in reality but can suggest it splits the screen in two parts.

Among other perks users will be allowed to use artwork by Japanese designers to decorate their personal pages and provided with access to the feature programming from "MTV's library, such as Pimp My Ride, and Japanese productions such as Usavich."

"The service is ad-supported and free to consumers, and is available on all three of Japan's mobile operators, NTT DoCoMo, KDDI and Softbank Mobile," according to C21Media.

Mobile social network EZ Gree grows to one million users

Launched in November last year mobile social network EZ Gree is growing in user numbers with an accelerating speed. Having hit 500K milestone in March 2007, EZ Gree’s user base passed one million in July.

The mobile version of Gree is offered in a partnership with the second largest carrier in Japan KDDI au who plans to integrate its other mobile data services, including LBS, into the Gree platform. At the moment, besides the ordinary social networking stuff, EZ Gree’s users can send each other html-rich emails (Deco-mail) and play Flash-based mobile games.

Source: KDDI au press release

Google befriends with KDDI, plans global expansion from within Japan?

First Google powered KDDI au’s mobile search platform in July 2006, fetching mobile screen-optimized search results from KDDI’s own EZWeb service and conventional Internet. Now, it will offer the rebranded version of Gmail under the "au one mail" name. So, instead of @gmail.com the email address will look like @auone.jp. KDDI au users will get the service for free and be able to access it from both PCs and cell phones around from late September. Like Gmail, the service features familiar simple user interface and the mail box size is set to be 2GB.

Both KDDI au and Google are to benefit from this co-branding partnership as the former shows its users a new and friendlier Web 2.0 face and the latter penetrating into the walled gardens of mobile world and gaining mobile expertise. KDDI au’s strategy is in a striking contrast with DoCoMo’s protective build-it-yourself approach.

Mobile lessons learned by Google in Japan can help the company better compete on global arena. This was partially confirmed by Google’s Strategic partner development manager in Japan John Lagerling who said at Wireless Japan 2007 conference that Google wanted to develop mobile services in Japan and introduce them globally. With his previous business development experience at DoCoMo, working on i-mode international expansion strategy and mobile wallet projects, he seems to be determined to make it happen for Google. According to John Lagerling, Google’s global mobile strategy is built around three blocks: 1) Personalized search; 2) Cell phone-optimized mobile services; and 3) Partnerships with various industry players. Of course, each country’s specifics are taken into account when developing mobile strategy for one particular market.

John also provided interesting statistics about Internet usage in Japan, saying that among 85 million users, 16 million access Internet only from PCs and 19 million (1/4 of all Internet users) do it only from mobile phones, while 50 million don’t mind surfing the net from both PCs and cell phones.

Sources: Yahoo News and IT Media

KDDI au quarterly results: voice ARPU declines faster for data ARPU to fill the gap

KDDI au posted its 1Q financials results for the fiscal year ending March 2008. Here are some highlights:

• The number portability rule continues to play out well for au as the total mobile number portability net additions (since Oct. 24, 2006) hit the one million mark in June 2007.
• In 1Q, net additions reached 520,000 customers.
• In an accord with healthy additions, the churn rate also improved, going down to 0.97% from 1.04% a year ago.
• While data ARPU went up 5.6% or JPY110 (1 dollar = 120.08 yen as of today) from last year it was not sufficient to cover the losses in voice ARPU, which declined by 10.1% or JPY490 for the same period. This resulted in the total ARPU declining by 5.6% or JPY380 year over year. For comparison, a year ago the total ARPU stood at JPY6,810, while now it is already JPY6,430. For the same period, data ARPU grew from JPY1,970 to JPY2,080.
• KDDI is pessimistic about its ability to reverse the situation with the declining ARPU, estimating its overall ARPU would fall further, including data ARPU. The main factor behind that is the amplified mobile data price war among national carriers in Japan.

Source: KDDI

Casio mimics Sony branding strategy, shows Exilim cameraphone

Consumer electronics brands are being adopted by mobile handset arms of Japanese CE manufacturers. The trend started with Sony allowing its joint venture with Ericsson to sell featured mobile phones under Sony’s well-known Walkman, Cybershot and Bravia brands. Now Casio follows suit by assigning its Exilim digital camera brand to the cameraphone destined to be offered by KDDI au in Japan in near future. The rumors of Casio Exilim cameraphone surfaced first back in May and now it looks like its debut is imminent, according to ITMedia report from Wireless Japan 2007 trade show happening in Japan this week. The phone spots 5.1MP camera supported with specially developed Exilim Engine for Mobile. Interesting part is that the phone has a clamshell form factor with swiveling screen protecting it from scratches when not used and allowing using it as a huge viewfinder (VGA 2.8inch) in a shooting mode. More specs and pricing details are coming after KDDI au’s official announcement.

Source: IT Media (Japanese)

Japanese users think iPhone is fat

When asked what additional features they would like to see in iPhone if it was offered in Japan, majority of Japanese users (44.6%) pointed out to the lack of built-in TV tuner, according to online survey results published by research company iShare (1,341 respondents). The wish list for iPhone continues with the upgrade to 3G speeds (37.1%) followed with the inclusion of GPS (36.2%). Surprisingly, a lot of respondents (34.6%) think iPhone is not slim enough, while a rightful number of them want higher resolution camera (33.1%) and removable memory (33.1%).

DoCoMo is perceived as the least likeable carrier to offer iPhone in Japan (17.1%) among the three national cell phone operators, while SoftBank’s chances are the highest (53%) followed with KDDI au (19.6%).

Source: iShare (Japanese)

Softbank last to hit 50% milestone with 3G subs in Japan

Having added 560,100 subscribers to its 3G service in April, Softbank finally passed a 50% 3G penetration milestone for its subscriber base. The leader in conversion cell phone users from 2G to 3G camps remains KDDI au, which has managed to get 97.9% of its total subscriber base to be equipped with 3G phones. DoCoMo so far persuaded only 69.1% of its customers to switch to 3G.

Japan’s mobile phone market: 2006 results

Japan finished 2006 with a 71.8% wireless penetration rate, which translates to 91.8 million people. Obviously, with the increase of the penetration rate, the net additions are slowing down with each year – 5.5m in 2005 versus 4.8m in 2006.

In 2006, the wireless market in Japan was dominated by DoCoMo with 51.1m users, trailed by KDDI with 25.4m of combined au and Tu-ka user bases, leaving Vodafone KK (now Softbank Mobile) on the third place with 15.2m customers.
The area, in which KDDI outperformed DoCoMo is ARPU, reaching JPY7,040 compared with DoCoMo’s JPY6,910. Vodafone traditionally finished in third place with JPY5,890.
Handset shipments have actually increased in 2006 hitting 48.7 million units compared with 44.8 million in the previous year, but less than 51 million handsets shipped in 2004.

KDDI au grabs 60% of one-seg handset market share

If you stop somebody at the streets of Tokyo who is watching digital broadcasting TV on his mobile handset and ask who is his carrier provider, chances are high the answer will be KDDI au. Having started selling its first one-seg model – the Sanyo W33SA (discontinued) – in December 2005, KDDI au expanded its one-seg portfolio to 12 models, resulting in two million units sold as of February 23, 2007. According to GfK Japan, au group has sold more one-seg compatible handsets than its rivals, grabbing 59.96% of the total market share. The early start and variety of one-seg models predetermined its leading position. In related news, the U.S. based MobiTV announced that it has crossed the two-million subscriber mark. It took some seven years for the company to get off the ground and sign up its first million customers, which it announced last April. Scoring its second million took just 10 months.

Disruptive technologies and competition to undermine the hegemony of NTT DoCoMo

Financial Times reports (January 25, 2007) that “DoCoMo is forecasting a small drop in operating profit this fiscal year.” There are several directions from which the giant feels uneasiness. First comes the number portability that sparkled a price war initiated by Softbank (ex-Vodafone). It also became clear that another DoCoMo’s rival – KDDI au was the biggest winner so far from number portability. Number portability combined with Japan’s traditional fat handset subsidies, of about $300-$350 a piece, alone could affect the profitability. To continue the list of disruptions, FT lists:

• Arrival of fixed/mobile convergence (meaning more bundling);
• Small operators bringing in Skype-type services; and
• Further regulatory changes.

The question remains whether operators such as NTT DoCoMo accept their utility-like (dumb pipe) status or successfully fight off the trend with counter measures. So far, the indications are that they are going for a big fight.

KDDI au auction site hits 500,000 milestone

KDDI au auction site has finished 2006 with 500,000 subscribers, paying subscribers (JPY315/month). It took two years for KDDI to hit this milestone and before October 2006 the auction was strictly mobile-only. Now, it offers the PC version as well.

Source: IT Media

Mobile social networks are coming to Japan

Japan is experiencing the hype of mobile social networking. This week, MySpace and Softbank announced plans for a 50-50 joint venture to bring the popular Internet social networking site to Japan.

Next, on the wave of this news, another US company - Gemini Mobile Technologies - announced it would power 3D mobile communities of Softbank's service S! TOWN. The Gemini platform, called eXplo, will enable 3D chatting, shopping, and other S! TOWN community features via cell phones. Gemini also announced that its multimedia messaging software, the HyperScale Messaging Center, and its HyperScale core technology are the engines behind an additional new Softbank Mobile service, Arrange Mail.

On the domestic front, KDDI is about to launch EZ GREE mobile social network, the deployment of which is scheduled for November 17. While the subscription to EZ GREE is free, users will need to have a data plan with KDDI. EZ GREE is a mobile version of the GREE social network site that has been popular for some time in Japan. The mobile version will be linked with other services and applications from KDDI's portal such as EZ News Flash, au My Page, horoscopes and game scores or various test results. Users will also be able to decorate their profiles, messages and mobile diaries with pictures, smilies and frames.

Only NTT DoCoMo remains silent about its mobile social network plans. While it is not too late, they should snap a partnership deal with mixi - the most popular social network site in Japan in order to not be left behind. Once, they have already lost a leadership in mobile music services to KDDI au.

US wireless companies knocking on Japan's door

What caught my eye this morning is an unusually high number of announcements about the US companies trying to enter Japan's mobile market. Is it just a coincidence or some seasonal peak of activity? Anyway, read them below as follows:

Start-Up Amp'd Mobile to Sell Entertainment Content in Japan
MVNO Amp'd Mobile said it has inked a deal with KDDI Corp. to sell U.S. film clips, music videos and other entertainment content in Japan. The pact reflects an effort by Amp'd to expand into markets where a greater percentage of mobile phone users subscribe to and use data services. Source: Wall Street Journal

NTT DoCoMo, Intel help companies customize phones
NTT DoCoMo said it has teamed with Intel to develop terminal specifications that provide an open domain for companies looking to customize handsets with special operating systems or applications. Source: Unstrung

Sierra Wireless Formally Enters Japanese Market
Sierra Wireless is making an official play for a piece of the 3G wireless market in Japan, thanks to a newly signed deal with Tomen Electronics Corporation. The deal makes Tomen the primary distributor of Sierra Wireless' 3G products in the country. Source: Wireless Week

Toyota Lexus phone rumored, TiMO already sells

There are some rumors that Toyota and KDDI engineers are back to labs to come up with Toyota handset under the Lexus brand. While KDDI couldn't confirm the rumor, Toyota and KDDI are already selling another joint product - TiMO cellphone just started selling in a specialized chain PiPit. Based on Toshiba's W44T Bluetooth-enabled model TiMO carries Toyota's logo and offers one year of free service with Japan's road emergency network HELPNET Keitai tailored for mobile phones. Among other perks are one year of free game and ringtone downloads from a specialized portal and one-button customized access to Toyota's mobile portal GAZOO. Besides, TiMO owners with a Toyota car can customize the handset for the "hands-free" access to Toyota's navigation system via Bluetooth. As an option, users can also buy a car charger that serves as a dash-board cellphone holder at the same time.

Japan wireless subscribers: September 2006 data

TCA's mobile phone market data for September revealed that Japan's wireless user base has increased by 315,000 users since August, totaling in 93,812,400 wireless subscribers. On the wireless carrier front there were winners and losers, with KDDI au getting 312,500 subscribers while KDDI's another brand - 2G carrier TU-KA - lost 151,700. But TU-KA can be hardly called a loser as KDDI's goal is to transform TU-KA's 2G user base to au's 3G services. Meanwhile DoCoMo managed to sign up 126,300 new users and Softbank continued Vodafone's tradition of adding the fewest of customers among three carriers (I exlude TU-KA from this competition) - it recorded only 23,400 net additions in September.

Source: TCA

KDDI au sold 50 million full-song downloads

KDDI au reported the 50 millionth full-song download in May 2006. Having started the music download service in November 2004, KDDI au was gradually increasing the number of sold songs, with downloads accelerating after first half of 2005 when in June 2005 the company hit the 10 millionth mark. The song downloads are available over the air (OTA) directly onto handset or via LISMO service, a PC side loading alternative. There are around 80 music stores selling full-song downloads for KDDI au users with a total number of songs available to be 150 thousand. The number of compatible handset models, including the recently announced 7 models, climbed to 34. At the end of November 2005, there were almost 5 million KDDI au handsets shipped with the OTA music download capability in Japan.

KDDI reports one million GPS users

Credit: IT Media

KDDI au announced that its paying user base of mobile GPS services had reached one million. KDDI started offering GPS-enabled cellphones in 2003 when it introduced a navigation service oriented on pedestrians. The service was able to pinpoint user’s current location and navigate him to the desired destination point by providing voice and on-screen instructions real time. In 2005, KDDI added another navigation service, targeting car-drivers with the ability to announce crossroads and re-calculate the route. Both services were developed by the company called Navi Time Japan.

20-to-1: Japan's mobile vs. PC music downloads

Commenting on Apple-Softbank iTunes phone Business Week provides data that Japan's music downloads onto mobile handsets outstrip PC downloads at a 20-to-1 proportion. While there is a huge gap between mobile and PC music downloads, overall the mobile music downloads represent a small chunk of Japan's total music market:

Sales of digital music for cell phones accounted for around 5% of Japan's $4 billion music market last year, according to the Recording Industry Association of Japan. "There's a lot more room for growth in digital music downloads for cell phones," says Ichiro Michikoshi of BCN, a tech market research firm in Japan.

Business Week also says that iPod held a 51.9% music player market share in Japan as of April 2006, followed by Sony (15.2%) and Panasonic (7.1%) who also produce music phones. The move into the handset turf by Apple will seriously deteriorate the handset makers' attempts to grab a market share from Apple, while at the same time will provide Apple with the bargaining power to get much-desired contracts with domestic top labels.

On a carrier's side, the Apple-Softbank phone could provide a boost to Softbank-Vodafone's mobile music service, which is far behind the rivals. For example, KDDI au started offering its full song download service in 2004:

As of mid-January, AU had sold 5.9 million music-playing phones to customers who have bought more than 300 million tunes over the carrier's wireless network. Its LISMO and DuoMusic services let subscribers mix their collection of songs downloaded to cell phones and PCs. One of its handsets, made by Toshiba, has a 4-GB hard disk drive that stores 2,000 songs.

3G subscribers come near 46 million in Japan

Japan 3G user base grew to 45.9 million in February, surpassing the number of wireless users with 2G handsets (44.8m). This milestone was achieved because of energetic efforts by three major carriers to switch their 2G subscribers to 3G services.

DoCoMo outshined KDDI au in a second time in a row, adding 828 thousand subscribers to its 3G FOMA service, while KDDI au signed only 309 thousand 3G customers. KDDI au reports 96% or 21.1 million of its customers now being subscribed to 3G service (this includes both CDMA2000 1x and EV-DO services). In contrast, DoCoMo has switched to 3G only 43% (22m) of its customer base. Vodafone added 195 thousand 3G subscribers, ending February with 2.7 million (18%) 3G users.

Japan wireless subscribers: February data

The number of Japan’s wireless subscribers increased by 334,700 in February, driving the total user-base to 90,767,700 active users. KDDI au posted the largest net additions, signing up 275 thousand users. However, these high results were undermined by losses at KDDI’s struggling 2G unit – Tu-ka, which reported almost 115 thousand subscribers leaving the company. NTT DoCoMo signed up 162 thousand new users, while Vodafone lagged behind with twelve thousand of net adds.

Measuring by total number of subscribers, NTT DoCoMo continued its domination with 56% market share, which translates into 50.6 million wireless subscribers. KDDI was in a distant second place with au unit taking 24% (22m) of the market share and Tu-ka unit being down to 3% (2.9m). Vodafone slightly improved its performance, having 17% of the market share with the total customer base, reaching 15.1 million.

Japan's wireless market week wrap-up

Vodafone inks deal to unload Japanese unit
Vodafone Group reportedly has reached a deal to sell a 98% stake in Vodafone K.K. to Softbank. Softbank may pay as much as 2 trillion yen ($17.2 billion) for 98 percent of Vodafone K.K.

Japanese 3G mobile phone users exceed 50 percent
According to the Telecommunications Carriers Association, more than half of Japan's 90.8 million mobile phone users are on high-speed 3G networks.

DoCoMo unveil basic 3G FOMA SIMPURE series
NTT DoCoMo announced that they have developed the 3G FOMA SIMPURE series of basic and compact handsets for people who do not require highly sophisticated functions.

Openwave reports 20m KDDI users
Openwave Systems announced that more than 20 million of EZweb subscribers are using Openwave products and solutions to power KDDI mobile phone services using the WAP2.0 and TCP/HTTP standard protocols.

Japanese carriers prepare for number portability

Japanese carriers want to make sure they did everything to keep customers from fleeing to rivals when the number portability law kicks in November this year. First, they increased the handset subsidies. And now they are improving the floor space of their shops in order to improve shopping experience for customers and put emphasis on their brands.

DoCoMo stated it would open 60 renovated shops with bigger floor space and improved internal design before June 2006. Every shop will require approximately 20-30 million yen ($172,000-$259,000) for a revamp, half paid by DoCoMo and another half covered by the shop operator.

Vodafone in its turn announced the company would average up the number of its specialized kiosks to 2,000 locations to come up to DoCoMo and KDDI au.

Casio’s WCDMA move

With the number of WCDMA users accelerating throughout the globe, Casio decided that it was time to start producing 3G phones compatible with UMTS standard as well.

Having entered the handset business in 2000, Casio initially acquired licenses from Qualcomm to make CDMA One and CDMA2000 1x/EV-DO mobile phones. The company was shipping CDMA handsets to KDDI domestically and to South Korea internationally. However, in February 2006 the company expanded the licensing deal with Qualcomm to cover handsets, supporting the rest of 3G pack -- WCDMA and TD-SCDMA technologies. With this deal, Casio will have an opportunity to target at any 3G operator in the world, not to mention NTT DoCoMo and Vodafone in Japan. The question though is how successful will it be in this endeavor?

Source: Casio press release (Japanese)

Toshiba’s 4GB handset hard drive peeked (pics)

In February, Toshiba introduced the W41T, the first handset with a built-in hard drive. Made for KDDI this CDMA EV-DO handset spots a 0.85-inch hard drive capable of storing 4GB of data. The release of Japan’s first hard drive handset generated a lot of hype, so that IT Media website decided to peek inside the W41T to see how the hard drive is accommodated in the limited environment of a handset. See detailed pictures at IT Media.

GPS helps to pinpoint first sakura blossoms with mobile phones

Owners of KDDI au phones with a built-in GPS feature now can access DuoSnap website to view or to send pictures of first cherry tree blossoms in Japan.

Every year the blooming season of the cherry tree is celebrated in Japan with millions of Japanese going out to view the intensity and beauty of blossoms and to enjoy a picnic, called hanami party in Japanese, under the blooming trees. However, the blooming time differs from year to year depending on the weather. And usually the mass media covers the first blossoms of cherry tree throughout the country as the blooming starts in the southern parts of Japan and spreads further to the north. But now, cellphone users can be the first to notify their compatriots about the beginning of sakura blooming. All they need to do is to snap a picture of the local blossoms and email it along with comments and embedded GPS data to DuoSnap website. Later, people can access the website from a cellphone or PC and check the areas where the blooming has actually started by viewing the sakura photos uploaded by other users.

KDDI posts 300m downloads of polyphonic ringtones

In January 23, KDDI reached another milestone in ringtone downloads. The company announced 300 million downloads of Chaku Uta, a Japanese name for polyphonic ringtones.

Having started the Chaku Uta distribution in December 2002, KDDI saw the service gaining in popularity. It seems that the recent trend of full song downloads onto mobile phones did not impact the downloads of polyphonic ringtones in Japan. It took the company only nine months to go from 200 million Chaku Uta downloads in Aprill 2005 to 300 million in January 2006.

KDDI au brand also provides Chaku Uta Full, a full song download service for cellphones, from November 2004. The service proved to be popular among KDDI customers, claiming 2 million downloads in just two months after the rollout.

KDDI to introduce mobile e-flyer

KDDI announced a new mobile marketing service, targeting small businesses. Dubbed as Mobile Electronic Flyer Service, the new initiative offers small business owners to target their registered customers with electronic flyers sent onto their mobile phones.

It should be mentioned that flyers are popular way of marketing in Japan. You can see marketing people distributing flyers, often written by hand, on every corner of any crowded street in big Japanese cities.

The major difference from e-mail is that the e-flyer can be handwritten, including custom drawings and maps. KDDI bets that the novelty effect will gather customers’ attention to this new service.

Small business owners need to send a Fax to KDDI that will notify users by e-mail about the new flyer available for download. The users may click on the enclosed in the e-mail link to see the actual flyer stored on KDDI’s server (they need to set up a special free-of-charge software on their handsets to use the service first).

The service trial will be conducted from mid August to the end of November 2005.
Source: KDDI

KDDI brings Iridium back after a five-year break

Starting 1st of June, KDDI Network & Solutions revived the satellite phone service Iridium in Japan after a five-year break.

Iridium service uses satellites to cover the entire Earth to provide connectivity and is extremely useful in the remote parts of the globe where traditional telephone or cellular networks do not exist.

The service was stopped in 2000 due to the slow uptake in subscriber numbers, but the demand is on a rise again, taking into account the high fault tolerance and reliability of the service during the natural disasters, when the only connectivity option left is a satellite phone.

KDDI sells Iridium handset at JPY241,500 ($2,236), with monthly service plan costing JPY6,000 ($55). Communication charges for Iridium-to-Iridium calls are JPY105 ($0.97) per minute, while calls to PSTN or cell phones are charged at JPY165 ($1.52) per minute.

Source: KDDI Network & Solutions

KDDI Announces EZ 'Chaku Uta Full' Downloads Exceed 5 Million

Another breaking point for KDDI au brand, EZ Chaku Uta Full downloads surpassed 5 million on April 3, 2005.

For those who don't know, EZ "Chaku Uta Full" is a music download service through which an entire song can be downloaded directly onto a mobile handset.

KDDI's 3G subscriber base reaches 18 million users

According to KDDI, the total number of subscribers for 3rd generation cellular phones provided by KDDI and Okinawa Cellular exceeded 18 million on April 6, 2005.

Sales record through breaking the 18-million subscriber level

April 1, 2002       Start of 3G service
June 23, 2002       Over 1 million subscribers
Jan. 16, 2003       Over 5 million subscribers
Sept. 16, 2003      Over 10 million subscribers
July 20, 2004       Over 15 million subscribers
April 6, 2005       Over 18 million subscribers

Tu-ka S: that's what they call a cell phone!

Released in November 2004, Tu-Ka S cell phone impresses you with its extreme simplicity. By the way, S in its name stands for simplified, while Tu-Ka is a name of wireless carrier, a unit of KDDI group that targets non-3G users and runs on 2G PDC network.

This phone does not have any screen, address book or any other features we got used to have on modern cell phone. The only feature it has is voice communication. That's it.

Of course, there is a reason why Kyocera came up with such device. It aims senior citizens that prefer devices with simple interface and easy-to-see buttons. Believe it or not, the phone proved to be popular enough to help Tu-Ka to stop the tendency of customers fleeing from the carrier. Actually, Tu-Ka even managed to do some new net additions in recent months.

Tu-Ka S specifications:

• Weight - 87g
• Talk time - 240 minutes
• Stand-by time - 840 hours

KDDI au's Chaku-uta Full downloads reach 2 million

Having deployed Chaku-uta Full service in November 2004, KDDI au announced the service experienced success with total 2 million downloads by February 5th, 2005.

Chaku-uta Full service allows users to download MP3 full-length songs onto their handsets, using KDDI's high-speed CDMA EV-DO network. The service offers about 13 thousand records for download with the price ranging from JPY200 to JPY300 per song.

Chaku-uta, a 30-second song snippet and a predecessor of Chaku-uta Full, witnessed 1.6 billion downloads by the end of 2004.

Japan's KDDI au hits 19 million subscribers in February 2005

On February 13, 2005, KDDI au, the second largest Japan's wireless carrier, announced the record 19 million-subscriber base. CDMA standard-backer KDDI au competes in 3G arena with NTT DoCoMo and Vodafone that opted for UMTS standard instead.

The company was successful in shifting its subscriber base from 2G to 3G handsets, reaching 90% 3G penetration or 17 million 3G subscribers among its customer base. KDDI au was outperforming its main rival DoCoMo in 3G subscriptions 2 years in a row.

While DoCoMo managed to secure only 9.3 million 3G subscribers so far, it has plenty of room to expand, taking into account its vast 2G subscriber base of 38.7 million subscribers that will likely to shift to the company's 3G base. However, KDDI au may use its appeal such as diversified value added services, attractive handsets, and affordable rates to lure customers from DoCoMo.

Considering Japan's mobile penetration climbing to 70% soon, stealing customers from each other will be the only domestic market strategy left for Japan's mobile operators in near future.

As of January 2005, out of total 127 million Japanese 85.8 million owned a cell phone.