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Hi all,

An interesting article from Saturday's NY Times:

http://www.nytimes.com/library/tech/00/08/biztech/articles/19japan-cell.html

(Everyone should be able to link to it still, I believe. Don't know how long it will remain active).

Basically, it discusses how the popularity of i-Mode in Japan has led to some interesting business developments.

First, content providers are able to charge subscription fees for their sites and services, because mobile phones make it much easier: they simply add it to the user's phone bill. Secondly, people are more willing to pay for content over mobile devices because a) they don't have to use credit cards, b) there isn't the tradition of free content as there is on the "wireline web" (particularly here in the States), and c) content and commerce sites are pre-screened by the wireless providers, increasing the trust of users.

As a result, the article notes that plenty of Internet-based content companies, which are having a hard time making money here in the US, are raking in plenty of dough in Japan.

Also interesting is the role of the wireless carriers: not only do companies (primarily NTT DoCoMo) get higher monthly fees from extended use, they also get 9% of whatever service fees the content companies charge.

It makes clear what a cash-cow 3G could be for wireless providers; no wonder the bidding went so high in Germany. In many ways, the position of the Japanese carriers reminds me of AOL's position in the early days of the Internet: a provider of online services that earns money from both the monthly access fees and a cut of any service revenues generated by partner companies. A pretty sweet business model, I guess.

Comments?

Fool on,

Chris
TMF RFK

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I absolutely agree. This makes $50 average per user a lot more likely and also puts the comments by several german companies into perspective who say that the entire revenue model will have to be reworked for 3G.

And as for the bill paying via the phone bill. This is gaining a lot in the adult business at the moment on the web as it is very secure and you do not need a credit card. And as sad as it is, the adult web is ahead of the rest of the web many times :)

Oliver
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This is gaining a lot in the adult business at the moment on the web as it is very secure and you do not need a credit card.
And as sad as it is, the adult web is ahead of the rest of the web many times :)


Why do you think so many people pay for high speed internet connections? :)

Still on my 56k,
Clones
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That's a really interesting article. I also think that the lower cost of buying a phone to access web services (when compared to a desktop computer) are also a big factor in the success of the mobile market.

When you throw in the benefit of increased security surrounding payment for goods and services you buy over a phone, the overall commitment level to start-up on the part of the consumer / user is therefore quite low.

I think that this means we will see people who have been afraid to access the internet with PC's, using their phones as "a first step" to the internet. The challenge will be twofold - keeping them online with worthwile services and making the devices, browsers and services consistently cheap and more importantly, easy to use.

Another aspect of this model which I think is interesting is that it will mean that these people are not necessarily looking for the "internet in the pocket" in terms of graphic heavy surfing - certainly not in their initial experiences. My feeling is that online content / service providers don't really get this at the moment and will probably struggle with this issue for a while.

For those who are more familiar with the online internet and want to supplement it with the wireless world, I think we will see some interesting integration between online applications and wireless applications. For example, you might rely on your PC to type in lots of data - meetings, etc. in your organiser appplication - and then simply get the reminders and review the notes on your wireless device. Another potentially interesting business model.

I'd like to find out more about Docomo and iMode and have tried to locate English-language versions of their sites. Does anyone know of any URL's?
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One interesting site I just found -- it may have even been linked earlier on this or another board -- is "Japan Mobile Information," at http://anima.editthispage.com/stories/.

Just started looking at it myself, so I don't know about the quality of info, but it looks solid, more or less.

Chris
TMF RFK
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> One interesting site I just found -- it may have
> even been linked earlier on this or another
> board -- is "Japan Mobile Information," ...

here is another site about imode:

http://www.eurotechnology.com/imode/faq.html

Best regards,

foolishlysimple

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