Overall Japanese mobile operators generate on the order of US$ 10 Billion/year in profits with a rising tendency.
US$ 10 Billion/year profits attract three new entrants to Japan’s mobile markets (eMobile, YAHOO-BB and IP-mobile), mobile virtual operators, and attracted Vodafone to acquire J-Phone some time ago.
DoCoMo’s domestic profits in particular have been continuously rising to reach the spectacular figure of US$ 8 billion/year recently. However, conspicuous is a US$ 10 billion hole (shown in bright red color in the figure below) in DoCoMo’s otherwise impeccable record. This US$ 10 billion losses are DoCoMo’s write-offs for investments in KPN-Mobile (Netherlands, Germany and Belgium), Three-Hudginson (UK) and AT&T-Wireless (US). DoCoMo has withdrawn from all three investments and has written off about US$ 10 billion. Most companies on planet earth will not survive a US$ 10 billion write-off – however, DoCoMo’s incredible domestic performance allowed DoCoMo to survive this US$ 10 billion write-off without much trouble.
Vodafone’s performance in Japan is rather mixed – the results show a zig-zag line with profits one year and losses the next and average profits around zero, if performance is averaged over several years.
Net income of Japan’s mobile operators showing NTT-DoCoMo’s losses on international investments in red
Japan’s cellphone market continues to grow by more than 4.5 million subscriptions/year
DoCoMo and KDDI are continuing their head-to-head race
Since June 2005 Vodafone is consistently gaining customers again (but losing market share)
Willcom’s turn-round is continuing, and Willcom is consistently gaining market share. Willcom is outperforming Vodafone as far as gaining new subscribers is concerned
Month-by-month gain/loss for 2005:
Annual subscriber growth for 2001-2005 shows DoCoMo’s and KDDI’s head-to-head race, Willcom’s turn-round and Vodafone’s difficulties to apply GSM-style management to Japan:
Month-by-month growth during 2005 shows that KDDI is moving TuKa customers to AU. (TuKa uses a legacy PDC network – a technology developed by KDDI’s competitor NTT, while AU uses Qualcomm’s CDMA2000):
Japan’s mobile internet is a growth market with about 0.5 Million new subscriptions/month – Japan’s mobile internet grows by about one Finland per year, and even more in terms of ARPU!
Vodafone’s subscriber numbers on the other hand have been more or less stable around zero growth.
Growth of mobile internet subscriptions for DoCoMo’s i-Mode and KDDI’s EZweb combined stabilizes at 0.5 million/month, while Jsky stopped growing after acquisition by Vodafone and renaming to Vodafone-Live!
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.
KDDI – Japan’s second largest telecom operator – streamlines the group
KDDI’s AU with TuKa acquires 3.5 million additional subscribers
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.
Learn about KDDI and AU, Japan’s No. 2 telecom operator
Report on “KDDI, AU and UQ Communications: pioneers of mobile music and flat data rates, analysis report” (approx 200 pages, pdf file)
Six years into the wireless internet revolution which started February 1999 in Japan
Docomo’s and KDDI’s latest wireless innovation, concept mobile phones, mobile payments
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:
VOIP – 3G
fixed line – wLAN integration
first push-to-talk (PTT) appearance in Japan – will PTT arrive in Japan?
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:
EZ-Felica: RFID payments for KDDI’s AU mobile 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.
“TownPocket”: information terminals linking RFID equipped phones to local area informationEZ-FeliCa: RFID mobile payment gates for KDD-AU mobile phonesTownpocket RFID check-in point
Popularity of DoCoMo’s 901iS series accelerates DoCoMo’s transition to 3G.
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:
Fuel cells for KDDI phones: fuel cell demonstrations for mobile phones have been demonstrated for many years at trade shows in Japan, but they have not made it to the market yet
Hitachi shows a prototype future generation phone with:
Futuristic concept phones are a tradition at the Wireless Japan show. The following images show multi-media concept phones:
Concept phone models
This flask-stile multimedia presenter shows images on flake-like suspended displays. Presentation of particular images helps to create the mood of the moment:
Concepts
Media phone:
Concept 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.
First presentations by new market entrant “em” eMobileFirst presentation by new entrant eMobile “em”New entrant eMobile
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:
KDDI demonstration: mobile phone as a remote control for robotsKDDI presents mobile phones as controllers for robotsMobile phones control robotsMobile phones control robots
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.
Learn more: report on Japan’s telecom sector (269 pages, pdf file):
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):
Infrastructure investments (capex) by Japan’s mobile phone operators – Vodafone’s investments were systematically reduced and are by far the lowest of Japan’s three large operators
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).
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:
Vodafone announced a new method to calculate numbers. Without this new way of calculating, Vodafone’s loss would have been: -58,400
Net growth (loss) of subscribers per month for Japan’s mobile operators – Vodafone drops into the red, losing subscribers despite a new way of counting them
Net growth (loss) of mobile internet subscribers (i-Mode, EZweb and Vodafone Live!): since Vodafone renamed Jsky to Vodafone Live!, its rapidly losing market share
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:
Subscriber net growth/loss for Japan’s mobile phone and PHS operators
Ringing tones and mobile music are pioneered in Japan
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:
KDDI sells approximately as many chaku-uta music clips as iTunes sells music globally demonstrating the enormous size of Japan’s mobile music market
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):
Sales, net income and market cap for docomo, KDDI and Vodafone for the financial year 2004
More Chaku-Uta mobile music downloads by KDDI in Japan than by Apple’s iTunes globally
Turns out that music is a killer application on mobile – we are working on a number of projects in the mobile music field. We just completed our “Mobile Music Japan” report.
With an incredibly much smaller potential customer base KDDI/AU delivered more downloads of 20-30 second songs (chaku-uta) than Apple’s i-Tunes. Motorola reportedly announced a mobile phone incorporating i-Tunes at the recent CES show in Las Vegas. KDDI/AU‘s tremendous success with chaku-uta indicates that combining Motorola phones with i-Tunes will be very successfull indeed. AU reported 1 million Chaku-Uta-Full downloads within the first 48 days of service (chaku-uta-full started on November 19, 2004).
Marc Newson designed Talby concept phone for Japan’s mobile operator KDDI – au
On 13 October 2004, KDDI/AU announced “talby”, the third phone in their “AU design series”. Volume sales start in December 2004. We expect that “talby” will be similarly successful as “infobar” one year ago.
“talby” is a fully featured 3G phone with camera (640×480 pixel), QVGA display, EZappli/BREW, Chaku-uta, email, EZweb, PIM, GPS/EZnaviwalk,…
Softbank is rapidly becoming the third universal telco in Japan, targeting NTT’s most important income streams. KDDI of course is also targeting NTT’s fixed line income.
On November 2, 2004, NTT announced plans to compete: NTT will invest 5 Chou YEN (YEN 5000 Billion = US$ 45 Billion) over 6 years (2005-2010), i.e. about US$ 7.5 Billion/year. 60% of this investment will be for optical IP networks. NTT plans to build about 30 million FTTH lines.
80% of KDDI/AU users are now converted to 3G, and KDDI/AU does not sell any 2G phones any more: only 3G and 3.5G (2.4Mbps data download).
Conversion to 3G in Japan: AU leads, DoCoMo and Vodafone follow. Vodafone’s 3G conversion has stalled because of lack or attractive handsets in Japan and too low investment in 3G base stations
Here is KDDI/AU‘s newest 3.5G phone – the W21SA, for 2.4Mbps data download:
FeliCa mobile payment wallet phones at the centre of attention
by Gerhard Fasol
Wireless, mobile phone industry trends years before they reach outside Japan
Every year the Wireless Japan sets global trends in wireless communications and mobile phones. Mobile phone industry professionals cannot afford to miss this trend setting show. It is here that Japanese carriers and handset makers introduce their latest products and show design studies and concept phones which set industry trends for the next months and years.
There were some surprises: In recent Wireless-Japan shows usually the KDDI/AU-design project prototypes were at the center of attention – this year I could not find any. For example, at Wireless-Japan-2002, KDDI/AU showed “Infobar” prototypes a full 16 months before market introduction. Did KDDI/AU decide to keep future design-project releases secret until they hit the market? Could well be so, given Japan’s increasingly ferocious mobile phone competition. Another surprise was Vodafone’s absence – Vodafone in recent years used to have the biggest show.
On the other hand this time most handset makers showed impressive concept phones, Matsushita/Panasonic under the heading “Beyond 3G”. The image shows NEC’s concept design study of a flexible multimedia phone: this phone has two screens which can be bent together, and used jointly as a larger screen.
Wireless Japan 2004 Highlights: “Beyond 3G”
Beyond 3G: SANYO 3.5G phone for 2.4Mbps data download (for KDDI/AU):
KDDI/AU 3G phone W21SASANYO show at Wireless Japan 2004
Wireless Japan 2004: NEC “tag” wrapping multimedia design concept phone:
Concept model phone by NEC at WirelessJapan-2004 exhibition
“Wireless Japan 2004” – much was expected: for example, it wasn’t surprising for anyone that DoCoMo’s i-Mode-FeliCa wallet-phones were center stage of the DoCoMo exhibit with lots of partners demoing wallet-phone applications.
NEC concept phoneNEC concept phone
Matsushita/Panasonic “Beyond 3G” design concepts:
Panasonic concept phone
DoCoMo UbiButton and UbiChip:
DoCoMo’s UbiButton and UbiChip
DoCoMo i-Mode-FeliCa wallet phones – for electronic cash:
the world’s first commercial wallet phone: P506iC – by DoCoMo and Panasonic
DoCoMo i-Mode-FeliCa wallet phones – as an electronic door key:
Mobile phone as a RFID key to lock and unlock doors
We have substantial documentation about the Wireless Japan 2004 exhibition, and most other year’s Wireless Japan exhibitions. If you need information or documentation for prior art or other investigations, please contact us.
Learn more: report on Japan’s telecom sector (269 pages, pdf file):
Docomo’s first 3G phones, KDDI brings design to mobile phones
The annual Wireless-Japan exhibition highlights the trends of mobile communications in Japan. At Wireless-Japan 2002 KDDI started setting the trend of concept phones.
KDDI/AU “Design Project:” Design study for the bestselling “INFOBAR”.
KDDI/AU design series prototypeKDDI/AU design series prototypeKDDI/AU design series prototypeKDDI/AU design series prototypeKDDI/AU design series prototypeKDDI/AU design series prototypeKDDI/AU design series prototypeKDDI/AU design series prototype
The KDDI/AU design study above became the origin of the bestselling “INFOBAR”-3G phone.
And here are two images of the bestselling “INFOBAR”-phone in the version sold by KDDI.
KDDI/AU design series – Infobar
Design study by AU/KDDI for future mobile handsets. This design study was the basis for the PENCK model sold by KDDI/AU at a later date.
KDDI/AU design series prototype: PENCK
Big Blue Vending machine for mobile internet usage by IBM
IBM vending machines for mobile payment
Combined mobile phone and television receiver by DoCoMo:
Automatic Teller Machine (ATM) linked to mobile phones by DoCoMo gradually DoCoMo is introducing payment applications to mobile phones. In 2004, two years later, DoCoMo introduces the walletphone.
IY Bank (later renamed 7-Bank) ATM protoype
Karaoke Machine linked to mobile phones by DoCoMo
Linking Karaoke to mobile phones
FOMA video telephone and MOPPET fixed line video telephony terminal, allows video conversation between FOMA mobile phone and fixed line telephone.
More information about 3G in Japan and FOMA: www.eurotechnology.com/3G/.
NTT Moppet
SH2101V handheld PC and video camera for FOMA (3G) use, including video camera
DoCoMo 3G prototype multi-media phone SH2101V
We have substantial documentation about the Wireless Japan 2002 exhibition, and most other year’s Wireless Japan exhibitions. If you need information or documentation for prior art or other investigations, please contact us.
Learn more: report on Japan’s telecom sector (269 pages, pdf file):
