iMode a silent revolution

iMode a silent revolution

Takeshi Natsuno, Managing Director for DoCoMo Strategy talks about iMode.

NTT dominates world wireless Internet.Europe, US are tiny in comparison.

" The game software industry for phones is becomming as big as older game industries "

NTT just announced the series 505 phones. He considers Macromedia Flash would be a big breakthrough for their phones. Smooth Flash stuff would certainly score over pixelated Java apps.

NTT has 38 million active iMode subscribers, which makes them the biggest ISP in the world, bigger than AOL. They have 2,300 official commercial content/service providers in their network, with over 62,000 voluntary iMode sites.

Consumers are ready to pay for devices and net access because they get content they value. NTT has made it easy for third party content providers to offer their services into their network. As subscriber growth happens more content companies and higher quality content comes online.

They shot up to 38 Mn subscribers from zero, on the winds of the strategies below :

1) Technology. Use best available content technology -- real HTML (cHTML), MIDI, Java, Flash.

2) Business model. Design business model around content service providers, not around telecom operators or handset manufacturers. Micro-payments model, user friendly portal for content selection, makes it easy to install and use .

3) Marketing to normal people, not just to techies.

Japan's centralized control enabled the rapid and easy establishment of standards, and Japan's advanced network technology enabled them to move much faster than US and European markets.

As in Internet, Voice has continued to decline while data has made up for that decline.

Two years ago, they added Java to the phones. They now have 17.4 million active Java subscribers, with over 600 Java app suppliers. There is also a market for Java-based corporate applications. There are 6,000 independent Java content/app sites available over iMode. Despite Sun, they made Java in devices successful.

He expects that with the introduction of Flash in their phones, they'll witness a jump in usage.

Digital content market on iMode is about $1B in 2002, and over half the subscribers pay for digital content

He says iMode is all about a service designed around content and users. In other markets, fragmentation in operator, handset vendor and content value chain makes coordination difficult.

On their 3G platform, they offer MPEG4 video, and it's evolving into being a multi-point video phone and better platform for content. 384Kbps currently. But they only have 380,000 users of 3G today because not enough applications have been developed for it.

He predicts,

1) US/Europe would follow iMode model with content-centric value chain model.
2) Big migration from 2G to 3G starts in Japan in 2004.
3) Deeper convergence between Internet and telco


Will new devices come up that combine stereo music, DV/camera and video communications, eventually displacing portable music and camera markets?

They will in the long run, but it's no where near making this transition today. The music and camera capabilities are very far behind, and are really mostly applied in the special context of mobile communications. That will change over time.