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Mobile Internet in Japan(i-mode, Ezweb, J-sky)

2003.3K.Tomisawa 　　 Professor

Faculty of Management Dohto University

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Contents

• Using mobile internet has become a daily scene in Japan

• Mobile internet has two characters: interactive media & mass media

• Will the vertical-integrated business model developed by mobile communication carriers be open?

3

Using mobile internet is a daily scene in Japan

• Mobile Internet has promoted the Internet use in Japan.– Internet users: 69million(2002.12)– Percentage of users population : 54.4%

• PC users:57million• Cellular phone users:27million• Mobile internet users:60million

4

Internet Users 2002 （ For reference ）

13.98

16.84

16.97

19.25

26.27

32.10

34.30

59.10

69.42

165.75

0.00 50.00 100.00 150.00 200.00

Brazil

Canad a

France

Italy

Korea

Germany

U.K.

China

J apan

U.S.

million

(Source) MPHPT

5

Internet Users (Japan)

(Source) MPHPT

11.616.9

27.169.4

55.947.1

37.1

44.0

54.5

21.413.4

9.20

20

40

60

80

100

120

1997 1998 1999 2000 2001 2002

(000

)

0

10

20

30

40

50

60

(%)

Intenet Users

percentage of users

6

Game machine,TV User3.6 million（ 5.2 ％）

PC User57 million（ 82.4 ％）

Cellular phone, PHS, PDA User28 million（ 40.2 ％）

The number of internet users of each device

Total 2002.12:69 million

Cellular phone, PHS, PDA only 11 million

PC only39 million

【 16 million 】

【 0.8 million 】

【 0.2 million 】Game machine,ＴＶ only1.4milliom

【 1.3 million 】

(Source) MPHPT

Mobile internet users 2002.12 60million

7

0

10000

20000

30000

40000

50000

60000

70000

80000

1988

.3

1989

.3

1990

.3

1991

.3

1992

.3

1993

.3

1994

.3

1995

.3

1996

.3

1997

.3

1998

.3

1999

.3

2000

.3

2001

.3

2002

.3

2003

.1

(000

)

Cellular phoneMobile internet

2003.1 　　　　　　　　 (000)Cellular phone users ： 73,900Mobile internet users ： 60,235(81.5%)

Cellular Phone & Mobile Internet Users (Japan)

(Source) TCA

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Mobile Internet Users / Cellular Phone Users (2001.12)

(Source) Baskerville Telecom Group

72.3

59.1

16.5

13.8

9.4

7.9

7.9

7.0

6.9

6.6

5.0

0 20 40 60 80

J apan

Korea

Finland

Canada

Singapore

U.S.

Germany

Italy

U.K.

Taiwan

France

（％）

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a phone placed over an ear → 　 a phone placed in front of a face.

We use a cellular phone in order to phone, too.

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Factors of i-mode success

• Careful in selecting contents(Official contents) → NTT Docomo collects the charge of official contents t

ogether with its telephone charges. →NTT Docomo manages the portal site where official c

ontents are linked.

• “What can be done.” is the only PR.– Difficult things, such as an "Internet connectivity", are not sa

id.

• Packet switching service always connected≒• New functional devices at a low price

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Cellular Phone Users (Company Share)

Mobile Internet Users (Service Share)

61%19%

20%

i-mode

EZweb

J -sky

58%18%

24%

Docomo

KDDI

Vodafone (2003.1)

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• User’s literacy has progressed• E-mail → picture-mail → movie-mail• Web （ weather news, transfer information, etc.)• Download （ game, ringtone melody, picture,etc.)

• Coupon, prize• Web(shopping, auction, reservation, banking ）→ payment, certifica

tion• Web （ link the DB of the company ）

• Multicolor, polyphonic ringtone, java, GPS, camera, infrared rays

• Speed up

The highly functional devices have been introduced into the market timed with the progress of user's literacy.

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Media-mix

Shopping, reservation

Download

Web (gather information)

Mail　　 multicolor 　 Java 　 GPS 　 camera 　 infrared ray

highly functional devices, easy to use

Progress of user's literacy

Expansion of business use

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02000400060008000

10000120001400016000

2001

.01 03 05 07 09 11

2002

.01 03 05 07 09 11

2003

.01.

14

(000

)

Vodafone total

Camera-equipped

8million59.9%

Camera-equipped cellular phone has become popular

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Diversification of Mobile Business

• Pay contents (ringtone melody, picture, game,etc.)• Mobile commerce

– Completed type– Store-guided type

• Mobile advertisement （ banner, mail, coupon)• Solution business （ support companies’ usage of mob

ile internet ）– A new strategy of content providers– System integrators prepare menus including mobile internet

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Mobile infra business

Mobile use businessMobile business

Telecommunication carriers, machine makers, software providers

Airline industry, financial industry, transportation industry, retail industry, public field, etc.

Mobile advertisements, mobile commerce, mobile contents, mobile solutions

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Interactive mass-media

• Media features– Mass-media:60million users

– Portable: carry-on for 24 hours

– Personal: connected with a specific person

– Interactive

– Real time:always connected, immediate reaction

× Unfitted for hierarchical information retrieval

× Difficult to input a long URL

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Interactive

One way

Mass media

Personal media

　　 Mobile internetPhone

Letter TV

19

0

20

40

60

80

100

5:0

0朝

8:0

0～

8:0

010:0

0～

10:0

012:0

0～

12:0

0昼

13:0

0～

13:0

015:0

0～

15:0

017:0

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19:0

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21:0

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21:0

023:0

0～

23:0

0 1

:00

～

1:0

0深

夜 5

:00

～

％

平日休日

Time zone in which a cellular phone or PHS is within a meter away

(Source)Video Research

weekdays

weekends/holidays

morning midnight

20

0

20

40

60

80

100

120

140

160

180

0:0

0

1:0

0

2:0

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3:0

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9:0

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10:

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11:

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18:

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20:

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21:

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22:

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23:

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時 間

アク

セス

指数

（注 ）ア クセ ス 指 数 ＝ そ の 時 間 帯 の ア クセ ス 数 /一 日 の 時 間 当 り平 均 ア クセ ス 数

0

20

40

60

80

100

120

140

160

180

0:0

0

1:0

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2:0

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時 間

アク

セス

指数

（注 ）ア クセ ス 指 数 ＝ そ の 時 間 帯 の ア クセ ス 数 /一 日 の 時 間 当 り平 均 ア クセ ス 数

ガ リ バ ー ・ イ ン タ ー ナ シ ョ ナ ル の モ バ イ ル イ ン タ ー ネ ッ ト サ イ ト へ の 一 日 の ア ク セ ス 状 況

Access index

Access index =No. of access in the time period/ No. of average access per hour

Daily access situation of the used car site

hour

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Privacy

Screen

Operating

Portable

Starting

Input

Initial setting

Phone

Mobile internet

hard to be seen

poor

easy

always at hand

can use immediately

immediately

difficult

phone function

PC internet

easy to be seen

rich

difficult

at office or home

setup is troublesome

take time

easy

no phone function

Comparison with the mobile internet and PC internet

○

○

○

○

×

×

○

○

×

×

×

×

○

○

×

×

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Progress of Media-mix

• 「 mass-media 」＋「 mobile internet 」＝「 Informs widely 」＋「 interactive 」

– Mobile commerce （ linkage with magazines ）• ちびギャザ (mail order)

– Mobile campaign （ linkage with packages ）• ネットでファイヤー (canned coffee)

– Mobile cashing （ linkage with TVCM ）• アコム (loan)

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The lens effect :Mobile internet selects useful information for individual among miscellaneous information and converts to action.

　　　

Mass m

edia

select

Action

　 diffusion

Mobile

internet

convert

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Applying mobile characteristics in the business field

• Approach to the consumer market– Sales channel, sales promotion, product planning

• Computerization of those who work under the mobile environment– Sales person, driver, etc. （ to raise operating

efficiency ratio ）• Gather information about distant places and

things

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Distinctness of the cellular-phone industry of Japan

• The vertical-integrated business model developed by mobile communication carriers

• MPHPT carved every layer of the model– Opening of a portal site to non-official content providers– Opening of network to ISP– Improvement of MVNO environments– The portability of the telephone number is a left-behind subj

ect.

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Business process

Contents & Applicationlayer

PlatformLayer

(charges, certifies, manages the portal site, etc.)

NetworkLayer

(telecommunication service operator)

Devicelayer

The vertical-integrated business model developed by mobile communication carriers

The portal site was opened.

Carriers collect the charge of non-official contents.

The network was opened to ISP.

Portability of a telephone number is unsolved.

The environment for MVNO was improved.

Makes the rule of each interface= makes a module of each composition element

MPHPT

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　 Classification of product architecture

carIBM360

Lego

PC

Degree of interdependence of a part design

Co

ope

ratio

n b

eyo

nd

the co

mpa

ny

integral modular

closeopen

（ Source ） T.Fujimoto, A.Takeishi, Y.Aoshima “Business Architecture” 2001 Yuhikaku, etc.

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Will business use be expanded?

• obstacles– security– prejudice– the vertical integration model

• factors of promotion– development of solution business

• MVNO, SI

– development of 3G

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Mobile Phone Users (System Share) 2003.1

Docomo59%

KDDI5%

Vodafone18%

KDDI11%

KDDI7%

Docomo0%

Vodafone0%

W-CDMA

cdmaOne

cdma20001x

PDC

30

2G & 3G(000)

0

1000

2000

3000

4000

5000

6000

70002

00

1

02

03

04

05

06

07

08

09

10

11

12

.20

02

02

03

04

05

06

07

08

09

10

11

12

20

03 52000

54000

56000

58000

60000

62000

64000

66000

68000

70000

72000

G２

W-CDMA

cdma20001x

160

5,313

68,427