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What's It All About: An i-mode Primer (int'l edition)
You don't have to be Japanese to be up on the latest wireless technology
The mobile Internet, with its new technologies and services, is a tough concept to
grasp. Having plunged deeply into NTT DoCoMo's i-mode universe, Business
Week's Tokyo Technology Correspondent Irene Kunii poses and answers a few
basic questions:
Q: How fast is i-mode?
A: The current service has a transmission speed of 9.6 kilobits per second
(kbps), which is like using a steam locomotive in today's world. But it's good
enough if you're using a packet-switching system, as the i-mode service does.
You're not going to get full-motion video, but you can download images at a
speed of two frames per second. E-mail is limited to about 250 characters per
message, but you can get a series and scroll down. The current screen
technology leaves a lot to be desired, though, and reading these messages can
strain your eyes.
The i-mode service uses compression technology to increase the volume of data
that's transmitted, and the underlying packet-switching system makes efficient
use of bandwidth.
Q: What happens to i-mode when the world moves to the next generation
of high-speed wireless services, known as 3G?
A: I-mode is a brand and a service, not a technology. When DoCoMo moves to
up to 3G services, i-mode will be overhauled as needed.
Q: Why is i-mode so popular?
A: This service arrived just as Japanese are beginning to crave easy Internet
access. The country's computer-penetration rate is only about 13% of
households. And while Japan now has some 20 million Internet users, only 3
million to 4 million are believed to be accessing it from home.
A big attraction of i-mode is that you can have a constant connection. You can
leave your phone on all the time, as long as the batteries are running. You pay
only for the data sent and received, and for services you may subscribe to that
are offered by official providers (which now number around 300). Since data
moves in packets, like the Internet, many people can access the network
simultaneously.
Another attraction is the low basic subscription fee of $3 a month, for which you
get an i-mode e-mail address. And i-mode, like DoCoMo's cellular service for
voice, is nationwide, covering 98% of the country.
Q: What is the business model here?
A: DoCoMo's i-mode planning group knew that they needed a portal type of
service to attract users and a menu bar to make it easy to look for information.
DoCoMo helps its official content providers customize their i-mode Web sites.
Official providers' sites can be accessed directly from DoCoMo's i-mode menu,
and official providers can charge a monthly fee for a service. For example,
animation and toy company Bandai charges $1 a month for the right to
download a character. DoCoMo handles the collection as part of its monthly
billing and takes a 9% commission. However, it makes most of its money by
charging for the volume of data sent and received.
Q: How many Web sites can you access, and what makes them so
special?
A: It all has to do with how the text on a Web site is processed, so you can read
it on a tiny cell-phone screen. I-mode uses a subtext of HTML called compact
HTML to convert the information. Apart from the official content providers,
nearly 4,000 sites can be accessed by punching in the proper URL. Many
existing Japanese Web-site operators are launching i-mode-enabled sites
because it's quite simple to convert an existing Web page to one formatted for
i-mode.
Q: What kind of competition does DoCoMo face?
A: DoCoMo is the first to offer a wireless Internet access service, and it has
shown the world that the masses are ready for it -- even if it can't provide
moving video and other jazzy functions. But DDI and IDO, DoCoMo's two
main rivals in Japan, are introducing their own packet network that will operate
at a speed of 14.4 kbps.
DDI and IDO already have an Internet service, cdmaOne, which is based on an
international standard called WAP (wireless application protocol), an alternative
to DoCoMo's compact HTML. The two now have about 350,000 subscribers
to their e-mail service, but they require a dial-up each time. With the introduction
of a packet network, cdmaOne users who purchase the necessary phones will
be able to stay connected all the time as well. Some adherents believe that WAP
is becoming an international standard that will displace i-mode. For 3G,
DoCoMo may go with whatever emerges as the main standard.
WAP works much like i-mode, enabling users to access data on Web sites
specially formatted for small text. In Japan, only about 100 sites are tailored for
WAP, so it's not clear whether they can catch up to DoCoMo in the next year.
After that, DoCoMo will introduce 3G with a starting speed of 64 kbps, and it
will overhaul i-mode to fit wideband CDMA.
Q: What is wideband CDMA?
A: Also known as W-CDMA, this is another set of high-speed protocols. The
core was developed by the U.S. military, but DoCoMo tweaked it. Based on
this standard, DoCoMo will probably be the first service provider to launch a
3G digital-cellular system. Initially, transmission speeds will range from 64 kbps
to 384 kbps, depending on what you want to do -- send e-mail or moving
images. By 2003, DoCoMo plans to boost the speed to 2 megabits per second.
Q: What will the extra speed let you do?
A: If you want to order a video for the evening, you'll be able to call the rental
outfit and download clips to your smart phone while riding the train home. When
you get home, you'll stick the handset in a jack that's connected to your home
entertainment system and download the movie. Go get a glass of wine, and when
you return, you can sit down and watch that film.
Think of what you're doing now with the desktop Internet and transfer it to the
mobile Net, and remember: The handsets, display, compression, and other
technologies are only going to improve.
Q: Does i-mode give Japan a competitive edge?
A: Japan is running out of bandwidth for its second-generation digital-cellular
system, so it has been aggressive in pushing for early adoption of a
third-generation standard. There will probably be several standards adopted
worldwide.
Japan will be the first country to adopt 3G, and DoCoMo will be the first to the
market with its wideband CDMA. There are nearly 48 million cell-phone users
in Japan, and 57% of them already subscribe to DoCoMo. So market analysts
expect the company to continue to dominate the Japanese market when the
world moves to 3G.
Many people believe that Japanese manufacturers of handsets and equipment
will have the advantage when the same 3G standard is deployed in Europe and
parts of Asia. Others argue in favor of Nokia, Ericsson, Motorola, and Lucent.
They all have labs in the Yokosuka Research Park, where they're taking part in
experiments with DoCoMo on W-CDMA. (Qualcomm, Lucent, and DoCoMo
hold the patents for CDMA.) The non-Japanese companies plan to use this
high-tech knowhow in both the European and Asian markets.
But the Japanese companies still have the advantage, according to Seiji Sanda,
founder and CEO of Japan Communications Inc. "NTT DoCoMo has the rights
to the chipset, mounting, and miniaturization technologies. So, whoever wants to
make the same sleek, lightweight handsets for another market will need NTT's
permission," he says.
Companies such as Matsushita Communication Industrial (Panasonic), Fujitsu,
Mitsubishi Electric, and NEC have been fine-tuning miniaturization techniques in
cell phones for five years, and they could become global players. Right now,
they have only 20% of the global telecom market between them.
Q: How big is the potential market?
A: The Japanese government forecasts that in 2010, 120 million Japanese, or
almost the entire population, will own a handset. But since many people will own
more than one, Japan's market potential is estimated at 360 million units.
Currently, Japan's wireless market generates $50 billion in revenue, or 40% of
the country's total telecom revenues. By 2003, according to an industry
association, the market is expected to be worth $100 billion, with $60 billion
generated by mobile Internet business. |
