Fortune article with good press for us.
Although last months edition - thought it would be nice to have it posted for newbies that might want to do some reading.
Great look at the vision of NTT DoCoMo, upcoming competition and where we in the US might be headed.
Imagine, 5 million subscribers to DoCoMo's Internet-enabled cell phone? Whew . . just when you thought getting in the car would keep you away from the market . .
There are a number of good short takes on some other Asian issues as well.
pathfinder.com
Japan Goes Web Crazy
After years of languishing, Japan is finally waking up to the wonders of the Internet. This just might be what the country needs to get its economy roaring again.
By Jim Rohwer
Signs of the revolution are everywhere. Stroll through the Ginza these days, past the Internet cafes and PC shops, and you're likely to run across gaggles of giggling, platform-shoed teenage girls exchanging e-mail on their cell phones.
Or meet Hiroshi Mikitani, a 34-year-old Harvard Business School graduate who in 1997 founded an online shopping mall called Rakuten. Today the site has about 2,000 "stores," including posh department stores like Seibu, and is adding new ones at a rate of 200 a month. Mikitani has 60 employees (most look barely into their 20s, and all will of course get stock options), who work out of spartan offices in a modest Tokyo suburb. This dynamic entrepreneur plans to take Rakuten public in April with a listing on Jasdaq, Japan's answer to the over-the-counter market.
So now it's Japan's turn. The world's second-biggest economy has a good chance of becoming one of its most exciting Internet markets. Explosive growth is one reason: Only a year ago cell-phone company NTT DoCoMo offered a handset that hooks up to the Internet. Today it has five million users. By 2003, the 18 million who use the Internet in Japan today are likely to swell to 60 million.
But that's only part of the story. The Internet is forcing the Japanese economy to restructure, a much-needed change that has been foolishly put off for a decade. Japan is what you might call a middleman economy, and if there is anything the Internet is great at, it's killing off middlemen. Whether it's banking, retailing, or health care, the Internet will lower transaction costs, reduce the number of workers, and streamline communications. The possible savings are staggering. Last year the Tokyo office of McKinsey & Co. jointly did a study with MITI that estimated the Internet would produce cost savings in Japanese industry of about $600 billion a year every year from 2003 to 2008--an amount equal each year to roughly 13% of Japan's GDP.
So the rest of the world, having grown lazily accustomed to the sorry state of the place during the 1990s, should realize that a restructured Japan is going to be an immensely powerful competitor in all sorts of businesses. If you thought Japan in the 1980s was mighty, wait till you see the post-Internet version.
The stock market has already sensed it. The Nikkei index of the Tokyo stock exchange (TSE) rose a respectable but not stunning 52% in 1999. As in America, though, all the action came in high-tech stocks, which quadrupled their share of the market's capitalization. Look at specific stocks, and the picture becomes starker. Japan's big four Internet stocks outperformed the shares of all but a handful of Silicon Valley firms. Stock in NTT DoCoMo, which has half the country's mobile-phone market and is leading the charge into mobile Internet services, went up by more than 300%. Softbank (now Japan's fifth-biggest company by market cap) was up more than 1,250%; Hikari Tsushin (a five-year-old mobile-phone and Internet investment firm that is now bigger than Honda or Matsushita) was up almost 2,900%. Yahoo Japan, which operates independently of Yahoo in the U.S., was up more than 4,200%, giving it a P/E ratio of more than 1,000 and a market cap that's on a par with Amazon.com's.
To some extent, of course, Japan is simply sharing in the worldwide Internet mania. But many Japanese Internet firms are highly profitable, and the recent stock market gains are also driven by the imminent removal of two obstacles to Internet growth. All Internet revolutions begin with the deregulation of telecommunications and the consequent sharp fall in the price of telecom services, which is why America got such a head start on the rest of the world when the Bell system was broken up in the 1980s. Japan has been extremely poky about cutting Nippon Telegraph & Telephone (NTT) down to size, with the result that until late 1999, Internet usage was metered at about $2 an hour; add in high Internet service provider (ISP) charges, and a monthly Internet bill could easily come to $120, five or six times higher than in America.
But now several firms are challenging NTT's preeminence in the local loop. SpeedNet, set up by Tepco, Microsoft, and Softbank, uses fiber-optic cables strung along Tepco's power lines and wireless transmitters to carry signals to homes and offices. Sony is setting up its own high-speed wireless network to bypass NTT, and another consortium, DSL Access Platform, headed by Mitsui, one of the biggest trading firms, has been given regulatory approval to hook up to NTT's network in a way that allows it to offer flat-fee Internet access. Within months it will cost half or a third as much to go online in Japan as it did even in mid-1999 |
