USA
Today
 |
| Cellular phones are a fixture at the
Tokyo Stock Exchange, with its widespread electronic
connections necessary for instant updating fo prices and other
activity.
| TOKYO - Look around
this city for a minute, and a dozen people - all staring at their
mobile phone screens - come into focus.
Takoryo Horii,
26, an office assistant, reads the news headlines. Yurino Akamime,
19, taps short e-mails. Kouchi Kanda, 25, a waiter, kills time
looking for a better job on the Internet postings accessed via
phone.
"It’s
communication anytime, anywhere," Akamime said.
Japan loves
fads - 7-inch platform shoes, mechanical pets and Hello Kitty, to
name a few.
But after
lagging behind the United States by years in use of the Internet,
Japan leads in what could be the next big thing: the marriage of the
Internet with mobile devices, including phones.
Japan has more
Internet-enabled cellular phones than the rest of the world
combined, analysts estimate. Its wireless giant, NTT DoCoMo, boasts
the world’s largest Internet-cellular phone network. And Japanese
consumers are providing clues to the wireless world on what people
do with cellular phones.
"Everyone is
watching DoCoMo," said Takakuni Kuki, general manager of NEC’s
mobile network division.
More
specifically, everyone is watching DoCoMo’s i-mode service, which
launched last year. In just 16 months, 7.8 million subscribers have
signed on. (It took America Online at least five years to get that
many subscribers.)
I-mode stands
out internationally as the first to go mass market. "It is arguably
the first successful wireless data service in the world," said Ross
O’Brien, telecom analyst with Pyramid Research in Hong
Kong.
Outside the
train station in Shibuya, Tokyo’s hip district, nearly everyone
clasps a mobile phone. One-third of them are likely to be i-mode
phones.
For 21-year-old
waitress Rie Arai, i-mode is her only access to the Internet and
e-mail. "I cannot live without it," she said.
That surprises
even DoCoMo. It intended i-mode as more of a pilot project to test
future demand than anything else. But so many people subscribed that
"we saw we could make a viable business," said DoCoMo President
Keiji Tachi-kawa.
I-mode
success stunning
Merrill Lynch
in Tokyo expects i-mode revenue to hit $2 billion in fiscal 2000,
accounting for about 5 percent of DoCoMo’s revenue. DoCoMo’s stock,
even after the global technology rout this spring, has more than
tripled since i-mode’s launch.
In April,
i-mode had to stop advertising - to discourage new subscribers -
until its network could be beefed up to handle them.
Whether
i-mode’s success can be duplicated in other countries remains to be
seen.
Japanese have a
special affection for cellular phones. They decorate them with
stickers and knickknacks. Some even wear them around their
necks.
Consumers here
are also likely to:
 Have lower expectations for the Net.
Only about 15
percent of Japanese access the Net via PCs. So they aren’t as
accustomed to the big-screen experience as are Americans.
"Many people
look at little phones and say, ‘Thank you, but that is
not what I’m used to,’ " said Ted Darcie, vice president of wireless
research at AT&T Labs.
Sending e-mail
is especially challenging. A three-syllable word requires about 15
taps on the phone keypad.
Pay more for Net access via PCs and thus be open to other
options.
Japan’s
Internet costs, while decreasing, are high.
Just to get a
home telephone line costs $700. Internet access costs $20 a month
plus $2 per hour. (In the United States, unlimited access runs about
$20 a month.)
In contrast, it
can cost as little as $28 to get a cellular connection in Japan.
I-mode users pay for the amount of information received, not the
time spent online. The average i-mode bill runs $15 to $21 a month,
according to DoCoMo. On top of that, users pay their regular charges
to use the phone to make regular calls.
Suffer great inconveniences.
Most Japanese
banks and ATMs are closed at night and on weekends. That makes
online banking helpful. Most Tokyo streets lack names, so residents
fax maps to each other to give directions. With i-mode, maps can be
downloaded onto phones. There is no room to read newspapers on
packed commuter trains, but people can write e-mail or play video
games.
Love to be entertained.
Other than
e-mail, i-mode’s most popular service is the downloading of cartoon
characters to decorate phone screens.
Toymaker Bandai
charges 1 million people $1 a month for such cartoons - and DoCoMo
racks up revenue every time a cartoon is downloaded. "Japan has
these amazing followings that may not take off elsewhere," said
Curtis Sasaki, a director of product marketing for Sun Microsystems,
which is working to put Java on i-mode phones to improve data
delivery and security.
Business uses
are catching on, too. Sapporo beer messages sales people via i-mode
to alert them to customer calls. Tens of thousands of users forward
their office e-mail to their i-mode phones.
More in the
works
Microsoft and
DoCoMo recently started working on wireless software applications
for Japanese business users.
Getting other
companies interested in i-mode has been key to its success,
according to Tim Clark, Internet analyst with Web Connection in
Tokyo. About 15,000 Japanese Internet sites have been especially
designed for the i-mode network. Japan Airlines, for instance, sells
about 20,000 domestic tickets a month to i-mode users.
Video game
maker Hudson charges i-mode users $3 a month to download simple
video games. DoCoMo collects the $3 from the 30,000 subscribers as
part of the regular monthly cellular telephone bill and kicks 91
percent of it back to Hudson. That enables Hudson to sell cheap
services to a lot of consumers as opposed to expensive services to a
few.
"I-mode is a
small business with big potential," sales manager Haruhiko Ikeda
said.
Companies like
Hudson can easily offer i-mode content. The sites are written using
a version of HTML, the computer language that most Internet sites
are already written in.
Other Internet
cell phone networks decided several years ago to use WAP, or
Wireless Application Protocol. WAP translates HTML into content
geared for cellphone screens. But the Internet site supplying
content needs a WAP-
enabled server
to do so. Momentum is building behind WAP and more sites are coming
online every day, but content providers had been slow to do WAP
because there were few WAP phones while phone makers waited for more
content.
Eventual
convergence
Eventually,
i-mode and WAP standards may converge, Tachikawa said, and DoCoMo
will lose the early advantage.
That isn’t the
only challenge facing DoCoMo. The mobile Internet is all the rage.
Within six years, about 700 million people will reach the Internet
by mobile devices vs. 500 million by fixed-line devices like PCs,
estimated the London-based Ovum consulting company.
That’s why so
many companies, including Vodafone AirTouch, AT&T, Sonera Oyj of
Finland, Sprint PCS, Nokia, Vivendi of France and Motorola, are
pushing technologies and content that meld mobile devices and the
Internet.
DoCoMo, too,
hopes to expand its presence by sharing its i-mode expertise with
others. Not only does DoCoMo know how to run mobile networks, but it
has experience managing content, too, a rare combination.
So far, it has
taken a 19 percent stake in Hutchinson Telecom in Hong Kong, which
launched an i-model-like service in May. It also is buying a 15
percent stake in Dutch cellular operator KPN Communications. It
won’t comment on reports that it is negotiating deals with Canada’s
Telesystems International Wireless, South Korea’s SK Telecom and the
United States’ VoiceStream Wireless.
All of the
companies are preparing for the near future when wireless data
networks zip up to 200 times faster than they do now.
At a research
center near Tokyo, 700 DoCoMo engineers toil away at devices to make
use of that speed. The future, according to DoCoMo, is one in which
cars involved in accidents automatically inform insurance agents of
damages, kids wear devices that warn drivers that they’re crossing
the street and pets cannot get lost.
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