The Japanese market has given the world a glimpse of what the
Wireless Internet might look like, and it is a prime force in the
direction and momentum of the Wireless Internet market. NTT
DoCoMo is Japan’s leading mobile phone operator and largest
ISP and the world’s leader in Wireless Internet access. Since
starting its data service (called i-Mode) in February 1999, NTT
DoCoMo has seen its subscriber base grow to top 26 million as
of August 2001; it averages 40,000 to 50,000 new subscribers
per day. This spectacular growth is driving NTT to implement
3G technologies that will provide for greater capacity and allow
creation of new applications. Only about 15 percent of Japanese
consumers and business people access the Internet via PCs.
Thus to many of NTT’s i-Mode customers, the i-Mode is synonymous
with the Internet. According to NTT DoCoMo, the “i”
stands for interactive, Internet, and independence.
In Japan, businesses from airlines to television stations to
banks all provide their services via i-Mode. DoCoMo earns a 9
percent fee from content providers that charge for their information.
DoCoMo has four revenue models: monthly subscription
fees, per-packet data transmission fees, commissions on billing,
and revenues for traditional voice services. In 2000, DoCoMo
reported that 70 percent of i-Mode traffic came from users in
their teens to early twenties, with about 60 percent of i-Mode
traffic going to official sites that specialize in entertainment.
According to NTT DoCoMo, the average total bill for i-Mode
data transmission is about $13.00 (U.S.) per month. Equally
impressive, the average i-Mode user generates an additional 36
percent increase in revenue over voice-only subscribers. Much of
this increase can be attributed to direct access, use of data packets,
and increasingly higher voice minutes of use.
The increase in voice usage is interesting in that we believe
it represents a hidden upside to most United States business
models. Even more impressive is i-Mode’s transmission speed
of only 9.6 Kbps. Even at this “slow speed,” some of the best
selling applications are (surprisingly) cartoon-character screen
savers that download each day for $1. The i-Mode service has
been so successful that at times DoCoMo has curtailed its
advertising in efforts to slow down subscriber growth while
improving network capacity. When DoCoMo launched i-Mode,
it had 67 Web site providers: By the end of the first year, there
were 721 information providers responsible for 1,280 sites on
DoCoMo’s main i-Mode menu, and third party developers had
created another 31,085 i-Mode sites. Additionally, it was
announced in February 2001 that that Google had developed a
new technology that gives i-Mode users in both English and
Japanese access to the more than 1.3 billion Web pages Google
has indexed to date. Google’s technology converts a request for
a standard HTML Web page to be viewable on an i-Mode
handheld device. i-Mode’s success is enhanced by the huge
number of content sites available to the subscriber.
To better understand the reason for i-Mode’s popularity, and
the rapid and overwhelming adoption of the Wireless Internet
by the Japanese people, we must look at Japan itself. In Japan,
space is at a premium—homes and offices are small and there
is very little extra room to accommodate PCs, monitors, and
printers. Furthermore, Japanese society is traditionally an early
adopter of technology in general and it is a commuter culture.
Today, only about 15 percent of Japanese consumers and
business people reach the Internet using PCs. The remaining
85 percent are willing to accept the limitations of smaller display
screens and keyboards on wireless handheld devices.
Furthermore, the price of PC Internet access via landline phone
is higher in Japan when compared to the United States or
Western Europe. The average costs are $20 per month plus $2
per hour of use. The installation price of a home phone line is
approximately $700, as compared to a cellular connection for
$28; and i-Mode users pay only for the number of packets used.
Because the Japanese are traditionally early adopters of new
technologies, they have been very quick to adopt new i-Mode
products and services. For example, Japanese consumers have
purchased dog collars that transmit their animal’s location to
their wireless device, PC, or fax machine. Entertainment-related
sites where you can download images, ringing tones, play
interactive games, read your horoscope, find dating services,
weather, and news are most popular. Because the majority of
Japanese students and employees commute (usually by train or
bus) an average of 30 to 40 minutes per day each way, they have
ample opportunity for mobile communications and entertainment.
Pocket-size devices are really well-suited to these commuter
environments where, more often than not, there is no
room to even open a newspaper. Even a small notebook computer
is too big to carry on a bus or train, whereas the i-Mode
device is the perfect size to be held in one hand. Table 3-7
shows the popularity of i-Mode content by category. Figure 3-10
shows preferred mode of access to the Internet in Japan.
Because of the unique characteristics of Japanese society, it
remains to be seen how quickly other societies and cultures
embrace the Wireless Internet experience. Acceptance will
depend on packaging and pricing, and quality and quantity of
compelling content and services. However, as the Japanese
experience clearly demonstrates, acceptance of the Wireless
Internet is high when things are done right. 126