japan case study: mobile 2.0 and the next generation of mobile applications
DESCRIPTION
A presentation overview of the Japanese mobile industry given in December 2007 at Mobile Monday Indonesia in Jakarta.TRANSCRIPT
© 2007 Infinita Inc.
Japan Case StudyMobile 2.0 and the Next Generation of Mobile Applications
Christopher Billich, Infinita Inc.
Mobile Monday Indonesia Launch
Jakarta, December 4, 2007
© 2007 Infinita Inc.
100,000,000,000,000
© 2007 Infinita Inc.
...Mobile Page Views per monthin Japan!
Source: NTT DoCoMo/Infinita
© 2007 Infinita Inc.
40% of Mobile Data RevenuesWorldwide
Source: Chetan Sharma Consulting, 2006
© 2007 Infinita Inc.
Japan Mobile Market: Key DifferencesThe Secret Sauce
Email, not SMS
Operators control
handset makers
Open Standards
Operator Revenue
Share favors CPs
Same cost for On- and
Off-Deck access
All handsets
SIM-locked
“Free” Messaging
Competition on Network Technologies
80% 3G penetration
Operators pay
handsetmakers
★ Regulatory/Government Level
★ Operator Business Model Level
★ Operator-Handset Maker Relationship Level
★ User Experience Level
No spectrum license costs
© 2007 Infinita Inc.
Traditional i-Mode Ecosystem
MobileOperator
Handsets
Volume Opportunity
Interoperability Interoperability
Content/Handset Integration
Business Opportunity Portal Functionality
HandsetVendors
PlatformVendors
ContentProviders
Content
RevenueCollection
© 2007 Infinita Inc.
Subscribers by Network Technology2004-2008 (est.), in million
Content
Source: Impress R&D
Voice only 2G Data Users3G Data Users Non-Flat 3G Data Users Flat Rate3.5G Data Users
© 2007 Infinita Inc.
CarriersMarket Share Mobile Subscribers (Total)
Source: Telecommunications Carriers Association of Japan
NTT DoCoMoau KDDISoftbank Mobile
Total mobile penetration: 77.8%
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CarriersSubscribers (Net Additions): Softbank winning for 6 months straight
Source: Telecommunications Carriers Association of Japan
NTT DoCoMoau KDDISoftBank Mobile
MNP
SBM White Plan
SpringHandsets
New DoCoMoDiscount Plans
© 2007 Infinita Inc.
ARPUPressure on Voice ARPU - High Data ARPU ratio (JPY)
Source: Japan Ministry of Internal Affairs and Communications
0
1,500
3,000
4,500
6,000
7,500
9,000
FY2001 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 Q1
4,3504,4404,6704,9025,2635,7666,245
6,889
2,0802,1201,9921,8671,7401,8051,6071,346
Data ARPUVoice ARPU
DoCoMo au
© 2007 Infinita Inc.
HandsetsManufacturers Market Share 2002-2007
0
6.25
12.50
18.75
25.00
2002 2003 2004 2005 2006 2007
Sharp NEC Panasonic Toshiba SanyoSonyEriccson Fujitsu Kyocera Mitsubishi Casio
Source: Nikkei BP Consulting
© 2007 Infinita Inc.
HandsetsKey Facts
Source: CIAJ, July 2007; JEITA, October 2007
★ 70% of users replaced handset in past 10 months
★ JPY 8,000 average purchase price (heavy subsidies!)
★ 90% of users are “fine with current pricing” (handsets & voice/data)
© 2007 Infinita Inc.
Source: KDDI
All-Round Product AttractivenessFactors
© 2007 Infinita Inc.
Mobile Content MarketMobile Content Market Segments, 2003-2006 (JPY billion)
2003
2004
2005
2006
0 100 200 300 400
119
92
82
73
7
2
0
6
1
0
75
59
41
27
24
10
0
52
46
20
3
84
105
117
110
Poly Ringtones Real Tones Full Tracks GamesDecomail Books and Manga Other
Source: Mobile Content Forum
© 2007 Infinita Inc.
Mobile MessagingService Example: Decomail
Source: Decotomo.jp; NTT DoCoMo
★ On- and off-deck★ Service Provider: Various★ Service Model: Graphics/animations for HTML mobile mail★ Business model: Subscription; advertising★ Fastest-growing mobile content category along with mobile books/Manga★ More popular than search, picture messaging, music, games, video...
© 2007 Infinita Inc.
Mobile Books and MangaService Example: Mobile Manga
Source: NTT Solmare
★ On- and off-deck★ Service Provider: Various★ Service Model: Mobile versions of comics, sold in episodes (USD 0.30 color/0.10 b&w)★ More than 10,000 titles available★ Business model: Tiered Subscription/points★ 430% YoY growth in 2006★ 60% of readers female
© 2007 Infinita Inc.
Mobile Books and MangaService Example: Mobile Books
★ On- and off-deck★ Service Provider: Various★ Service Model: Novels/stories written on mobile - for mobile★ Not your standard book: Heavy use of emoticons and “keitai shorthand”★ Author and audience “writing together”★ Business model: Subscription; Advertising★ “Deep Love”: from 2,000 flyers to book (2.7 mln), film, TV series, manga
© 2007 Infinita Inc.
Mobile MusicService Example: au LISMO
Source: KDDI
★ On-deck (au)★ Service Provider: au KDDI★ Service Model: Cross-platform (mobile & PC) digital music service★ ca. USD 2.50 per track ★ Full track downloads can be used as ringtones★ Mobile-to-PC backup for music, address data and pictures ★ utatomo: playlist-based mobile social networking
© 2007 Infinita Inc.
Mobile MusicService Example: au LISMO utatomo
Source: KDDI
★ Service Provider: au KDDI★ Playlist-based mobile social networking
• Integration with au Music Player• Blogs/communities• Location-based playlists
© 2007 Infinita Inc.
Mobile MusicMobile Full Track Downloads Usage (All Mobile Internet Users, in %)
Source: Impress R&D, October 2006
Have used itEnabled Handset, but never usedHandset doesn’t support it
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Mobile MusicAverage Full Track Downloads per Month (Active Users)
Source: RIAJ, March 2007
TotalMale Junior High School Students
© 2007 Infinita Inc.
Mobile VideoService Example: MyTube
★ Off-deck★ Service Provider: Key Life Inc.★ Service Model: Video sharing aggregation and re-formatting for mobile plus Social Networking★ Aggregates videos from YouTube, Google Video, Ameba Vision, dailymotion and others★ Pre-filtered for “Japanese relevance”★ Most recommended mobile service among teenagers
© 2007 Infinita Inc.
Mobile GamesAverage Downloads per Month (All Mobile Internet Users)
Source: Impress R&D, October 2006
Never<1 per month1-4 per month>5 per month
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Mobile GamesService Example: DoCoMo Mega i-Applis (905i Series Demo)
Source: IT Media
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Mobile GamesPreferred Types of Games (Active Gamers, in %)
Source: Famitsu, July 2007
Definitely prefer short gamesUsually prefer short gamesUsually prefer long gamesDefinitely prefer long games
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Mobile GamesService Example: DoCoMo Motion-controlled Games (904i Series)
Source: NTT DoCoMo
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Mobile GamesService Example: DoCoMo Motion-controlled Games (904i Series)
Source: Taito
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Social MediaService Examples: mobagetown
★ Off-deck★ Service Provider: DeNA★ Service Model: Free, mobile-only site combining games + social networking + avatars + mobile commerce + news★ Business Model: Advertising/mobile commerce★ More than 6m users in 18 months★ 10 billion+ PV/month★ Core Enabler: Virtual currency “MobaGold”
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Social MediaService Examples: mobagetown (ctd.)
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Social MediaService Examples: mobagetown
Source: DeNA
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Social MediaService Examples: mobagetown
Source: DeNA
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile BloggingAwareness and Usage (All Mobile Internet Users, in %)
20052006
Source: Impress R&D, October 2006
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Social NetworkingAwareness and Usage (All Mobile Internet Users, in%)
Source: Rakuten Research/Mitsubishi Research, February 2007
AwarenessUsage
© 2007 Infinita Inc.
Mobile Social MediaService Examples: mixi
Source: mixi Inc.
★ On-deck★ Service Provider: mixi Inc.★ Service Model: Mobile and PC social networking site ★ Business Model: Advertising (90%), Premium features (10%)★ #1 service in JP SNS market★ More than 10m users★ 10 billion+ PV/month★ 30% of traffic generated via mobile★ Key Success Factors
• Invitation-only• Clear mobile/PC differentiation
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Social MediaService Examples: Kaocheki
Source: J-Magic
★ Off-deck★ Service Provider: J-Magic★ Service Model: Face recognition + entertainment + community
• “What celebrity do you look like?”• 50m picture emails received since launch in summer 2007
★ Business Model: Advertising★ Other implementations of core technology
• Photo-sharing/image recognition SNS (eyenowa)• CD/book cover visual search• Visual search API
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Social MediaService Examples: eyenowa Gourmet
Source: J-Magic
★ Off-deck★ Service Provider: J-Magic★ Service Model: Visual recognition + food info + community
• Find restaurant reviews by sending a picture of shop sign/business card• Share your own reviews and pictures• Create personalized maps of restaurants you like
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Source: IT Media/J-Magic
★ Advertisers: Pizza Hut / Sony Pictures★ Campaign Date: current★ Campaign Outline: “What pizza/zombie do you look like?
• tweaks of ultra-popular Kaocheki service (J-Magic)• take a picture of yourself to see which Pizza suits you (then order it)• take a picture of yourself and be transformed into a Zombie from Resident Evil - find other Zombies on a map
Mobile Social MediaService Examples: Kaocheki “Zombie Check”
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Source: Impress K-tai Watch
★ Advertiser: Lotte★ Target Group: Junior High School Students★ Campaign Date: 04/06-10/06★ Campaign Outline: “Next-generation fortune cookies”
• Take a picture of the Koala on the cookie (217 kinds!) and receive a free fortune-telling message from the Koala• Return email contained link to official community on Mobile SNS Gocco• Boost membership points on Gocco the more you collect
Mobile Social MediaService Examples: “Koala March” Campaign
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Content vs. Mobile CommerceMarket Volume, 2003-2006 (JPY billion)
Mobile CommerceMobile Content
Source: Mobile Content Forum, July 2007
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Commerce MarketMobile Commerce Market Segments, 2003-2006 (JPY billion)
GoodsServicesTransactions
Source: Mobile Content Forum, July 2007
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Shopping and AuctionsService Examples: Girlswalker.com
★ Off-deck★ Service Provider: Xavel Inc.★ Service Model: Mobile Commerce + Events + Real Stores★ #1 service in JP women’s market
• 7 million users• 1.4 billion PV/month
★ Operates a portfolio of fashion-and entertainment-related sites,e.g.
• Fashionwalker.com (Shop and read fashion magazines)• Stylewalker.com (Blog, connect and strut your avatar)
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Shopping and AuctionsService Examples: Girlswalker (ctd.)
Source: Xavel, Inc.
★ Twice-yearly “Tokyo Girls Collection” events combining
• 20+ Brands’ fashion shows• 60+ Top Models and Idols• Real-time shopping via mobile• Live Acts• Beauty Contest
★ Attendance: 25,000★ Tickets: USD 20-80
★ Xavel Inc. also active in actual off-line commerce (fashion, cosmetics, beauty salons, design hotels) through collaborations
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile ShoppingUsage (All Mobile Users, in %)
Once a year 2-4 times/yr. 5-10 times/yr. >10 times/yr. Every month Every weekNot at all Don’t know
Source: Impress R&D, October 2006
© 2007 Infinita Inc.
Mobile ShoppingAverage Yearly Spending (Mobile Shoppers) vs. Yearly ARPU (All Users)
Yearly ARPU in JPY (av.)Yearly Mobile Shopping Spendings in JPY (av.)
Sources: Impress R&D, October 2006; Japan Ministry of Internal Affairs and Communications
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Shopping and AuctionsService Examples: Rakuten
Source: Rakuten
★ On-deck (DoCoMo)★ Service Provider: Rakuten★ Service Model: Online Shopping Site Aggregator★ Biggest online retailer in Japan (40% market share)★ More than 15 million goods for sale★ 25% of sales generated via mobile commerce★ Also operates Rakuoku mobile auctions site with DoCoMo
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile Shopping and AuctionsService Examples: au Shopping and Auction Sites
Source: KDDI
★ On-deck (au)★ Service Provider: au KDDI★ Service Model: Mobile/PC shopping sites (operator-branded, partner-powered)★ Site lineup:
• au Shopping Mall• EZ au Records• EZ au Books• EZ au Tickets• EZ au Games• EZ au Travel• EZ au Auctions
© 2007 Infinita Inc.
Mobile AuctionsTotal Mobile Auction Trading Volume, 2003-2006 (JPY billion)
Sources: Mobile Content Forum, July 2007
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
“Location-based Services”Service Examples: Otetsudai Networks
Source: Location Value
★ Off-deck ★ Service Provider: Location Value★ Service Model: “Location-centric auction system for temp staff”
• Businesses post openings with rate• Workers post profiles and availability via Java client/GPS • Includes ranking systems for employers and workers• Includes negotiation options
★ Business Model: B2B subscription★ About 45,000 workers and several large clients so far
© 2007 Infinita Inc.
On-portalOff-portal
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
The Off-Portal Shifti-Mode Traffic
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Driver I: QR Codes
Source: qrcodeblog.com
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Driver II: Mobile Search
„Japanese teens in the 13-19yr age segment prefer searching using mobile search in 70.1% of cases, as opposed to official mobile carrier listings in 47.1%.“
Source: CNET Japan, May 2007
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Mobile SearchUsage Frequency (All Mobile Internet Users)
Source: Mobile Marketing Data Laboratory, October 2007
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Mobile SearchService Examples: au and Google
Source: KDDI
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Mobile SearchService Examples: au and Google
Source: KDDI
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Mobile SearchService Examples: Yahoo! Mobile on SoftBank
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Mobile Search Service Examples: DoCoMo Multi-Engine Search
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Mobile Advertising vs. Content vs. CommerceRevenues, 2005-2007 (JPY billion)
“Pure Ads”Mobile Search AdsMobile ContentMobile Commerce
Sources: Dentsu, Ministry of Internal Affairs and Communications
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Website Text/Content AdsBanner AdsMobile Email Ads/Mail Magazines
Source: Impress R&D, October 2006Base: Mobile Advertising Responders (multiple answers possible)
Mobile AdvertisingPreferred Types of Mobile Advertising among Users (in %)
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
Source: D2 Communications, May 2007Base: 274 large Japanese corporations
ActiveNot active
Mobile AdvertisingMarketer Attitudes toward Mobile Advertising (in %)
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
20062007
Source: D2 Communications, May 2007Base: Corporations with current Mobile Advertising activity
Mobile AdvertisingPreferred Types of Mobile Advertising among Marketers (in %)
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
1seg Digital Mobile TV1seg Today
Source: Yomiuri TV
★ Free Service (Regulation!) - for now• Standard TV Channels (Regulation!) - for now• Data Feed with Back Channel for selected programs• Time-shifting on some models
★ From 2008: Tailor-made programming, several joint ventures between operators and broadcasters in progress
★ Issues• Reception quality & service areas• Battery problems
© 2007 Infinita Inc.
1seg Digital Mobile TVEnabled Handsets, cumulative shipments (in million)
Number of 1seg handsets shipped
Sources: JEITA, July 2007; NTT DoCoMo, October 2007
© 2007 Infinita Inc.
1seg Digital Mobile TVUsage and usage intention (Representative sample)
Source: CIAJ, July 2007Base: Mobile Phone Users in Tokyo/Osaka
© 2007 Infinita Inc.
Consumer Attitudes1seg usage and usage intention (Teens, male)
Source: CIAJ, July 2007Base: Mobile Phone Users in Tokyo/Osaka
© 2007 Infinita Inc.
★ 6.1 times average use per week
★ 11.7 times weekly use at peak
★ 47 minutes per week average viewing time
★ 75% of users view less than 10 minutes per session
★ 9-12 pm weekday primary attention peak
★ Weekend usage much lower than weekdays
★ 50% use email or voice while watching TV on phone
Consumer BehaviorKey Facts
Source: CIAJ, July 2007; MMRI, October 2007
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
1seg Digital Mobile TVIntegration with ToruCa/FeliCa (Contactless Payment)
Source: K-tai Watch Impress
© 2007 Infinita Inc.
1seg Digital Mobile TVNTT DoCoMo x TBS x McDonald’s Campaign
★ Advertiser: McDonald’s★ Trial Date: June 2007★ Campaign Outline: Mobile TV + mobile FeliCa coupons (ToruCa) + quizzes/games
• Quiz after each inning of Yokohama Bay Stars baseball games • Users who participate are rewarded with ToruCa coupons that can be redeemed at McDonald’s and other prizes
Source: AV Watch
© 2007 Infinita Inc.
1seg Digital Mobile TVFujitsu Spotcasting
Source: Fujitsu
★ Local area broadcasting with limited reach★ H.264 format plus BML★ Automatic launch of 1seg client and tuning via FeliCa chip on phone★ Installation cost: ca. USD 1,000
= In-store broadcasting, temporary broadcasts at events, security applications etc.
© 2007 Infinita Inc.
Contactless PaymentFeliCa Plattform
Sources: FeliCa Networks
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Contactless PaymentEnabled Handsets, cumulative shipments (in million)
Number of FeliCa handsets shipped
Source: NTT DoCoMo, October 2007
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Contactless PaymentJR East: Mobile Suica; BitWallet: Edy
Source: JR East
Source: NTT DoCoMo
Contactless PaymentNTT DoCoMo: iD/DCMX
© 2007 Infinita Inc.
© 2007 Infinita Inc.
Contactless PaymentsNTT DoCoMo: iD Platform Approach
Source: NTT DoCoMo
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Contactless PaymentComparison of Major Players (Installed Mobile Client Base)
NanacoSuicaDCMX/DCMX miniEdy
Sources: IT Media Business, August 2007
© 2007 Infinita Inc.
Contactless PaymentUsage and usage intention (Representative sample)
Source: CIAJ, July 2007Base: Mobile Phone Users in Tokyo/Osaka
★ Av. monthly spend: JPY 5,270★ Mobile-type users spend 7% more than card-type★ Heaviest users: Male in teens and twenties★ Biggest spenders: 50 years and older★ Most used locations: convenience stores and train stations
© 2007 Infinita Inc.
Source: SoftBank
SoftBank: Strategic ApproachA Mobile Carrier and...then some
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Source: IT Media
KDDI: Strategic ApproachFixed-line, Mobile and Broadcasting Convergence
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Source: NTT DoCoMo
DoCoMo: Strategic Approach“Life Assist” Concept
© 2007 Infinita Inc.
DoCoMo Vision
Source: NTT DoCoMo
© 2007 Infinita Inc.
InfinitaMission
★ Research and promote mobile innovation
★ Build mobile sites/applications
★ Bring together partners with complimentary goals
★ Facilitate business between Japan and abroad
© 2007 Infinita Inc.
http://www.taito.co.jp/company/news/release/mobile/news_mc_image/2007/10_12/01.jpg
InfinitaClients
http://www.nttdocomo.co.jp/info/news_release/page/images/new070911_01-3.jpg
© 2007 Infinita Inc.
Thank you!
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