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Galapagos effect mobile payment

ApplePay vs Osaifu-Keitai – CNBC interview

ApplePay is expected to start in October 2014 – Docomo’s Osaifu-keitai wallet phones started on July 10, 2004.

https://www.cnbc.com/video/2014/09/16/why-apple-pay-isnt-as-revolutionary-as-it-seems.html

Mobile payments Japan, e-money and mobile credit (200 pages, pdf file)

In business the first-comer does not always win the game

Japan’s NTT-Docomo tested two types of wallet phones, manufactured by Panasonic and SONY with 5000 customers between December 2003 and June 2004, and introduced mobile payments and wallet phones on July 10, 2004 – over 10 years ago.

ApplePay therefore could be developed based on over 10 years of experience with mobile payments in Japan. ApplePay is expected to be introduced for the USA market in October 2014, and we can expect Apple to introduce ApplePay to other markets including Japan in due course.

It will be particularly interesting to see how ApplePay and the already established mobile payment and NFC payment ecosystems in Japan will integrate.

For detailed analysis read our reports:

Mobile payment Japan, e-money and mobile credit report:

Copyright (c) 2014 Eurotechnology Japan KK All Rights Reserved

Categories
Galapagos effect Japan's electronics multinationals University

Steve Jobs and SONY: why do Steven Jobs and SONY reach opposite answers to the same question: what to do with history?

Steve Jobs and SONY: why 180 degrees opposite decisions?

Steve Jobs donates history to Stanford University in order to focus on the future

Steve Jobs and SONY – when Steve Jobs when returned to Apple in 1996, and now SONY are faced with the same question: what to do about corporate archives and the corporate history museum? Interestingly Steve Jobs, and SONY reach exactly 180 degrees opposite answers to the same question:

  • Steve Jobs donates Apple corporate archives and company museum to Stanford University
  • SONY sells headquarters building, and keeps SONY corporate archives and company museum

Why opposite answers to the same question? Could it be good advice for SONY, to learn from Steve Jobs, and donate SONY-Museum and SONY-Archives to a University, and focus much more on the future?

Apple donates history collection to Stanford University:

Steve Jobs returned to Apple with the Apple purchase of NeXT on December 10, 1996. One of the first things Steve Jobs did was to orient the Apple into the future by donating the Apple Computer Inc. Museum and historical collections to Stanford University, as documented in Stanford University’s news release dated November 18, 1997. Apple’s archives are now at Stanford University’s Silicon Valley Archives.

Steve Jobs gave away Apple’s history documents in order to focus on the future.

SONY sells headquarters buildings but keeps SONY Archives and SONY Corporate History Museum:

SONY’s actions are almost exactly 180 degrees opposite to Apple’s and Steve Jobs’: according to Wallstreet Journal, The Japan News by Yomiuri, and other news sources, SONY sells the former headquarters buildings, but reports say that SONY will keep the SONY Archives and the SONY Corporate History Museum (ソニー歴史資料館).

To understand SONY’s financial situation over the last 15 years, read our Report on Japan’s electronics industry.

Why does Steve Jobs reach the 180 degrees opposite conclusion to SONY management when faced with the same question?

  • Is this a manifestation of Japan’s “Galapagos syndrome”?
  • Could this mean that SONY isn’t as forward looking as Steve Jobs when he returned to Apple in 1996?
  • Could it be good advice for SONY, to donate SONY-Museum and SONY-Archives to a University, and instead focus on the future?

Japan’s electronics industry sector – research report, including SONY

Copyright 2014 Eurotechnology Japan KK All Rights Reserved

Categories
Mobile

SIM free iPhone Japan: officially on sale by Apple in the online Apple store

SIM free iphone japan finally arrive in Japan – directly sold by Apple.

SIM-lock free iPhone 5s and iPhone 5c are now officially sold via the Japanese section of the official Apple.com webstore.

It has been official policy recommendation (not regulation) by Japan’s General Affairs Ministry (総務省) for Japan’s mobile operators to sell SIM-free mobile phones, or to remove the SIM-lock of phones when requested by customers. However, Japan’s mobile operators have been very shy to follow the Ministry’s recommendation, and particularly Japan’s operators did not follow this recommendation for the iPhone.

Apple has now taken the step to offer SIM-free iPhones (model 5s and 5c) officially via the apple.com webstore in Japan.

This is a further step on the way of disruptive innovation sweeping through Japan’s mobile phone sector, which evolved from NTT monopoly and leased phones, via step-wise liberalization, entry of newcomers, and now domination by three groups NTT-DoCoMo, KDDI/AU and Softbank.

SIM-free iPhone sales in Japan- What will be the implications?

  • For customers, it will be much easier now to switch operators in Japan under the Mobile Number Portability (MNP) program keeping their iPhone. It will be seen, whether operators follow up with their number portability procedures to include the iPhone, which was not the case until recently.
  • For customers, roaming and international travel will be easier, customers will be able to use their Japan-bought SIM-free iPhone on foreign networks inserting local foreign operators’ SIM cards. Japanese operators might lose some limited amount of roaming income (which has never been very high, unlike in Europe).
  • For operators, churn under the Number Portability Program is likely to increase, increasing competitive pressure on operators to differentiate via radio connectivity, customer service, and innovative services.

How to get and use a SIM-free iPhone in Japan?

We have not yet done this ourselves, but what we hear is:

  1. Buy a SIM-free iPhone from the Apple online Apple-store (apparently SIM-free iPhones are not available from operator stores or physical Apple stores). Take care, the models may differ depending on which operator you want to use the iPhone on, i.e. Docomo or KDDI/AU or Softbank. Better check with the operator about prices and conditions before you purchase the SIM-free iPhone, just to be sure.
  2. Take the iPhone to a mobile operator store (i.e. Docomo, KDDI/AU or Softbank, depending on which type of iPhone you have bought), subscribe for service and get a SIM-card for the iPhone.
  3. There are also some mobile virtual operators (MVOs) in Japan, i.e. operators which purchase capacity from Docomo, Softbank or KDDI, and then retail this capacity to end users. Check their conditions, service speed, bandwidth etc before you buy.

Report on Japan’s telecommunications industry

Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

Categories
Japan's electronics multinationals Mobile

Apple-Samsung Patent War and Impact on Japans Industries (talk at Foreign Correspondents Club Tokyo on Oct 2, 2012)

PROFESSIONAL LUNCHEON

“Apple-Samsung Patent War and Impact on Japans Industries”
Speaker: Gerhard Fasol
Tuesday, October 2, 2012
12:00-13:30
Foreign Correspondents Club Japan (FCCJ), Yurakucho

Outline: In a global war to dominate the smartphone market, Samsung and Apple have been at each other’s throats, playing out the war in courts around the world and accusing each other of patent violations. A California court recently ruled in favour of Apple and ordered Samsung to pay $1 billion, a figure that could rise dramatically when the case is played out. Samsung has won minor battles in the U.K., Japan and Australia, but with new mobile phone models and tablets being introduced by both firms, the war is only going to get bigger and bloodier. In Japan local manufacturers are being marginalized and even fighting for survival.

Japan-based expert Gerhard Fasol will return to the FCCJ (for “FCCJ: Fasol & Matsumoto, The iPhone And Japan’s Mobile Phone Industry”, report of Fasol’s talk with Softbank Mobile CTO Tetsuzo Matsumoto at the first iPhone landing in Japan) to shed light on the Apple-Samsung dispute and how it impacts the Japan market, Japan operators and Japan manufacturers.

Gerhard Fasol runs Japan’s Eurotechnology K.K. consultancy (www.eurotechnology.com), has advised the president of Germany, JETRO and number of Japanese companies involved in high-tech industries and has authored Japanese patent applications. Fasol, who has written a number of books, graduated with a PhD in Physics from Cambridge University and was a tenured professor at Cambridge’s Cavendish Laboratory, a research scientist at the Max Planck Institute for Solid States Sciences in Germany, a manager of one of Hitachi’s R&D labs and was Director of Studies at Trinity College, Cambridge.

Read our report on Japan’s Telecom landscape

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

Categories
games Japan's electronics multinationals

Apple Nintendo Sony: The power of focus

Lets benchmark three iconic companies:

Apple Nintendo Sony

Apple Nintendo Sony: three iconic companies evolving along very different paths. Apple’s current physical products famously all fit onto a single mid-sized table. Nintendo’s current physical products as well, for SONY you’d need a warehouse.

  • APPLE: Wednesday October 22 APPLE announced spectacular full-year results with a year-on-year net income increase of 38%. The results are even better than they look, because iPhone sales and income are spread forward over 2 years due to accounting rules. (See our comments on CNBC here)
  • NINTENDO: on August 29, 2008 Nintendo revised the forecast for full-year net income upward by +26.2% (See our comments on CNBC here)
  • SONY: in contrast, on October 23, 2008, SONY said that full-year net income (for the financial year ending March 2009) is expected to be 37.5% lower than previously predicted (see our comments on SONY’s 1Q results here on CNBC)

Apple Nintendo Sony – Lets look at today’s market caps:

  • APPLE market cap = US$ 85.6 Billion (about 4 x SONY)
  • NINTENDO market cap = US$ 37.2 Billion (about 2 x SONY)
  • SONY market cap = US$ 19.9 Billion

Apple Nintendo Sony – Why this dramatic difference in market caps? We believe its focus.

Apple and Nintendo are companies with clear focus. Lets look at the details below:

Comparing revenues (sales):

SONY = 3 x APPLE
SONY = 4 x NINTENDO

Annual revenues of Apple, Nintendo and SONY
Annual revenues of Apple, Nintendo and SONY

Comparing annual operating income:

APPLE = 3 x SONY
NINTENDO = 3 x SONY

Operating income of Apple, Nintendo and SONY
Operating income of Apple, Nintendo and SONY

Comparing operating margin:

APPLE = 9 x SONY
NINTENDO = 15 x SONY

Operating margin (operating income as a ratio of revenues) for Apple, Nintendo and SONY
Operating margin (operating income as a ratio of revenues) for Apple, Nintendo and SONY

Read our report on Japan’s electronics industry sector

Japan electronics industries – mono zukuri

Copyright (c) 2008-2013 Eurotechnology Japan KK All Rights Reserved

Categories
games Japan's electronics multinationals

Today’s APPLE 4th quarter results vs NINTENDO

A few hours ago (Oct 22, 2008, 6am Tokyo Time) APPLE announced 4th Quarter and Full Year results – we are here updating our comparison between APPLE and NINTENDO. With 6.9 million iPhones sold in APPLE’s 4th Quarter (July + August + September 2008), APPLE has achieved 2.76% market share of all mobile phones globally.

APPLE strongly accelerates lead over NINTENDO in term of sales (see figure below) – even more dramatically, if we take into account that the iPhone in 4th Quarter now accounts for 39% of APPLE’s sales. APPLE accounts for iPhone sales in terms of a subscription model over two years because of free software updates for iPhones. If we would use APPLE’s non-GAAP figures, which book iPhone sales fully at the point of sale, then APPLE’s sales lead over NINTENDO would be even stronger.

In terms of margins we see the opposite trend: NINTENDO‘s lead over APPLE in terms of higher margins expands (see below).

Watch our interview about APPLE’s 4Q results today 11:50am (Tokyo time) on CNBC as a video clip.

Apple accelerated lead over Nintendo in terms of revenues.

Apple’s lead would be more dramatic if correcting for Apple’s subscription model used for iPhone sales according to GAAP rules.

Annual revenues, operating income and net income of Apple vs SONY
Annual revenues, operating income and net income of Apple vs SONY

While Apple’s lead over Nintendo in terms of sales is growing, Nintendo’s lead in terms of operating margins is expanding.

Operating margins: Apple vs Nintendo
Operating margins: Apple vs Nintendo

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

Categories
Japan's electronics multinationals

Tech Sector Outlook (CNBC TV interview)

More in our J-ELECTRIC report: http://www.eurotechnology.com/store/j_electric/

Copyright (c) 2013 Eurotechnology Japan KK All Rights Reserved

Categories
Mobile

iPhone in Japan – in the press

Here some articles about the panel discussion at the Foreign Correspondents’ Club of Japan on the topic “Will The iPhone Trigger A Turning Point In Japan’s Mobile Phone Industry?”

Apple iPhone is having success in Japan against local internet mobiles (The Australian)

The iPhone’s impact in Japan (BusinessWeek)

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

Categories
Mobile

Will the iPhone trigger a turning point in Japan’s mobile phone industry?

Tetsuzo Matsumoto (Senior Executive Vice-President and Board Member of SOFTBANK MOBILE Corporation),
Gerhard Fasol (CEO, Eurotechnology Japan KK)
and
Dennis Normile (Japan Correspondent of SCIENCE Magazine, and FCCJ)
discuss about the future of Japan’s mobile phone market.

“Will the iPhone trigger a turning point in Japan’s mobile phone industry?”
(Foreign Correspondents’ Club of Japan, Tokyo Wednesday, August 13, 2008, 12:00-14:00)

(Photo: Copyright Foreign Correspondents’ Club of Japan, used with permission)

Left to right: Gerhard Fasol (Eurotechnology Japan), Tetsuzo Matsumoto (VP SoftBank-Mobile) and Dennis Normile discuss the iPhone market entry to Japan
Left to right: Gerhard Fasol (Eurotechnology Japan), Tetsuzo Matsumoto (VP SoftBank-Mobile) and Dennis Normile discuss the iPhone market entry to Japan

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

Categories
Mobile

Market caps of companies in mobile: global vs local

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.

Market caps of Japan's telecom operators compared to global telecom and internet companies
Market caps of Japan’s telecom operators compared to global telecom and internet companies

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.

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

Categories
Mobile

iPhone for Japan? iTunes/iPod phones?

There is a lot of discussions about whether Steve jobs is going to announce an iPhone or iPod-Phone at the Apple Computer Developer’s Conference in SF – according to the headline report on Saturday May 13th, 2006 in Nihon Keizai Shinbun ( the world’s largest business daily ) it’s already known since May this year that Apple and SoftBank are developing such a joint mobile phone with iPod and iTunes functions.

On March 17 SoftBank announced the full acquisition of Vodafone’s Japan subsidiary – the former J-Phone –  jointly with YAHOO-Japan as a co-investor – so with about 15 million mobile subscribers in the world’s most advanced mobile market (Japan), SoftBank/Apple will have the firepower to make such a phone a success, provided it’s tuned to Japanese consumers’ needs and dreams – my guess is that it probably will be.

By pure coincidence, the Apple/SoftBank headlines appeared one or two days after DoCoMo and Microsoft announced a music cooperation.

Apple/SoftBank iPod mobile phones coupled to iTunes could have quite a lot of impact on Japan’s music industry: about 20% of Japan’s music sales are to mobile phones. Of all music downloads in Japan about 6% are fixed line internet downloads, and 94% are music downloads to mobile phones: internet music downloads are almost neglibile in comparison to mobile phone music downloads.

Therefore even if iTunes has a huge market share in the fixed line internet world, iTunes  cannot have much impact in Japan overall if limited to fixed line  internet downloads. iTunes downloads to mobile phones will change the business models of Japan’s music industry – at the moment music downloads to mobile phones cost a lot more than iTunes downloads. An iPod/iTunes music store could reshape the mobile music market in Japan.

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

Categories
Mobile

SoftBank a small fry, writes BusinessWeek …. really??

Comparing Apple and SoftBank

Is SoftBank really smaller than Apple Computer?

In my 20 years of business and work between US/Japan and EU/Japan, I am often surprised how Western executives underestimate economic size and strength of Japan and it’s companies – here is another example:
BusinessWeek writes about the SoftBank/iPod phone, and writes that former Apple executives says that Apple’s CEO Steve Jobs wouldn’t normally tie up with a “small fry” like SoftBank

Is SoftBank really a small fry? Let’s check it out:

SoftBank a small fry? Apple vs SoftBank revenues

Softbank + Softbank-Mobile (former Vodafone KK) combined have substantially higher revenues than Apple Computer for financial years 2005 and 2006 - so clearly Softbank is no 'small fry' at all compared to Apple Computer
Softbank + Softbank-Mobile (former Vodafone KK) combined have substantially higher revenues than Apple Computer for financial years 2005 and 2006 – so clearly Softbank is no ‘small fry’ at all compared to Apple Computer

Revenues of SoftBank + SoftBank Mobile (x-Vodafone KK) were on the order of YEN 2500 Billion (US$ 22 Billion) for the financial year that ended March 31, 2006.
Revenues of Apple Computer were US$ 13.9 Billion for the year ended Sept 24, 2005. – So in terms of revenue the new SoftBank Group (including the recently acquired x-Vodafone KK) is almost twice as large as Apple Computer.

SoftBank a small fry? Apple vs SoftBank market capitalization

On May 19, 2006, market cap of SoftBank and SoftBank Mobile combined was about 20% less than Apple's market cap
On May 19, 2006, market cap of SoftBank and SoftBank Mobile combined was about 20% less than Apple’s market cap

Market capitalization of Apple Computer was US$ 54.9 Billion on May 19, 2006. Market capitalization of SoftBank (US$ 28 Billion) plus SoftBank Mobile Corp (US$ 15 Billion) was on the order of US$ 43 Billion.

BusinessWeek took note of my letter and published a correction on May 21, 2006, which you can find here and here.

More about Japan’s telecom industry sector in our JCOMM-Report
More about Softbank in our Softbank report

Note added on August 13, 2008:

When the iPhone was actually introduced to Japan by SoftBank in 2008, Mr Tetsuzo Matsumoto, CTO and Board Member of SoftBank-Mobile and myself were invited by the Foreign Correspondents Club to hold a Press Conference to comment on the iPhone introduction to Japan – you can find the records here.

SoftBank today and 300 year vision report:

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Categories
Mobile

SoftBank turnaround program for Vodafone-Japan

SoftBank acquires Vodafone’s Japan operations, announces turnaround strategy

SoftBank turnaround for Vodafone-Japan: Focus on customer service and increased investments

by Gerhard Fasol

SoftBank has acquired Vodafone-Japan (Vodafone KK) and will change the name to SoftBank Mobile.

SoftBank‘s alliance with APPLE to develop iPod-mobile phones is the latest in a string of actions to take the former J-Phone back onto the growth track before Vodafone acquired it. One day after announcing the acquisition, SoftBank announced a target of 26 million subscribers (compared to today’s 15 million).

SoftBank turnaround: five point strategy to turn around Vodafone-Japan

A few days after acquiring Vodafone-Japan, SoftBank announced a five point SoftBank turnaround program for Vodafone Japan, which is now well on-track:

1. Continued use of mail addresses:

SoftBank has learnt from Vodafone that it does not pay to force 15 million subscribers and all their friends and acquaintances to change email addresses …

2. Strengthen the shops and customer service:

SoftBank is reversing Vodafone’s store strategy – SoftBank has started to recruit full-time regular employees for it’s stores, and plans to sell APPLE products and iPod phones in the stores.

3. Rebranding – Change to an easy-to-understand and familiar company name:

The brand “Vodafone” will be replaced by SoftBank Mobile.

4. Stepping up capital investment:

On Friday April 21, 2006, SoftBank announced the decision to increase the investments to YEN 250 billion to increase the number of 3G base stations from 20,000 to 30,000. This is a reversal of Vodafone’s initial strategy to dramatically cut investments in Japan during it’s ownership of J-Phone/Vodafone KK (for graphics of investment data by Japan’s operators see our blog)

5. Synergies with SoftBank BB, Japan Telecom and YAHOO:

Softbank now reunites the former Japan Telecom – which Softbank has acquired in two steps from Vodafone. First Vodafone acquired the fixed line operations via Ripplewood and now the former mobile subsidiary of Japan Telecom from Vodafone. Synergies between YAHOO-Japan and SoftBank’s new mobile operations are particularly interesting and promising – think mobile auctions… now SoftBank is moving further into eBay’s territory in Japan, or what is eBay’s territory anywhere else in the world, except in Japan.

More details: JCOMM report

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

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

Copyright 1997-2013 Eurotechnology Japan KK All Rights Reserved

Categories
Mobile

iPod mobile phones for Japan?

According the headline report in Nihon Keizai Shinbun (the world’s largest business daily) on Saturday May 13th, Apple’s CEO Steve Jobs and SoftBank’s Chairman Masayoshi Son met recently, and are developing a joint mobile phone with iPod and iTunes functions.

On March 17 SoftBank announced the full acquisition of Vodafone’s Japan subsidiary – the former J-Phone. Thus SoftBank has acquired a 20% piece of the global Vodafone-Group, propelling SoftBank into the global top-league of telecom players. Within a few days SoftBank announced a string of actions to bring the former J-Phone back onto it’s former growth track. Read below – and read a detailed analysis of the APPLE/SoftBank cooperation in today’s May 15 version of our Mobile Music report.

Is it pure coincidence that DoCoMo and Microsoft announced a music cooperation just one or two days before the APPLE/SoftBank iPod cooperation made headlines?

Apple/SoftBank iPod mobile phones have the potential to:

  • revolutionize Japan’s mobile phone market
  • accelerate the shift of the music industry’s business model from CDROM sales to mobile music for mobile phones
  • make APPLE a global mobile phone handset brand in the NOKIA league
  • put pressure on DoCoMo which has been falling behind in the mobile music sector
  • enable Vodafone to offer Softbank/APPLE/Vodafone/iPod phones globally via Vodafone’s recently announced Softbank joint venture for handset development

Implications of an Apple/SoftBank iPod mobile phone

  • Revolutionize Japan’s music business landscape: about 20% of Japan’s music sales are to mobile phones, while internet music downloads are almost neglibile in comparison. Therefore iTunes cannot have much impact in Japan if limited to internet downloads. iTunes downloads to mobile phones will change the business models of Japan’s music industry.

    • SoftBank could leapfrog DoCoMo which is already about 1-2 years behind KDDI/AU in the mobile music arena.
    • iTunes pricing is far below established mobile phone music prices in Japan
  • Pressure on DoCoMo and KDDI/AU: Success of an iTunes/SoftBank mobile phone will put strong pressure on DoCoMo and KDDI/AU: a “must have” iPod mobile phone can be a huge advantage for SoftBank when number portability arrives this autumn.
  • Global impact: Success of an APPLE/SoftBank phone could put APPLE on track towards a global mobile phone brand competing with the NOKIA’s of this world
  • Impact on Apple: APPLE could leverage it’s design power, it’s user interface principles, and brand power into BOTH the mobile phone space (globally), and the mobile music distribution space
  • Impact on global mobile phone business landscape: APPLE could become the challenger in the global mobile phone handset landscape

download latest version of our Mobile Music Japan report (includes analysis of iPod/SoftBank phones)

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