Categories
disruption Galapagos effect Internet Mobile

Mobile internet’s 17th birthday

The global mobile internet revolution started with Docomo’s i-Mode on February 22, 1999

i-Mode, Happy Birthday!

i-mode menu NTT docomo
i-mode menu NTT docomo

Today, exactly 17 years ago, on February 22, 1999, NTT-Docomo launched the world’s first mobile internet service, i-Mode, at a press conference attended only by a handful of people.

NTT-Docomo created the foundation of the global mobile internet revolution, and i-Mode is still a cash-cow for Docomo in Japan, but Docomo did not succeed to capture global value.

i-Mode pioneered many business models, which are today monetized by Apple and Google (mainly via Android).

i-Mode also contributed to make Japan the world’s biggest App market in terms of cash revenues, and helped Japanese app companies to be among the world’s largest and top grossing.

Read in detail in our blog:
i-Mode was launched Feb. 22, 1999 in Tokyo – birth of mobile internet

Japan telecommunications industry report

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Categories
Internet media Mobile social media

Social media marketing: Social media is revolutionizing the way we market brands (Ray Bremner, President & CEO, Unilever Japan)

Social media revolutionize brand marketing: people don’t want to be told what to buy, but want to discover and share

Social media marketing: Consumers have now taken control of what they watch, read and listen to and so the messages they receive are the ones they chose to receive. Brands must now deserve that attention through appealing to their needs and feelings and not simply by buying airtime on television.

Ray Bremner, President & CEO of Unilever Japan gave a talk at Waseda University

To understand Japan’s media landscape read the “Japan’s media” report.

Social media marketing (Ray Bremner, President & CEO, Unilever Japan)
Social media marketing (Ray Bremner, President & CEO, Unilever Japan)

From Advertising to consumers to mattering to people

My key take-away is that social media have made the top-down “begin told” way of advertising obsolete, and replaced it by finding, sharing and engaging.

About Unilever:

  • Unilever was founded in 1929 by the merger of the British soap maker “Lever Brothers” (founded in 1885 by William Hesketh Lever, The Right Honourable The Viscount of Leverhulme), with the Dutch margarine producer “Naamloze Vennootschap Margarine Uni”, which was formed by the merger of several margarine companies, including those of Antonius Johannes Jurgens and Samuel van den Bergh. Soap brought hygiene to ordinary people, and margarine helped people who could not afford butter. Both companies, Lever and Margarine Uni had in common that they used palm oil as raw material.
  • The merger of Lever and Margarine Uni was decided over dinner in London in 1929, and written down in a 100 word merger agreement – unthinkable today for an M&A agreement.
  • About 50% of Japanese people have Unilever products at home
  • Unilever vision 2010 is: double the business, while reducing the environmental footprint. Execution of this vision is measured by 60 KPIs and the results are published.
  • Unilever vision:
    • We work to create a better future every day.
    • We help people feel good, look good, and get more out of life with brands and services that are good for them and good for others. We will inspire people to take small everyday actions that can add up to a big difference for the world.
    • We will develop new ways of doing business that will allow us to double the size of our company while reducing our environmental impact.
  • Unilever mission: building brands that improve people’s lives.
Ray Bremner, President & CEO of Unilever Japan: Social Media is revolutionizing the way we market brands
Ray Bremner, President & CEO of Unilever Japan: Social Media is revolutionizing the way we market brands

Ray Bremner: “social media are revolutionizing the way we market brands, and they are making people like me extinct”.

From 2001 to 2013, the average time Japanese consumers spend watching TV has decreased from about 3 1/2 hours/day to 3 hours/day, while the time spent with PC & mobile has tripled from 1/2 hour/day to 1 1/2 hours per day. Most Japanese age groups use social media, usage peaks at 35% for men in their 20s, and around 45% for women in their 20s, and around 30% in their 30s.

TV reaches about 88% of Japan’s population, and digital media (PC and mobile) reach about 73%.

From 2001 to 2012, advertising expenditure in Japan has decreased from about US$ 27 Billion/year to US$ 23 Billion/year, while expenditure for digital media has increased from zero to US$ 12 Billion/year. For an overview of Japan’s media markets – see “Japan’s Media“.

How to make marketing messages a pleasure rather than annoying?

How do we succeed? Crafting brands for life.

  • Put people first, not just consumers. Real people with real lives.
  • Build brand love.
  • Unlock the magic.

The brand love triangle

How do you create a conversation people want to participate in?

We use the “brand love triangle. “The people we serve” are in the center. The three edges of the brand love triangle are:

  • Purpose (brand point-of-view) <— brand history dive
  • Product truth <— product dive
  • Human truth <— people immersion
Ray Bremner, President & CEO of Unilever Japan: Real people with real lives
Ray Bremner, President & CEO of Unilever Japan: Real people with real lives

“Dove Real Beauty Sketches” by Steve Miles

Brands need a purpose, a point of view. Before 2002 Dove did not have a purpose.

Steve Miles talking about Dove and himself:

93% of women do not think they are beautiful – men are opposite: 93% of men think that they look just great. Dave Miles (and Dove’s) point of view is that everyone is beautiful. This point of view is expressed in “Dove Real Beauty Sketches”, which won the Titanium Grand Prize and 10 Gold Lions at Cannes 2013:

As of today, “Dove Real Beauty Sketches” has 61,767,827 views on YouTube, which is not as much as PSY’s Gangnam Style with 1,888,086,686 views, but still – pretty amazing.

Another example of brand communication is Harley Davidson, which signifies “Freedom of the Road”, independent character. Harley Davidson creates a bond to customers by presenting each customer with the “umbilical cord”, the belt with which the Harley Davidson motor bicycle was tied down during the transport from the factory to the customer.

Focus: In 2000, Unilever had 1600 brands and today 400 brands.

Q&A

Question: How many of your campaigns in Japan are global campaigns? How many are Japan-only?

Answer: practically all campaigns for all international brands of any company are made in Japan for Japan. That is not to say that global ideas do not work. In fact in most cases International Brands have the same brand and advertising positioning in Japan as elsewhere in the world. What does differ for Japan is that often Japanese consumers have different usage habits, have different views about the world and the cues within the advertising can leave different impressions on Japanese minds. The Japanese consumer is highly observant of small details in advertising ; much more so than the average European for example.

That means that we test Global campaigns but very often we have to create Japan only executions so that how we express the idea is done totally with the Japanese consumer in mind. This is more costly and time consuming but essential for success.

Japan media analysis report:

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Categories
Economics Internet

Hiroshi Mikitani about the Japan Association of New Economy (JANE)

Hiroshi Mikitani about how Japan should become more competitive

Hiroshi Mikitani: presentation of his new book = Competitiveness

Today Hiroshi Mikitani, Founder and Chairman of Rakuten, gave a talk at the Foreign Correspondents Club about his Japan Association of New Economy (JANE) and about his new book authored with his father entitled Competitiveness. Mikitani is also member of Prime Minister Abe’s Competitiveness Council.

Overall Mikitani explained some very reasonable sounding suggestions for changes towards overcoming Japan’s current 15 year stagnation. He made clear, that the No. 1 reason for Japan’s stagnation is not lack of technology or lack of innovation, but is due to insufficient quality of top managers/executives of Japanese companies. Therefore most of Mikitani’s suggestions for improvements focus on increasing the quality of top executives at Japanese companies both via education and also via bringing in more non-Japanese competition. Mikitani also emphasized his close relationship with Prime-Minister Abe, he mentioned having had dinner yesterday with Prime-Minister Abe, and expressed is confidence in Prime-Minister Abe’s abilities and his power to execute. One of the questions the audience asked during Q&A was that similar suggestions for improvements have been heard over many years, and asked whether this time these suggestions will be implemented.

Hiroshi Mikitani
Hiroshi Mikitani

Mikitani is Representative Director of the Japan Association of New Economy (JANE).

Japan Association of New Economy (JANE) has three focus areas:

  1. Innovation
  2. Entrepreneurship
  3. Global standards

Mikitani emphasizes that the major reason for Japan’s stagnation is not lack of innovation, but top management with low capability and no vision. – Japan’s No. 1 problem are Japan’s executives.

To increase the competitiveness of Japan:

  • Japan does not lack technology, but global business management capability and business innovation
  • Current system protects top management with low capability and no vision. Top management needs to be renewed.
  • Efficiency of industries must be increased via competition
  • Japan must overcome the present Galapagos-like social environment
  • Japan must select Key Performance Indicators (KPI) and measure improvements in competitiveness against these KPIs. Must set targets, and measure progress.
  • Corporate tax rate in Japan should be lowered, and should target to be the lowest level of developed countries

Japan must improve global expansion and must improve quality of management:

  • Join TPP
  • Accelerate introduction of International Financial Reporting Standards (IFRS)
  • Increase quality of top business managers and human resources
    • Attract top talent from around the world: reduce tax progression, introduce stock based remuneration
    • Educational reform: improve English education, improve IT education, cultivate strategic thinking
    • Encourage study abroad
  • Increase company’s global expansion capability, eliminate Galapagos regulation
    • Terrestrial digital media broadcasting (“Chi-Degi”, One-Seg)
    • Medical
    • Communication networks, NGN
    • Radio spectrum
  • Open up capital markets, bring market mechanisms into corporate management:
    • Ban extreme anti-takeover measures, ban poison pills etc
    • Reduce cross-shareholding

Japan needs education reform and needs to cultivate world-class business people:

  • Japan’s education system is ranked on 43rd position (out of 144) by the World Economic Forum (2012).
  • Quality of management schools is ranked on 80th position (out of 144) by the World Economic Forum (2012).

Hiroshi Mikitani submitted detailed materials to the Industrial Competitiveness Council Meeting on January 23, 2013. These materials can be downloaded here: http://jane.or.jp/img/english/pdf/jane20130129.pdf

Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

Categories
Internet

Cloud computing trends

Keynote article about Cloud computing impact and trends in the RENESAS ELECTRONICS customer magazine and website “Renesas Edge Global Watch”

Gerhard Fasol: “Cloud computing impact & trends” (English language)
Gerhard Fasol: “Cloud computing impact & trends” (Chinese language)
Gerhard Fasol: “Cloud computing impact & trends” – 世界のクラウド・コンピューティング事情(1):クラウド・コンピューティングとは? (Japanese language)

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

Categories
Internet

Overview of Japan’s Data Center Landscape (opening keynote)

“Overview of Japan’s Data Center Landscape” (Opening keynote)
Speaker: Gerhard Fasol
May 22, 2013
9:15-9:45
Tokyo Convention Hall, Great Hall on 5th Floor, TOKYO SQUARE GARDEN, 3-1-1 Kyobashi, Chuo-ku, Tokyo
Data Center Summit Tokyo
Data Center Summit Tokyo (Japanese text only)

Categories
Internet media Mobile TV

Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)

Two keynotes on “Evolution of TV” and “Social TV” and chaired session at BCWW2009 Global Media Forum, Seoul, Korea, September 10, 2009

Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)
Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)

Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)
Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)

Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)
Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)

Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)
Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)

Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)
Evolution of TV and social TV (Keynotes at BCWW2009 Global Media Forum, Seoul, Korea Sept. 10, 2009)

Categories
Internet media Mobile

Yahoo Japan – Yahoo! Complication

There are two YAHOO!s – YAHOO! Inc and YAHOO! KK. (ヤフー株式会社)

Yahoo! KK, ヤフー株式会社 is a Japanese corporation listed on the Tokyo Stock Exchange

Yahoo! KK (ヤフー株式会社) is not a full/100% subsidiary of Yahoo Inc, but Yahoo! KK is a publicly traded company, listed on the Tokyo Stock Exchange.

Ownership of Yahoo! KK (ヤフー株式会社)

  • 35.45% by SoftBank
  • 6.42% by SoftBank subsidiary SBBM
  • 34.74% by Yahoo Inc.
  • 23.39% other shareholders via Tokyo Stock Exchange
  • 100% Total

Thus effectively:

  • SoftBank (SoftBank + SBBM) holds 41.87% of Yahoo! KK (ヤフー株式会社) shares
  • Yahoo Inc. holds 34.74% of shares

History background of Yahoo Japan

Masayoshi Son was one of the first and major investors in Yahoo Inc., and obtained the rights to build Yahoo Japan with part investment and license to trade marks and technology from Yahoo Inc.

Masayoshi Son and his SoftBank Group founded Yahoo Japan on January 31, 1996, and built Yahoo Japan into one of Japan’s most successful media and internet companies.

Yahoo KK started trading on the Tokyo Stock Exchange (Code 4689) with the IPO on October 28, 2003.

Market cap and size of Yahoo Inc vs Yahoo Japan

Yahoo Inc and Yahoo KK (ヤフー株式会社) are traded totally independently on different Stock Exchanges. Therefore share price and market capitalization are not directly related.

There are days when Yahoo KK (ヤフー株式会社) has higher market capitalization than Yahoo Inc minus the holding of Yahoo KK shares.

Yahoo Inc and Yahoo KK (=Yahoo Japan) market cap before and after Microsofts' bid
Yahoo Inc and Yahoo KK (=Yahoo Japan) market cap before and after Microsofts’ bid
Yahoo Inc vs Yahoo KK (Yahoo Japan) revenues and income
Yahoo Inc vs Yahoo KK (Yahoo Japan) revenues and income

Preview – SoftBank today and 300 year vision report:

Our Report on “SoftBank today and 300 year vision” (approx 120 pages, pdf file)

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

Categories
Internet Mobile

Yahoo!-keitai replaces Vodafone-Live!

SoftBank replaced Vodafone-Live! by Yahoo!-Keitai. SoftBank phones have a “Y!”-button which links to Yahoo!-keitai. Yahoo-Keitai! offers a list of official sites, new services (e.g. a new communicator service), and also access to free mobile internet sites through the YAHOO directory, as well as access to YAHOO services, such as YAHOO-auctions.

SoftBank replaces Vodafone-Life by Yahoo!-keitai as part of the acquisition of Vodafone-Japan
SoftBank replaces Vodafone-Life by Yahoo!-keitai as part of the acquisition of Vodafone-Japan

YAHOO!-keitai is a fresh start to revive the mobile internet service, previously known as Vodafone-Live!, and which had been losing market share to competitors i-Mode and EZweb for about 4 years. Previous to the Vodafone-Live! period, Jsky had been successful in gaining market share both from i-Mode and EZweb.

Market share in Japan's mobile internet market: Vodafone-Life was continuously losing market share before it was acquired by SoftBank, while KDDI's EZweb was winning market share over several years
Market share in Japan’s mobile internet market: Vodafone-Life was continuously losing market share before it was acquired by SoftBank, while KDDI’s EZweb was winning market share over several years

Understand Softbank: our report: “SoftBank today and 300 year vision”

pdf file, approx 120 pages, 47 figures 18 photos, 7 tables

Copyright 2013 Eurotechnology Japan KK All Rights Reserved

Categories
Internet M&A Mobile

ACCESS CEO Toru Arakawa (Oct. 6, 2006)

Toru Arakawa, CEO and Founder of ACCESS, gave a keynote speech at this years CEATEC show in Makuhari on October 6, 2006, outlining ACCESS strategies.

ACCESS is the maker of NetFront browsers and other software at the core of DoCoMo’s i-mode. ACCESS acquired PalmSource and is developing the Access Linux Platform (ALP) based on the PalmSource acquisition.

With ALP, ACCESS is planning to deliver a full software stack for mobile phones based on Linux. In his speach Toru Arakawa outlined company strategy also beyond mobile phones to multimedia home centers.

Looks to me like ACCESS is shaping itself to compete with APPLE and Microsoft both in the mobile phone and the home entertainment markets.

ACCESS CEO Toru Akarakawa
ACCESS CEO Toru Akarakawa

ACCESS CEO Toru Arakawa
ACCESS CEO Toru Arakawa

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Categories
Internet Mobile

YAHOO and Google’s mobile strategies

Japan is a couple of years ahead of Europe and US in mobile communications by most measures

What are GOOGLE and YAHOO doing in Japan’s mobile sector?

GOOGLE started mobile operations in Japan by partnering with KDDI (Japan’s No. 2 mobile operator with about 25 million mobile subscribers) to develop mobile search.

YAHOO-Japan made a large step forward when SoftBank acquired Vodafone’s Japan operations in March this year

On March 17, 2006, SoftBank and Yahoo KK (Yahoo Japan) acquired Vodafone-Japan.

SoftBank’s latest mobile phones include a “Y” = YAHOO button:

SoftBank's Yahoo button
SoftBank’s Yahoo button

Yesterday, August 26, 2006, SoftBank opened it’s new flagship store in Tokyo-Roppongi including a YAHOO-Spot:

SoftBank opens Yahoo-spots within the SoftBank stores
SoftBank opens Yahoo-spots within the SoftBank stores

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Categories
Finance Internet Software

About Tokyo Stock Exchange Turbulence on CNBC and RedHerring

Wednesday January 18, 2006 I was interviewed live on CNBC’s “Worldwide Exchange” news program about the turbulence on the Tokyo Stock Exchange following lower than expected quarterly earning reports by Intel, Yahoo and IBM, and a sell-off of Livedoor shares. Here is a summary of what I said in the interview:

Overall I am very optimistic for Japan’s economy, and I expect that the stock markets will recover soon.
There are short-term issues, mid-term issues and long-term issues.
Short-term, there is impact by Intel’s lower than expected results in the semiconductor sector, especially on Tokyo Electron, which shares also dropped substantially. However I think that the strong drop in share values on the Tokyo Stock Exchange (TSE) was much more an effect of the Livedoor issues than disappointment with the US high-tech results.

The Livedoor issues are temporary and not significant for the bigger picture in Japan, and will be resolved very soon by the Police, Stock Exchange and the other relevant authorities. I don’t expect long-term impact. There may be some changes in rules concerning M&A.

Concerning the Tokyo Stock Exchange (TSE): the capacity of the TSE seems to be around 4 million transactions/day, and the Chairman of the TSE stopped trading when the transaction volume started coming close to this limit. This shows the IT limitations of the TSE. This would be less serious if it was an isolated incident, however during the last year there have been several IT related incidents, such as the incident where erroneously 600,000 shares were sold at a price of 1 YEN, instead of one single share for YEN 600,000, which caused huge losses, and was not caught by the trading software, and there have been a number of similar glitches recently. So clearly the IT infrastructure needs improvement. However, from what I have seen in Japan, I expect now a lot of serious committee work, and I expect that the IT systems will be fixed in due course – I am very confident about that.

So overall I think Japan will come stronger out of these temporary issues.

Regarding the question of human issues vs technology on the Stock Exchange, I think both human issues and IT are important and both must be working well.

Copyright·©2013 ·Eurotechnology Japan KK·All Rights Reserved·

Categories
Internet Mobile

Cisco-VP: "In the future Internet business models will come from Japan"

In today’s Wallstreet Journal (Dec 7, 2004), Mike Volpi, Senior VP of CISCO’s routing technology group, is quoted as saying:

“In the past the internet business models, technologies and applications were all coming from the US, but today, through broadband, Japan is about to become the number one country in the area of Internet. In the future, I believe Internet business models will come from Japan.”

More about broadband and internet in Japan in our report: “Japan’s Telecommunication Industry” (pdf-file)

For the full article, see: “Fujitsu, Cisco plan to team up on routers” (Wallstreet Journal, Dec 7, 2004, subscription required)

CISCO announced to open an R&D Center in Japan in the first half of 2005: “Cisco Invests US $12 Million in Japanese R&D Center”.

Read an interview with Mike Volpi here: “Mike Volpi on Why Cisco is Investing in a New R&D Center in Tokyo, Japan”.

Categories
Internet M&A Mobile telecommunications

Cable & Wireless Japan acquired by Softbank???!!

Cable & Wireless Japan staged what it said was one of the first “hostile” takeovers in Japan, but then proved to be unable to manage the company they had acquired

by Gerhard Fasol

On October 26, 2004, Softbank announced the acquisition of Cable & Wireless IDC for YEN 12.3 billion (= US$ 110 million)

Cable & Wireless Japan: Today’s top article in Nikkei is about Cable and Wireless-Japan: the article reports that Cable and Wireless is in discussion with Softbank and a private equity firm to sell their Japan operations. Apparently this news article is not confirmed, and it already mentions a purchase prize on the order of US$ 100 million. This article appeared in the top position in Nikkei – but there are several things a bit mysterious about it.

Cable & Wireless Japan – why did they fail in Japan?

I did not follow Cable and Wireless recently in Japan, but it seems that C&W made a loss of YEN 61.6 OKU on sales of YEN 713 OKU, i.e. almost 10% loss.
Since we are insiders in Japan’s telecom sector, we know most of the details. To out it into short words, Cable & Wireless did not have the knowhow to manage a Japanese company. They tried but failed, and alienated a lot of people.

Spent all morning discussing with one of the innovation managers of a big European telco. Interesting. Spent afternoon with a US bio-tech company which which is thinking of asking us to build their business in Japan, and in the evening listened to a talk by Tadashi Onodera, the CEO of KDDI. Expected him to talk mainly about mobile – but he did not. His focus was a national VOIP network they are building, attacking the fixed line income of NTT. Got hold of him after his talk and discussed with him for about 10 minutes.

UPDATE: on October 26, 2004, Softbank announced the acquisition of Cable & Wireless IDC. Total cost of the acquistion is announced as YEN 12.3 billion (= US$ 110 million)

SoftBank today and 300 year vision report:

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Categories
Internet telecommunications

Wireless TeleMedicine – Technology Trends (presentation at the Zurich Stock Exchange)

Presentation by Gerhard Fasol at First Tuesday Zurich (5 May 2004, 15:15 – 21:30, Swiss Stock Exchange, Zurich, Switzerland)

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Categories
Economics Internet Mobile

M-Commerce in Japan

Presentation given by Gerhard Fasol, to the Asia/Pacific – Midwest Business Conference
Panel Presentation “E-commerce in Asia”, on Wednesday April 10, 2002, 8:00-9:30am, organized by the US Department of Commerce and the Illinois District Export Council.

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