Japan: PC vs. cellphone shipments

IDC Japan has recently released the number of PCs shipped in Japan in 2005. Surprisingly, the number increased by 9.1% YoY, totaling 14.61 million units. The research company explains the recovered demand (mostly in home PC market) by two factors:

• Interest in Olympic Games 2004
• Increased shipments by major PC vendors, which started selling “spring models” in December instead of January

Nevertheless, the PC shipments still lag behind cellphone shipments, which accounted for 45 million devices in 2005, according to Gartner. Moreover, “although the home PC demand was a driver in 2005, there is a gap between shrinking home PC and expanding business PC markets. Despite the declining growth, business PCs will remain strong with over 60% of Japan PC market," said Kumi Shingyouchi, senior market analyst of IDC Japan's Personal Computing and Digital Imaging. This means, that cellphones continue to be the main devices from which Japanese users access Internet.

Japan's wireless market week wrap-up

DoCoMo buys two carriers in Guam
NTT DoCoMo is buying Guam Wireless Telephone Co. and Guam Cellular & Paging for $71.8 million. DoCoMo plans to merge the two carriers and invest in network upgrades.

In other DoCoMo news, the Japanese operator launched two new FOMA handsets on Friday that operate on the Symbian OS. The FOMA D702i and the FOMA NM850iG bring the total number of Symbian OS model handsets being offered in Japan to 26.

Japan's mobile operators see kids as new market
Mobile operators in Japan have created a new category of phones for grade-school children, equipped with a range of anti-crime safety features, educational content and censored mobile Internet access. NTT DoCoMo estimates that only about 10% to 20% of grade school children currently own phones. Mobile phone usage among children in terms of communication costs has been increasing steadily every year to about a 32 billion yen ($275 million) market in 2005, according to data compiled by Yano Research Institute.

NTT DoCoMo invests in convenience store chain
NTT DoCoMo, Japan's largest wireless carrier, said it will buy a 2% stake in the nation's No. 2 convenience store chain, Lawson Inc., for $76.9 million. The move is aimed at expanding a DoCoMo service that allows subscribers to pay for goods with their mobile phones.

Yahoo! to emerge as a mobile content provider in Japan
Yahoo! co-founder Jerry Yang said he believes Softbank's deal to buy Vodafone Group's Japan business could be an opportunity for the U.S. Internet company. Softbank is the largest shareholder in Yahoo Japan Corp., and Yang said the Vodafone K.K. deal represents a chance for Yahoo to expand its mobile phone offerings.

Mobile iD readers to be installed into 5,500 of Tokyo’s taxi cabs

Having launched iD credit payment service in December 2005, NTT DoCoMo is expanding the service to Tokyo’s taxi cabs. Together with partners from Mitsui-Sumitomo bank and Tokyo Wireless Cab Association (TWCA), DoCoMo will provide iD reader/writer devices to around 5,500 taxi cabs in Tokyo area, members of the TWCA.

iD is an enhancement to DoCoMo’s mobile-wallet cellphones, adding the ability to make credit card purchases. Before, DoCoMo’s mobile-wallet users had to deposit money into their mobile-wallet accounts in advance to conduct micro-payment transactions such as paying transit fare or buying a soft drink from a vending machine.

Tokyo is not the only place where taxi cab drivers accept payments made by cellphones. A cab company from Kanagawa prefecture uses QUICKPay, another mobile credit card service from JCB bank. Several cab companies across the country also accept pre-paid electronic money payments via mobile-wallet cellphones, utilizing Edy or Mobile Ii Card services.

Source: ITmedia (Japanese)

Japan's wireless market week wrap-up

Japan's eMobile picks Ericsson for 3G network build-up
eMobile, a new entrant to the Japanese 3G market, has selected Ericsson as the prime supplier of its new WCDMA/HSDPA network.

DoCoMo rival calls for wireless giant's breakup
Sachio Senmoto, CEO of Japan's eMobile, said NTT DoCoMo should be broken up to make the country's wireless market more competitive.

Carlyle prepares for Willcom IPO
The Carlyle Group, which owns 60% of Willcom, Japan's largest operator of PHS (personal handyphone system) services, reportedly is planning an IPO for Willcom. Willcom added 64,900 subscribers in February for a total of 3.8 million -- an increase of 25 percent since March last year when it introduced the flat-rate voice plan.

Equity companies want to outbid Softbank to get Vodafone
Cerberus Partners and Providence Equity Partners Inc. reportedly are putting together a $15 billion offer to buy Vodafone K.K. Japanese Internet provider Softbank already is in talks with Vodafone Group about buying K.K.

Vodafone finally sells Japanese operations to Softbank for $15.4bn
Vodafone Group plc confirmed that it will sell its struggling Japanese operation to Japanese Internet conglomerate Softbank in a deal valued at about $15.4 billion.

Email tops the list of most popular handset apps in Japan

According to the survey conducted by marketing company iSHARE, Japanese consumers pay attention to the handset’s design (26.3%) first, when choosing a new model. Next come handset’s price (24.3%) and functionality (20.1%).

When asked what handset features they used most, the respondents stated email (45.2%), followed by camera (24.2%) and mobile application usage (10.9%). The high rank of cameras can be explained by the widespread use of QR-codes that need to be scanned by cameras. It is interesting that mobile wallet and Web surfing are missing from the popularity list. Despite the video calling was introduced a while ago in Japan, its adoption remains low. Even radio usage beats video calling, according to iSHARE.

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.

Wireless penetration in Japan surpasses 100% in the 15-64 age bracket

According to the Statistics Bureau of Japan, the population of the country stood at 127,740,000 at the beginning of February 2006. If we break down that number by age brackets, we shall learn that there are 84,330,000 people in the age group between 15 and 64 year olds. According to TCA, the total number of Japanese wireless subscribers in February was 90,767,700, which is much more of the number of population in the 15-64 age bracket.

Of course, there are still people in that age group who do not own a cellphone, while others have two or more cellphones, keeping separate accounts for personal and/or business use. What this data shows is that Japan’s market growth will depend on the replacement sales and further penetration into the youngest and oldest age groups. Tough times await the numerous domestic handset makers and wireless operators.

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.

Casio Hitachi to make inroads into US market

Credit: PhoneScoop.com

First news about Casio’s intentions to enter the US market appeared in November last year. It turns out that it was true. According to Phonescoop.com, the FCC approved the G’zOne handset model, with Verizon Wireless brand mentioned in the FCC documentation. The G’zOne is a ruggedized, water-resistant handset, first shipped to KDDI in May 2005. After more than warm reception of the G’zOne by Japanese users, the company brought it to Korea in December last year and enjoyed high-level sales. Riding on success of their G'zOne, Casio Hitachi worked with Verizon to optimize the handset for the use on Verizon’s high-speed 3G EV-DO network. It can take a couple of months before the handset hits Verizon store shelves.

Casio and Hitachi joined their forces in 2004 and they are relatively small handset vendors, being outside of top-five domestic handset manufacturers. Merging was their only option to sustain and it looks like they are doing fine by expanding their presence beyond Japan.

G-Guide Mobile service signs up 5m users

NTT DoCoMo reported 5 million subscribers to its free interactive TV program guide service called G-Guide Mobile. G-Guide Mobile is a Java application loaded onto the majority of DoCoMo's phones. The guide provides airing schedule of all major Japanese TV channels and serves as a remote control for TVs on some models. Additionally, users of cellphones with analog or digital TV tuners built-in are capable to start watching a program they highlight in the TV guide by pressing a soft key. Rolled out in December 2004, the application supports 52 DoCoMo's handset models.

No need for keys when you have a FeliCa mobile phone

The concept of mobile wallet is live and working in Japan: you can do fine without cash, ID cards and keys as long as you carry around your FeliCa-enabled mobile phone. Here is an example of what can users do with the contactless key service developed by Kesaka System for apartment buildings:

• Open and lock doors by waving the handset
• Share the master key with others by sending email to another phone
• Edit and set the expiration date on the master key
• Get notified by email when the door is open (when your kid gets home for example)
• See which phone was used to open/lock the door
• Check the status of the door lock remotely
• Lock the door remotely if you forget to lock it in a first place
• Get notifications from landlord on your cellphone
• Control home appliances remotely from a cellphone (to turn on/off lights, air conditioner, camera, etc.)
• Get notification if you get any package delivered into your mailbox

Source: Kesaka System website

Japan's wireless market week wrap-up

Vodafone Japan intros first 3G handset with VGA display
In a spotlight is the launch of Vodafone 904SH by Sharp, the first mobile handset to feature a VGA (Video Graphics Array) liquid crystal display. Besides, the handset supports Bluetooth communication, applications for newly-developedMotion Control Sensor, and Vodafone K.K.’s first Face Recognition application.

Mitsubishi to scale back mobile phone business in China
Mitsubishi joins Panasonic and Toshiba among the big-name companies that have withdrawn from the booming Chinese wireless market.

Vodafone K.K. upbeat on prospects
Vodafone K.K. President Bill Morrow said parent company Vodafone Group's announcement of an impairment charge totaling at least $40 billion would not affect the Japanese unit. Although Vodafone KK has struggled, Morrow said things are improving, both in terms of subscriber churn and 3G subscriber growth.

Vodafone to sell its Japan unit to Vodafone?
Despite Vodafone K.K. president Bill Morrow's early comments that Vodafone's Japanese operations would not affected by the impairment charge, Vodafone confirmed it was in talks to sell a controlling stake in its Japanese subsidiary, Vodafone KK, to Japanese Internet firm Softbank.

Gartner: 45 million handsets shipped in Japan in 2005

According to Gartner, Japanese carriers sold 11.7 million handsets in 4Q 2005, while the year 2005 total handset shipments reached 45 million terminals. The demand for music playback feature by youngsters drove the handset replacement purchases.

Among the top Japanese handset makers mentioned by Gartner were Sony Ericsson (5th place), Panasonic (8), NEC (9) and Sanyo (10). Apart from Sony Ericsson, a joint venture between Sony and Swedish Ericsson, Japan’s domestic makers did not expand their market shares, failing to address the market needs or finding niche markets. The fragmentation of the domestic market also did not help improve the situation, because standalone Japanese makers lack the economies of scale to compete with the world leaders.

Source: Gartner press release (pdf, Japanese)

Mobile music downloads brought $278.5m in sales in 2005

According to the latest report from the Recording Industry Association of Japan (RIAJ), mobile downloads dominated Japan’s market of digital music distribution in 2005, claiming 258 millions or 96.4% of total music downloads. The Internet held the mere 3.5% of the market share, recording only 9.5 million downloads.

Music downloads via Internet generated 1,850,620,000 yen ($15.9m) in terms of revenue, while mobile downloads accounted for 32,339,996,000 yen ($278.5m).

The data from RIAJ highlights the known trend that Japanese consumers prefer connecting to the Web from cellphones rather than using PCs.

RIAJ based its report on the data collected from its 41 member and it did not break down single and album downloads, thus the actual number of downloaded songs may be higher than reported. Also, ringtones were included into the total number of downloads and generated revenue.

Source: RIAJ press release (Japanese)