MMJ: Japanese market update 05/09/2002

The telecom press continued to bombard NTT DoCoMo with articles arguing the technical superiority of CDMA2000 (Qualcomm) over W-CDMA (DoCoMo) with repeated mention of low subscriber numbers for DoCoMo’s W-CDMA-based FOMA service. But amid the storm, NTT DoCoMo announced a joint venture with Mitsubishi Estate Co. to build 3G base stations and possibly Wireless LAN stations located on properties managed by Mitsubishi Estate. The company is Japan’s second largest real estate firm, and the deal would target office buildings managed by the company for deployment of high-speed wireless access points. This is an interesting development, if it works, since it is in-line with DoCoMo’s recent efforts to position FOMA, its 3G service, as a corporate product.

In related news, much of Japan this week has focused on the Nikkei’s slide to new 18-year lows. NTT DoCoMo is Japan’s largest stock by market capitalization and sunk to a 42-month low, constituting 50% of its value since the start of the business year on April 1st. Although most analysts are attributing this decline to a hazy outlook on future growth (a maturing market matched with slow 3G service uptake), they do not see DoCoMo as performing any worse than most other global telecom stocks.

This week Honda unveiled ‘InterNavi Premium Club’, a wireless voice-activated car navigation system that Honda will launch across Japan this fall. The service will be introduced as a feature in new Honda Accord models and be included free of charge for three years and potentially the majority of new models by 2004. This announcement comes only a day after Toyota released its ‘G-Book’ wireless information service that that allows drivers to access content over KDDI’s 3G CDMA network. Earlier this year, Nissan launched the ‘Carwings’ information service. The entire auto industry seems to be synchronized on its determination to introduce new telematics services as a standard feature in new models. Although no business models appear to be clearly worked out, the three companies view the offerings as the next phase of service competition. Japan is leading market for car telematics and mapping services, so these wireless services are a natural progression.

Last, in the ‘new phone model to check out’ section comes NTT DoCoMo’s mova F671iS i-mode handset which the company released this week. One of the neat new features we need to go test out is the ‘read-aloud’ capability, which essentially reads out mail, operating menus and other functions. The phone also comes with a ‘voice activation’ system that allows a user to speak to the phone to perform tasks such as retrieving stored numbers. It’s worth noting that the phone is being marketed as DoCoMo’s ‘easy-to-use’ phone. Recent data shows that children and older consumers have been two segments interested in purchasing phones but complaining about the difficult user interface.

Written by Scott Murff for PMN Mobile Industry Intelligence.

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