eurotechnology.japan.blog

Seminar in London: "M&A in Japan" (Friday 18 April 2008, 12:30-14:30)

fasol — Sun, 13 Apr 2008 18:44:00 +0000

Seminar Description:
Two practitioners from Tokyo will debate the changes in Japanese attitudes to mergers and acquisitions. During the course of this seminar, we will cover M&As between Japanese companies, the slow impact of foreign investment into Japan, and the outward investment strategies of Japanese companies.

Speakers:
Dr Gerhard Fasol, President, Eurotechnology Japan KK
David Syrad, Managing Director/Managing Director Asia, A.K.I. Japan Limited

Time and Date: Friday April 18, 2008, Sandwiches: 12:30, Seminar: 13:00-14:30
Location: Daiwa Foundation Japan House, 13/14 Cornwall Terrace, London, NW1 4QP
Price: free of charge
To register: biz @ aptn.org
Organizer contact: Louis Turner Tel. +44 - 790 5204 677
More information: www.aptn.org

Market caps of companies in mobile: global vs local

fasol — Tue, 20 Nov 2007 14:40:00 +0000

Google, Apple, Nokia, HTC, Vodafone and are winning the driver's seat of the global internet revolution. DoCoMo, KDDI and SoftBank essentially stay inside Japan for now - limiting their growth prospects and leaving global opportunities to others.

GOOGLE with Android and APPLE with iPhone are reaching for the driver's seat of the global mobile data revolution. Global companies including GOOGLE, Vodafone, Apple and NOKIA grow to US$ 100s Billion valuations, while local companies NTT, DoCoMo, KDDI and SoftBank remain essentially limited to Japan's market for now. Smartphone maker HTC increases impact - including in Japan.

SoftBank and KDDI win market share

fasol — Tue, 20 Nov 2007 14:32:00 +0000

SoftBank from 4th to 1st position within less than 12 months... SoftBank's turn-round of x-Vodafone-Japan, went faster than many expected. Within less than 12 months SoftBank went from last place to first place in customer sign-ups, overtaking even KDDI's super-popular AU. Willcom recently suffers from SoftBank's revival, as well as from eMobile's flat rate data services.

First half FY2008 results: SoftBank and KDDI profits increase, DoCoMo's trends is downward

fasol — Tue, 20 Nov 2007 14:12:00 +0000

In the last few days NTT, NTT-DoCoMo, KDDI and SoftBank announced their first half financial results. SoftBank and KDDI are the winners both for market share and for profits, while DoCoMo's results and market shares are sinking, and pulling the NTT-Group down at this time. Extrapolation indicates that DoCoMo's net profits may fall into the red about one year from now, drastic action is taken soon.

The thin lines show linear interpolations of quarterly net profit data. Our extrapolation seems to indicate that DoCoMo's net profit might fall into the red towards then end of calender year 2008 unless drastic action is taken. If current trends continue, SoftBank's net profits might exceed DoCoMo's mid-2008. We expect DoCoMo to take dramatic action before this happens.

SuiPo - linking posters to mobile phones and IC cards

fasol — Wed, 06 Jun 2007 04:39:00 +0000

JR-East introduced SuiPo (Suica Poster).

People who want to participate need to register and link their plastic SUICA card, or their mobile SUICA (wallet phone with installed SUICA application) with a registered mobile or PC email address.

Whenever a registered participants touches the SUICA reader/writer on the side of a poster, links to a campaign homepage, coupons, event announcements or other information is sent to the registered PC or mobile phone email address.

The SuiPo system puts interactivity into posters and allows the advertiser to build an opt-in data base of interested people and to interact with them.

More about SUICA: [Download our SUICA report]

Nanaco - e-cash and m-cash for Seven-Eleven

fasol — Sun, 22 Apr 2007 15:59:00 +0000

This week two of Japan's largest retail chains roll out electronic and mobile cash: Monday April 23rd the Seven & I Holdings Group started "nanaco" and tomorrow, Friday April 27th, 2007, the AEON retail group will start "WAON".

At first sight the massive roll-out of electronic cash and mobile payments systems during March and April this year here in Japan has been smooth and without problems (except for PASMO underestimating the success and running out of cards). However, when we look below the surface, clouds of a competitive storm are brewing. This storm might be followed by consolidation. Here are some examples:

PASMO cards were sold out within the first three weeks, and PASMO is now losing market share (and commission payments) to SUICA day-by-day - PASMO became a victim of it's own success.

7-11's "nanaco" offers twice as much discount as AEON Group's "WAON". Clearly "nanaco" is on a more aggressive course than "WAON". We expect competition to heat up.

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eMobile - mobile disruption in Japan

fasol — Mon, 19 Mar 2007 06:52:00 +0000

On March 31, 2007 eMobile will start high-speed (3.6 Mbps, HSDPA) mobile data services in Tokyo, Osaka and Nagoya, bringing disruption into the mobile data market in Japan.

While Willcom offers a flat data rate of YEN 9000 (US$ 77) per month for unlimited data transmission at 128kbps, eMobile will offer 30 times higher speed at about 1/2 the price:

3.6Mbps for PDAs, laptops and PCs for YEN 4980 (US$ 43, EURO 32) per month flat rate without any data limit (and n.b. no "fair use limit" as many European operators impose in the fine-print). .... and yes- you can probably also do wireless VOIP or Skype if you set this up yourself.

The established mobile operators (DoCoMo, KDDI/AU and SoftBank) do not offer any flat data rate to connecting PCs and laptops.

eMobile offers the EM-ONE terminal:
- data download at 3.6 Mbps (wCDMA-HSDPA)
- wLAN (IEEE 802.11b/g)
- Windows mobile 5.0
- digital mobile TV
- 4.1inch VGA (800 x 480) LCD display by SHARP
- camera (with QR-Code reader etc)

(By the way- did you ever wonder why new entrants love flat rates? it's because telecom billing systems are so expensive and complex. Flat rates are one of many competitive weapons new entrants have over incumbents...)

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PASMO: IC cards for transport

fasol — Sat, 17 Mar 2007 16:08:00 +0000

On Sunday, March 18, 2007, about 100 transportation companies in the Tokyo region switched to the near-field electronic money and payment system PASMO. Electronic money is a new battle field which JR-East pioneered with SUICA. 7 & I is still to throw it's weight into the battle - read about today's status of the electronic money marketplace in our "Mobile Payment and Keitai Credit" report.

A new multi-billion dollar power? Here is the character for PASMO: with an antenna on the hat, a pocket on the chest to store PASMO away, and wheels on the shoes, and in cherry-blossom pink... Does this cherry-blossom-pink guy look like he represents a new US$ multi-billion economic power?

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Mobile payment and the future of money

fasol — Mon, 05 Mar 2007 18:00:00 +0000

CLSA - Asia-Pacific Markets - last week organized the "CLSA Japan Forum" here in Tokyo. About 800-1000 investment bankers, portfolio managers, investors, analysts came together. Since last year interest of global investors in Japan has increased a lot.

Eurotechnology Japan KK participated actively, and on Friday March 2, 2007, gave a presentation on:

"Impact of mobile payment and the future of money"

The presentation covers the following agenda:
- Can e-money and mobile payment replace cash?
- Example: mobile payment for the world's busiest train line
- DoCoMo's target for mobile payments
- Japan's mobile payment and keitai credit landscape
- Free markets vs regulation
- Mifare and Felica chips and radio communications (NFC)
- Who drives mobile payments
- Growth of SUICA
- DoCoMo's mobile payment and keitai credit strategy
- Edy - electronic cash
- A major bank's mobile payment system
- Impact
- Where to invest - who to watch
- Summary

"Impact of mobile payment and the future of money" (download here)

"Mobile payment and keitai credit (download here)

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Chinese global brand - LENOVO

fasol — Sat, 03 Feb 2007 16:19:00 +0000

On February 1, 2007, LENOVO announced excellent 3rd Quarter results. I commented live on CNBC-TV.

Read comments on LENOVO's results below,
watch the video on CNBC's site,
watch the video on video.google.com.

Comments on LENOVO's 3Q results

LENOVO (traded on the the Hong Kong stock exchange) for 3Q announced 23% higher profits compared to 3Q one year ago. Revenue increased slightly to US$ 4 billion, making LENOVO a US$ 12 billion/year company. LENOVO is very successful in it's home market China, where it controls more than 35% of the PC market. While shipments in China rose 17% during the quarter ending Dec 31, 2007, global sales only increased 0.4%, held back mainly by performance problems and falling sales in the Americas. Globally, LENOVO is squeezed between ACER below, which grows much more rapidly (ACER's growth was 32.4% in 3Q2006 compared to one year ago while LENOVO's growth was only 10.1%) and Hewlett-Packard and Dell above. While Dell was struggling recently, Michael Dell came back as CEO of Dell, and I expect Dell to improve and become a much more difficult competitor for LENOVO. LENOVO's challenge is to turn around the US operations, where it is losing ground. To do so, LENOVO will need to strengthen sales to consumer markets, maybe by learning attractive product design by watching APPLE, since competing on price will further hit profits. LENOVO risks to be overtaken globally by ACER.

Comments on LENOVO

LENOVO is more important than it's size of US$ 12 billion in sales suggests for the following reasons. LENOVO is one of the first Chinese companies developing a global brand and a global business. With China's growing economic importance on the world stage, if LENOVO manages to turn-round US operations and becomes globally successful, it's management structure and methods may become a model for other Chinese companies to globalize. It is interesting to compare LENOVO's relative success after the acquisition of IBM's PC business with BENQ's acquisition of SIEMENS-Mobile phones. If LENOVO succeeds to turn-round US operations, LENOVO may become a model case for futher take-overs of Western companies by Chinese companies. LENOVO is owned 27.3% by the Chinese Academy of Science. If LENOVO succeeds and continues to expand it's success story, financial benefits will flow back to the Chinese Academy of Science, strengthening China's science base and contributing to China's further development. LENOVO is also China's largest domestic mobile phone maker, after recently overtaking Ningbo-Bird. LENOVO sold 2.1 million mobile phone handsets in 3Q2006, a market share of 6.2%, and annual sales on the order of 8 million phones. This number is far below NOKIA's sales on the order of 350 million phones/year globally, and recently global phone makers have been gaining ground over local makers in China. However, LENOVO does have a chance sometime in the future to become a global mobile phone player in the way SAMSUNG has succeeded.

Mickey mouse & Disneychannel use QR-Codes

fasol — Mon, 29 Jan 2007 08:31:00 +0000

Disneychannel places advertisements with huge QR-code on Tokyo's roofs. People passing by point their mobile phones at Mickey's QR-code, and the mobile phone takes them to Disneychannel's mobile site.

QR codes were developed in the 1990s to manage car parts - today they are by far the best way to link mobile phones to almost anything. In many applications QR codes are cheaper, easier, more flexible and more secure than RFID and NFC.

If you need more information about qr-codes and their business applications, download our report here (pdf-file) or contact us.

European Central Bank (ECB) uses QR-codes

fasol — Mon, 29 Jan 2007 08:23:00 +0000

QR codes were developed in the 1990s to manage car parts - today they are by far the best way to link mobile phones to almost anything. In many applications QR codes are cheaper, easier, more flexible and more secure than RFID and NFC.

The European Central Bank (based in Frankfurt) manages the EURO, is one of the world's most important central banks, and uses QR-codes to link traditional PC-webpages to mobile pages.

If you need more information about qr-codes and their business applications, download our report here (pdf-file) or contact us.

Mobile subscriptions grow by 5 million in Japan during 2006

fasol — Sun, 28 Jan 2007 07:42:00 +0000

Japan's mobile subscriber numbers grew by about 5 million in 2006. Because of the much higher ARPU, Japan's mobile market again grew by a couple of Finlands during 2006. A growing number of people have more than one mobile phone, to take advantage of the best rates, eg for mail, voice and data. We expect growth to continue. Our analysis below shows that KDDI's and AU's gains are a lot larger than a superficial view of the statistics reveals - see our Figure below. Find a detailed review in the latest edition of our JCOMM-Report.

KDDI's subscriber gains during 2006 are much bigger than a superficial analysis reveals (see figure above):

KDDI's AU mobile service gained about 4.2 million new subscribers during 2006 - more than twice as many than DoCoMo's cellular service, which gained about 1.8 million new subscriptions.

Currently, KDDI is shutting down it's TuKa 2G service, and DoCoMo is shutting down it's PHS service. Both services together lost more than 2 million subscribers during 2006 - this is a much larger movement than due to number portability introduced on Oct 24, 2006.

KDDI offers both number portability and mobile email portability, and reports surprise that many former low-end TuKa users moved to top-end high-speed WIN (2.4 Mbps) data services.

For KDDI, enticing TuKa subscribers to move to high-end/high-speed AU services was an excellent preparation for number portability, and helped KDDI win in the first stage.

IC tickets top the ranks

fasol — Sun, 28 Jan 2007 06:40:00 +0000

Every year Nikkei Marketing Journal publishes a ranking list of the most successful products of the past year in the form Sumo wrestling results are traditionally displayed: there is a Western side and an Eastern side, winners at the top are displayed in much larger print than also rans at the bottom.

IC tickets are the "Ooseki" (second place) winners on the Eastern side of the Sumo ranking of hit products for 2006.

On March 18, 2007, more than 100 transportation companies of the Tokyo region including 25 train operators which serve a population of around 30 million will introduce PASMO IC-Tickets. Introduction of PASMO will increase market share for IC-tickets and ecash in Japan - and globally.

Read more in the latest edition of our
Suica and IC-Ticket report.

Human vending machine in Tokyo

fasol — Sat, 27 Jan 2007 08:38:00 +0000

While Coca-Cola promotes Cmode vending machines with mixed success (see our C-Mode report) for wallet-phones and mobile payments, a promoter used the opposite extreme at the most visible spot on Shibuya's Hachiko square recently: a human vending machine with a built-in charming human operator for the human touch (there is an upper window to serve adults and a special lower window to serve children):

QR code and color

fasol — Sun, 21 Jan 2007 06:41:00 +0000

QR-codes turn out to be the killer-app for camera phones - not MMS.

QR-Code have become ubiquitous in Japan, and link mobile phones to life in many ways. QR-Codex are usually the quickest, most efficient and cheapest way to link mobile phones to information in daily life, and to provide feedback in both directions, and even for user-to-user interactions.

QR-Codex do not have to be in boring black-and-white:

Operators, governments, equipment makers, start-ups rely on Eurotechnology Japan KK to plan QR-Code business.

PASMO: IC cards for transport

fasol — Sun, 21 Jan 2007 06:35:00 +0000

On March 18, 2007, more than 100 transportation companies (26 railway companies and 75 bus companies) - moving 30 million people of the Tokyo region - will switch to the IC card ticketing and e-cash system named "PASMO". PASMO will interoperate and partially compete with SUICA.

Preparations go back more than 20 years, when Japan's national railways started research on IC cards for ticketing. SUICA IC-card tickets were introduced commercially in November 2001 at 424 JR-EAST rail stations in the Tokyo region.

Tokyo's PASMO is likely to develop into one of the world's biggest electronic payment and e-cash systems.

Mobile Number Portability (MNP) in Japan

fasol — Fri, 05 Jan 2007 06:20:00 +0000

Mobile number portability created winners and losers in only two months - the main business challenge for Japanese operators is to avoid a price war.

KDDI is the clear winner in the first round, DoCoMo suffers a setback, and SoftBank did better than expected.

Today we released the 23rd edition of our JCOMM-Report - about 250 pages of overview and analysis of Japan's telecom sector.

KDDI gains 524,000 subscribers in Oct & Nov 2006. DoCoMo for the first time ever since it was founded experienced a net loss of subscriptions.

KDDI gains 600,000 new EZweb subscribers, Japanese operators earn much from mobile internet - subscription data show even better results for KDDI's EZweb.

NEW YEAR on i-Mode and EZ-web

fasol — Mon, 01 Jan 2007 06:42:00 +0000

Both i-Mode and EZweb top menu pages display Season Greetings and reflect Japan's seasonal mood: autumn sports days in schools, skiing in winter, Halloween and New Year.

Here are this year's New Year greetings for the Year of the boar on i-mode and EZweb which were displayed from January 1, 2007 for a few days during Japan's New Year vacation:

More about Japan's mobile internet:

DoCoMo and i-Mode
KDDI and EZweb
SoftBank and YAHOO-Keitai

FeliCa and Mifare cooperation

fasol — Mon, 20 Nov 2006 06:33:00 +0000

Paying with the mobile phone in shops and trains, unlocking doors, security check in offices, paying the air ticket and checking in, all just by waving the wallet phone close to a reader/writer unit is addictive - and daily life in Japan today.

SUICA in Tokyo, Octopus in Hong Kong and Oyster in London are great success stories but they use different and incompatible technologies and software.

For mobile payments to take off globally, global interoperability is a must.

NXP (Philips' former semiconductor division) and SONY on November 20, 2006 announced a cooperation, which will bring global interoperability to wallet phones and mobile payment.

"au design project 2006": TRILOGY

fasol — Thu, 16 Nov 2006 06:30:00 +0000

KDDI is unique among mobile operators in creating value from design for phones with the "au design project". Creating value for which consumers are willing to pay premium prices is a key to success in the rapidly growing global US$ 150 Billion mobile phone business.

au design project 2006:

The KDDI Designing Center showed the exhibition "TRILOGY", displaying some results of the "au design project 2006". The three concept phones are (from left to right):
- "kaos" by Naoki Sakai
- "cypres" by Nao Tamura
- "vols" by Ross McBride

"au design project": INFOBAR-2 by Fukawasa Naoto

fasol — Thu, 16 Nov 2006 06:29:00 +0000

KDDI is unique among mobile operators in creating value from design for phones with the "au design project".

Creating value for which consumers are willing to pay premium prices is a key to success in the rapidly growing global US$ 150 Billion mobile phone business.

INFOBAR was a big success for KDDI. Industrial designer Fukawasa Naoto recently created INFOBAR-2, and introduced it at a show at the KDDI Designing Center in Tokyo:

Ericsson Strategy & Technology Summit Tokyo

fasol — Wed, 15 Nov 2006 06:28:00 +0000

Eurotechnology's CEO was invited to attend Ericsson's Strategy & Technology Summit in Tokyo on November 15, 2006.

Ericsson's CEO, Carl-Henric Svanberg, Ericsson CSO - Chief of Strategy, Japan-CEO Rory Buckley and other Ericsson top management presented Ericsson's strategy and vision. About 100 investors and investment bank analysts were invited to attend.

I was given the opportunity to share the lunch table with CEO Carl-Henric Svanberg and had a fascinating discussion.

With some of the largest and most advanced mobile investments,
Japan's mobile market is one of the most important markets globally for Ericsson. Recently Ericsson won major contracts from SoftBank and eAccess/eMobile.

Barcodes for mobile payment

fasol — Sat, 11 Nov 2006 08:00:00 +0000

Japan's mobile operators DoCoMo, KDDI/AU and SoftBank are expanding their business into mobile payment and mobile credit, traditionally the realm of banks, credit card companies, financial institutions and cash. With the bubble/post-bubble bad loans problem largely resolved and the mega-mergers completed, Japan's banks are now ready again to develop new business.

Customer's camera phone reads the barcode or QR-code on an utility bill or mailorder invoice, and forwards secure payment instructions to the customer's bank account.

What is the expected impact?

(1) Expect positive impact on Mizuho's earnings.

(2) Today such payments are typically made by walking to the nearest convenience store: expect negative impact on convenience stores which handle much of the barcode based bill payments today.

(3) Expect additional competitors with alternative methods to compete with Mizuho in the domain of mobile phone based bill payments.

More about mobile payments in our "Mobile Payment and Keitai Credit Report"

More about QR codes in our "QR Code Report"

[MNP]: SoftBank's Zero YEN campaign

fasol — Sat, 04 Nov 2006 06:19:00 +0000

Mobile number portability (MNP) was introduced in Japan on October 24, 2006. Mobile number portability means that Japanese cell-phone subscribers (excluding PHS subscribers) can move their subscriptions between DoCoMo, KDDI/AU and Softbank while keeping the same phone number. However, number portability does not mean email portability, or portability of purchased content which us normally subject to strict digital rights management and normally cannot be transfered from one subscription to another.

SoftBank went into the MNP battle with fireworks of campaigns:

1. The "Zero YEN" campaign plays with the fire of a price war. As shown in the photograph below, from October 24, 2006, SoftBank stores prominently displayed "Zero Yen" prices for all handsets and many different services, creating the superficial impression that suddenly all SoftBank handsets and services are free of charge, which of course is not the case. This advertising trick led to an enquiry by Japan's fair trade commission. The fair trade commission later admonished SoftBank saying that some aspects of the campaign were misleading - however the fair trade commission at the same time admonished all other cell phone operators and PHS operator WILLCOM for different types of misleading advertising. SoftBank came away quite lightly - however the photograph below shows, that the ZERO YEN signs were covered up (and are still visible below the hastily applied cover sheet of paper).

2. The "unexpected campaign": Softbank introduced an "unexpected" Gold Plan, which offers essentially flat fee voice calls under certain conditions, but restricted in time and length, and also restricted to calls between SoftBank subscribers only. Since SoftBank only represents about 15% of Japan's mobile phone market, it is much easier for SoftBank to offere flat on-network plans, than for DoCoMo, since for DoCoMo a much larger ratio of calls would fall under the on-network plan. DoCoMo and KDDI therefore did not respond with any flat voice on-network plans.

3. SoftBank's computer systems were either overloaded, or broke down under the load of MNP, leading to irritated complaints by KDDI and DoCoMo, and some damage to the new SoftBank brand.

This photograph shows SoftBank's Zero Yen Campaign (left photograph). AFter a few days Japan's Fair Trade Commission started to investigate SoftBank (and all other mobile operators) and admonished them for misleading advertising practices - as a consequences the original Zero Yen poster is covered up (right hand photograph):