It’s difficult to get a true picture of the Japanese mobile market. It’s particularly important for mobile as it was the first to launch 3G and is still one of the only major 3G successes to date.
I’ve been reading a trial copy of “3G success in Japan: Waves of Disruptive Innovation” by Gerhard Fasol, PhD. You can download a copy yourself if you click here (click on the “Try” button).
One has to be careful translating the Japanese experience wholesale to other markets. It’s not the same at all (see pic of loo paper vending machines, by way of illustration) – but many of their experiences ring true from what’s happened so far in the UK.
We believe that one of the reasons for the success of 3G in Japan was, that 3G was not introduced as ÏPremium ServicesÓ for VIP customers at high fee levels, but on the contrary, 3G services in Japan are introduced in many aspects as a discount service, bottom up. In our direct observation 3G achieved mainstream breakthrough from Spring 2003 onward: not with top paying business users, but with young people, high-school students at discount fees.
This is certainly true of 3′s experience – it’s only when they dropped the price that things started to take off. Having said that, this also coincided with service improvements and handsets that looked OK. There’s also a potential problem in that if you build your service on a price platform, others can undercut you and it’s going to bugger your ARPU projections.
One area 3 might have learned lessons from however is this:
You may find several surprising facts about 3GÌs success in Japan. One of these facts is, that the arguable most rapid and successful introduction of 3G was and still is without video telephony services.
I’ve long argued that this is a service most consumers don’t want anyway, so I can’t say I’m remotely surprised. But in any event, it would make sense to delay launching this type of service until phase 2. You need a critical mass of people who are able to call each other for this kind of thing to work. Otherwise you’re gagging to video call someone (let’s assume) and you can’t.
Despite Vodafone’s dominance elsewhere, they have been singularly unsuccessful in Japan, accounting for less than 1% of total 3G subscribers. This has partly been their inability to get customers to trade up. But it could be yet another example of the Law of Leadership I wrote about earlier.
As far as the future is concerned, stand by for some huge disruption:
Second wave of disruptive innovation: some carriers are preparing now to introduce TD-SCDMA in Japan from 2005 which was developed in China. This could mean, that Chinese mobile phones can be used in Japan and vice-versa, creating a combined China+Japan market, which would be truly disruptive and could bring spectacular new developments.
It looks like a great report if you want more info on the Japanese 3G market and reasonably priced at Euro 412.
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