Read our CEO’s interview on BBC World TV about FeliCa wallet phones.
Watch the movie of the interview:
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Read our report Mobile payments in Japan.
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The Communications and Information Network Association of Japan (CIAJ) and the CEATEC trade exhibition invited our CEO to brief Japanese executives on the differences between Europe’s and Japan’s mobile phone markets, opportunities for Japanese mobile phone companies in Europe and difficulties for Japanese companies to overcome in Europe
Presentation at CIAJ Headquarters on Friday, September 30, 2005 (in Japanese)
Presentation at CEATEC Trade Exhibition on Thursday, October 6, 2005 (in English with simultaneous Japanese translation)
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From time to time our CEO is asked to brief top executives of major corporations – or even the President of Germany, or the Vice-Minister of Industry of France.
Several times this year we gave a presentation on “What’s hot in mobile in Japan”.
Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·
by Gerhard Fasol
Japan’s broadcasting markets (commercial TV + NHK + CATV + satellite + AM & FM radio) have annual combined revenues on the order of US$ 40 billion. The main players in this market are five large commercial TV groups and the semi-public NHK.
One of these five TV and media groups – TBS – has received an uninvited merger proposal by it’s largest shareholder – the internet portal Rakuten – and in parallel also attracted the Murakami-Fund as an investor.
Earlier this year Japan’s Murakami Fund acquired about 7% of the TBS Media Group, and declared that TBS was undervalued and should sell non-core assets, such as real estate and other non-TV / non-media related properties.
Recently, Rakuten acquired about over 20% of TBS shares, making Rakuten the largest shareholder of TBS. Rakuten announced a business plan for a merged Rakuten-TBS Group integrating Rakuten’s internet businesses with TBS’ TV and media operations. Since Rakuten’s stock market valuation is about 35% higher than TBS’ valuation (as of October 24, 2005), Rakuten’s management is expected to dominate a potentially merged group.
TBS’ management is not delighted with the prospect of losing control in this way. In response, three things happened:
At this time the acquisition battle for the TBS Group is in full swing and the final outcome is difficult to estimate. In parallel to the take-over battle, a public discusson by Japan’s industry leaders is examining the desirability of hostile take-overs in Japan.
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Japan’s Internal Affairs and Communications Ministry (Soumusho) is working to change regulations so that GPS is required on Japan’s mobile phones from April 2007.
This move has been expected for some time, but apparently details will be announced later in 2005. Nikkei reports that the accuracy of the location determination should be on the order of 150 meters.
Japan’s police receive about 9 million emergency calls per year, and Nikkei reports that about 1/2 of these are from mobile phones. For emergency calls from fixed line phones the precise location is communicated directly to the police and emergency service operators, however for mobile phones this is not the case, and the operators need to rely on the information given by the (often distressed) caller.
The regulations will require for the mobile operators to communicate the location of emergency callers to the Police and Fire Service emergency center operators.
Already for sometime KDDI sells almost all mobile phones with chips with built-in GPS (from Qualcomm), while all operators in Japan have developed a dense array of location based services which are deeply embedded in many mobile internet services. Today about 20% of mobile phones in Japan have GPS built-in, and we expect this ratio to increase to close to 100% around 2008-2010 (for more information consult our report on location based mobile services in Japan).
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by Gerhard Fasol
Here some highlights of this year’s Tokyo Game Show TGS2005:
At last year’s TGS2004 Microsoft’s XBOX exhibit was pretty low-key in a secondary hall. This year, at Tokyo Game Show TGS2005, Microsoft moved with a much bigger exhibit up into the prime position of the main hall right next to (current) market leader SONY Computer Entertainment (SCE)… While in 2004 and before, SCE was the uncontested leader of the market, Microsoft is not accelerating efforts with XBOX-360. While SONY’s PSP is fantastic, it’s being outsold in Japan by Nintendo’s DS…
Japan game market report (398 pages, pdf-file):
wLAN hotspot for PSP (SONY PlayStation Portable) for game sharing and
download. However, with a little bit of software, PSPs could be used to hold VOIP telephone
calls via these (or other) wLAN hotspots:
This year is the first appearance of merged BandaiNamco, which used to be separate companies until recently:
The following figure summarizes some of the recent mergers in Japan’s game software industry:
SONY staff greeting customers at the end of the first day of the show
(while greeting customers there were facing Microsoft’s impressive Xbox360 exhibition area…):
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We worked out that about US$ 0.5 Billion/year worth of train tickets for the Tokyo-Osaka Shinkansen train line are sold by mobile phone. Not a bad m-commerce record for a single train line. For details see our Mobile Payment report. The picture shows a Shinkansen train preparing to stop for 2-3 minutes in Nagoya on the way to Osaka:
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by Gerhard Fasol
Japan’s mobile game software companies are global superpowers. They are all historically grown and linked to other industry sectors, such as characters, arcade games, pachinko (pinball parlor) machines. Japan game software industry consolidation is driven by an emerging paradigm shift from traditional home video games to a new world of online games, network games and mobile games.
For details read our Japan game market report (398 pages, pdf-file):
While the market for traditional home video gamesoftware is rapidly shrinking, a landslide shift is underway to network games, online games and mobile games.
These changes bring consolidation. Some recent mergers are:
The Square-Enix deal is particularly interesting because it underlines the Japanese preference for role playing games.
Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved
Japanese consumers clearly express their preference:
99.8% of music downloads are to mobile phones, and 0.2% of music downloads are to PCs and portable MP3 players.
Clearly Japan’s internet music services did not offer what consumers want: internet music downloads to PCs and portable MP3 players recently dropped from
Poweredcom has doubled investments in FTTH to YEN 44 Billion (US$ 0.4 Billion) for FY 2005/2006 from YEN 22 Billion in FY 2204/2005. (For details and analysis of Japan’s FTTH market read our report on Japan’s telecom sector).
Partnership with KDDI‘s triple-play leverages Poweredcom’s present and future FTTH investments.
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KDDI announced to absorb the three TuKa companies into AU: with the stroke of a pen, AU will be stronger by 3.5 million subscribers.
The three TuKa companies managed a successful turnround by focusing on the silver market. We think that KDDI will probably switch off TuKa’s 2G PDC network quite soon, as they have done with their own 2G/PDC network.
TuKa had managed a successful turn-round recently, so it will not be a financial load on AU. KDDI will gain efficiency and economies of scale by concentrating all mobile services under the single AU brand with a single CDMA2000 network.
Report on “KDDI, AU and UQ Communications: pioneers of mobile music and flat data rates, analysis report” (approx 200 pages, pdf file)
Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved
Wireless Japan 2005 marks six years of mobile internet in Japan, which started February 1999 in Tokyo. Now in the sixth year, wireless internet, i-Mode and EZweb and J-Sky are maturing, mobile payment solutions are being introduced.
Some highlights:
KDDI has timed it’s entry to DoCoMo’s mobile FeliCa camp to coincide with the time, when the railway nearfield payment card SUICA with 10 million users will join the mobile FeliCa system. KDDI demonstrated the first EZ-FeliCa phones:
DoCoMo is expanding the penetration for mobile FeliCa, demonstrating “TownPocket”: TownPocket is a FeliCa terminal, where users can link their phones via the FeliCa reader/writer interface to pick up local information. Possibilities are to bookmark automatically the URL of a shop or a sightseeing spot, or to send or receive an email with local information.
With mobile phones quickly becoming pocket sized music centers in competition to iPod’s but in much larger numbers, battery life is a problem. Fuel cells give hope for longer life till the next recharge. As you can see in the picture, the prototype fuel cells are still too large for daily use:
Hitachi shows a prototype future generation phone with:
also shown is the recharge for the fuel-cell:
Futuristic concept phones are a tradition at the Wireless Japan show. The following images show multi-media concept phones:
This flask-stile multimedia presenter shows images on flake-like suspended displays. Presentation of particular images helps to create the mood of the moment:
Media phone:
Digital rights management (DRM) concept study. Digital rights are sold in the style of wrapped sweets, and can be played or eaten. Dropping a digital-right-sweet into the receptacle plays the music or the video corresponding to this right. The sweets/DRMs can be eaten up after their value has been used up:
e-Mobile is preparing for it’s debut in Japan’s mobile phone market, most likely from 2006 or 2007. While new mobile entrant Softbank was not at the Wireless Japan show, e-Mobile had a massive prototype and concept presentation.
e-Mobile showed a range of concepts for the services being developed with partners Fujitsu and Lucent. Good phones and solid concepts, but nothing surprising yet at this stage.
KDDI had a very large impressive show of AU’s range of mobile phones, business software applications, it’s range of mobile portals including comics, books, auctions, music and shopping, and EZ-FelIca’s debut as shown higher up. An attraction was a robot display, the robot is controled via blue-tooth by mobile phone:
We have substantial documentation about the Wireless Japan 2005 exhibition, and most other year’s Wireless Japan exhibitions. If you need information or documentation for prior art or other investigations, please contact us.
Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved
QR codes are everywhere in Tokyo – they have become probably one of the most important input tools for mobile phones…
We published our brand-new QR code report today
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Japan’s telecom operators are investing to build IP (Internet Protocol) backbone networks:
More: Japan Telecommunications report
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Japan’s top three mobile operators DoCoMo, KDDI and Vodafone announced plans to invest about US$ 15 billion during FY 2005 (April 2005 – March 2006):
For recent financial data and analysis of Japan’s telecom and mobile sector: Eurotechnology report on Japan’s telecom industries
Find details about SoftBank’s acquisition of Vodafone KK (Vodafone’s Japan company) in our SoftBank report
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About 20% of mobile phones have GPS in Japan, and both KDDI and DoCoMo are integrating location based services into their mobile internet services EZweb and i-Mode. We completed a report on location based services in Japan Eurotechnology Report on location based services and mapping in Japan.
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On April 28, 2005 KDDI‘s CEO Tadashi Onodera, announced spectacular results for the financial year April 2004 – March 2005. Net income increased by 71% and KDDI announced approximately US$ 4 Billion in investment capital expenditure for the financial year 2006 (April 2005 – March 2005).
We prepared a 230 page analysis of KDDI’s businesses
Copyright·©1997-2013 ·Eurotechnology Japan KK·All Rights Reserved·
by Gerhard Fasol
The Mobile Payment Forum promotes usage of mobile phones for payments, and works on interoperability, usability and standardization issues.
The major credit card companies (VISA, Mastercard, American Express…) together with the leading mobile phone makers (Nokia, Motorola, NEC…), and mobile operators (Vodafone, DoCoMo, TIM, T-Mobile, Sprint…) lead the Mobile Payment Forum.
On April 4, 2005, the Members and Directors for the first time held their meeting in Tokyo. Eurotechnology Japan KK took part in the organization of the meeting, and Gerhard Fasol gave an almost 2 hour long keynote presentation about mobile payment in Japan.
At this meeting, I also had the opportunity to introduce KDDI to the Mobile Payment Forum – there was no previous relationship between KDDI and Mobile Payment Forum.
KDDI gave a keynote, and explained KDDI’s mobile payment business, and in particular also the recent success of mobile books, mobile novels, and mobile manga: ebooks, novels and manga specially produced for mobile phones.
Mobile Payment Forum Member’s meeting in Tokyo: “Mobile Payment Forum is a cross-industry organization launched in November 2001 to create a framework for standardized, secure and authenticated mobile payments, based on payment card accounts. The Forum intends to quickly and efficiently act as the bridge between the mobile and financial industries to accelerate the maturity of the mobile marketplace”.
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KDDI/AU announced that 5 Millions Chaku-Uta-Full songs have been downloaded until April 3, 2005.
Download our 230 page analysis of KDDI/AU
Download our “mobile music” report
Note added: on June 15, 2005, KDDI reported 10 million Chaku-Uta-Full downloads…
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March is the month when new subscriptions peak in Japan. During March 2005 around one million new subscribers signed up for mobile services in Japan, the net gain (new subscriptions minus cancellations) was 930,500. New subscribers were shared as follows between carriers:
DoCoMo: + 480,200 (+ 51.6%)
KDDI/AU: + 436,100 (+ 46.9%)
WILLCOM: + 33,300 (+ 3.6%)
KDDI/TuKa: – 2,600 (- 0.3%)
Vodafone: -7,400 (-0.8%) (previous counting method: -58,400)
Astel: – 9,100 (- 1.0%)
TOTAL: + 930,500 (100%)
Vodafone announced a new method to calculate numbers. Without this new way of calculating, Vodafone’s loss would have been: -58,400
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Tokyo, April 3, 2005
Briefing given to the President of Germany, Horst Koehler, and his wife, by Gerhard Fasol in the German Embassy, Tokyo, on April 3, 2005, at the beginning of the President’s official visit to Japan to open the “German Year in Japan”. Accompanying President Horst Koehler were 20-30 leaders of Germany, including Members of Parliament, the President of the German Federation of Industry – the German Ambassador to Japan was chairing the meeting.
Japan is a technology super power, with strong creativity and power to innovate. I would like to illustrate this fact with a few examples, how innovation in Japan creates new industry sectors and new employment, I would like to describe some consequences for Germany and for Europe, and express some recommendations.
Thomas Alva Edison invented light bulbs in 1879 (US Patent No. 223, 898). Glass tubes in radio and television receivers have been replaced a long time ago by semiconductors. Semiconductors use far less energy, have a longer operational lifetime, and are much more friendly to the environment.
About 15 years ago, Shuji Nakamura invented the technologies[1] to replace light bulbs and fluorescent tubes by semiconductors, in same way as this has happened in radios and television receivers a long time ago. Shuji Nakamura invented these technology in a small company, Nichia Kagaku Kougiyou, located in Anan, about two hours by airplane from Tokyo. He achieved these breakthrough inventions essentially on his own and with great personal sacrifice.
Japan’s technology industries some years ago caused US electronics companies including INTEL and MOTOROLA to restructure totally. Could the German automobile industry expect similar interactions with Japan?
What is the significance for Germany? Technologies and business models are globally valid. Therefore Japanese innovations, such as light emitting diodes or mobile phones unavoidably reach Germany. Interaction with Japan have forced leading US corporations including INTEL and MOTOROLA to totally restructure: INTEL switched it’s entire business from memory chips to CPUs because of Japanese competition. With increasing interaction between Japan and Germany, I expect similar impact by Japan on Germany in the future.
As an example, I would like to mention the automobile industry sector. Toyota’s market capitalization is US$ 122 Billion, while DaimlerChrysler’s is around US$ 45 Billion, almost three times smaller. It is therefore obvious that Toyota by increasing business activities in Europe, can have major impact on the largest European car companies. Similar factor three ratios exist between the valuations of Honda and Volkswagen, Nissan and BMW: Honda as well as Nissan enjoy about three times higher valuations by the international investment community than Volkswagen and BMW. I recommend therefore European companies not to neglect Japan.
As an example, we are at present preparing project work with a US company, which will invest about US$ 2 Billion globally this year in new production—100% of this high-technology production investment will be in Japan.
Researchers and companies in Japan and the USA have a great home advantage compared to European researchers and companies, because Japan and the USA have a simple and cost efficient patent system. The table below, taken from an official EU-Website[2] shows that obtaining patent protection for Europe is much more complicated and much more expensive than for USA and Japan. In actual fact, the real situation is even more dramatic than the official table from the EU website shows: in real life, US patents are obtained much cheaper than shown in this table, and obtaining patent coverage for all European countries is much more expensive than the case of 8 countries shown in the table, which only gives protection in a minority of European countries.
A cost efficient and simple European Patent is necessary to correct this European home-disadvantage
An eminent US committee of experts some time ago examined technology cooperation with Japan and optimization with respect to US interests. This committee concluded that technology cooperation is not an aim in itself, but there should be measurable targets. The committee found that a suitable target is the creation of highly paid employment in the USA.
I would recommend, that in case increased technology cooperation with Japan is discussed during the German Year in Japan, that in the same way as the USA did, also Germany examines technology cooperation with Japan overall, and orients technology cooperation towards measurable targets. I can well imagine that creation of highly paid employment in Germany could also be a good way to measure the value of individual cooperation projects.
Copyright notice: photograph of the The President of Germany Horst Köhler is public domain, see Wikipedia here.
If you need the German original or the English translation of Gerhard Fasol’s presentation to German President Horst Koehler please contact us
Copyright 1996-2019 Eurotechnology Japan KK All Rights Reserved
e-Access Chairman & CEO, Sachio Semmoto and Lucent Chairman & CEO Patricia Russo on March 30, 2005 in Tokyo, explained their joint tests of HSDPA services in Tokyo. e-Access is preparing to enter Japan’s mobile communications industry with the brand “e-Mobile”, and is currently conducting tests with Lucent and Fujitsu as equipment providers.
Former US Ambassador to Japan, Thomas Foley, presenting his wishes for the Lucent-eAccess cooperation:
Sachio Semmoto and Patricia Russo answering questions having presented their visions of new mobile services in Japan:
e-Mobile’s logo:
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Japan’s mobile subscriber numbers for Feb 2005 came out yesterday…
DoCoMo is ahead again after a soft period on the strength of services and handsets, and KDDI/AU is still going strong driven by the designer series, good tariffs/discounts, music, WIN etc.
Willcom (the former DDI-Pocket) is strengthening under new management, new name and new campaigns and network upgrades, TuKa is falling back after it’s great “TuKa-S” success… and Vodafone succeeded to stabilize subscriber losses somewhat which is a mild step in the right direction and might be the first indication of Mr Tsuda’s influence…
Stimulated by the needs of our customers, who need to roll out services across the networks in Japan, we have started market surveys, interviewing mobile phone customers of all kinds on Tokyo’s streets in “focus groups”, as we do when required for our customers to get a feel for the market. I always make a point to take part personally in such consumer research, and often do some myself. In the case of mobile phone habits, the first approach at interviewing just reflects back the messages of the commercials and publicity campaigns. Only in-depth interviewing and discussion then reveals the real thoughts which are normally quite different. We learnt a lot about what average Japanese consumers think about DoCoMo, AU and Vodafone, building up a good picture. But the numbers also tell a clear story:
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Put until mid-2004, cumulatively KDDI (Japan’s No. 2 mobile operator) sold more “chaku-uta” mobile music song clips in Japan alone than Apple sold music via iTunes globally.
This fact shows both the power of mobile music, and also the size of Japan’s mobile markets in terms of cash sales.
KDDI/AU reports 3 million Chaku-uta-full (full song) downloads since it’s start on November 19, 2004:
More in our “Mobile Music Japan” report.
Copyright (c) 1997-2013 Eurotechnology Japan KK All Rights Reserved
Eurotechnology Japan KK in the press:
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Livedoor and Fuji TV: New economy (Livedoor) is knocking at the door of old economy (Fuji-TV) (for details see our “Japan’s Media” report):
Below is an outline of the take-over battle raging right now. The complex cross-shareholding is puzzling, and the reason for it is surprising to the uninitiated: a long time ago there was no radio and no TV, only newspapers. Radio in Japan was born as babies of newspaper companies, and TV stations were born as babies of the Radio stations. So at the beginning Fuji-TV was a tiny in-company venture subsidiary of Japan-Radio (Nihon Hosou). The cross-share holding structure dates from these pioneering days of TV in Japan and has not been touched since – until Livedoor’s Takafumi Horie came along.
Takafumi Horie’s nickname in Japan is Horiemon. Why? Because many people think that Takafumi Horie looks similar to Japan’s cartoon character Doraemon.
By the way: some media falsely report that Horie is the founder of Livedoor. This is not the case. Horie-san founded a website design company called “Livin’ On the EDGE Inc” in 1996, later renamed EDGE, and many other companies. In 2002 he acquired the free email/ISP company Livedoor.
This battle stimulated us to release our “Japan Media” report.
Copyright (c) 1997-2013 Eurotechnology Japan KK All Rights Reserved
by Gerhard Fasol
In February 2005 Shiro Tsuda (津田志郎, CEO of Vodafone KK for a few weeks) told Bloomberg that global “Vodafone CEO Arun Sarin wants Vodafone in Japan for 10, 20, 30 years”.
It appeared that Vodafone KK – with the help of a major headhunting firm – had staged a major success, when Vodafone KK headhunted Mr Shiro Tsuda as their Japan-CEO as of December 1, 2004. Mr Shiro Tsuda was the founding employee No. 1 of NTT’s mobile phone division, which later became NTT-docomo.
This temporary success turned into an embarrassment for Vodafone KK when a few months later, Mr Shiro Tsuda, resigned from his Vodafone KK-CEO position, became non-executive Chairman of Vodafone KK, and soon after left Vodafone altogether.
About one year after Vodafone-CEO Arun Sarun declared in February 2005 that Vodafone had the intention to remain in Japan for 10, 20, 30 years, on Friday March 17, 2006, Vodafone and Softbank announced that Vodafone sells Vodafone KK (the totality of all Vodafone operations in Japan) to Softbank, and terminated all operations in Japan.
pdf file, approx 120 pages, 47 figures 18 photos, 7 tables
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Vodafone’s challenges in Japan: BusinessWeek and The Economist both analyze and comment on Vodafone’s business situation in Japan, where the mobile internet was first implemented successfully starting in February 1999, far earlier than anywhere else in the world.
pdf file, approx 120 pages, 47 figures 18 photos, 7 tables
Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved
The following figure compares Sales (Financial year ending March 31, 2004), Net profits after taxes(Financial year ending March 31, 2004), and market capitalization (as of February 17, 2005) for DoCoMo, KDDI and Vodafone (in each case consolidated for the global company):
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Today, February 18, KDDI-AU introduced PENCK – the latest model in the Designer Series, designed by Makoto Saito Design Office Inc.:
Designer: Makoto Saito Design Office Inc.
Data rate = 2.4 Mbps
Music = Chaku-Uta-Full, stereo speakers
Camera = 1.24 Megapixel, incl QR barcode reader
GPS = incl. Naviwalk navigation
and more…
When I was asked to brief the President of Germany, Horst Koehler, on Japan’s technology sector, KDDI kindly loaned me PENCK-phones, which I used in one of the demonstrations for President Koehler of Japan’s mobile phone industry.
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