DoCoMo's Expansion Plans for i-Mode: Goodbye Kitty!
By Tero Kuittinen
Special to TheStreet.com
8/20/01 7:33 AM ET
URL: thestreet.com
NTT DoCoMo(NTDMY:OTC BB) created plenty of buzz earlier this year with grand descriptions of its plans to extend i-mode mobile service outside of Japan. i-mode has been the darling of the Western press, constituting the nearly mythical beast known as a "revenue-generating mobile data service."
DoCoMo has nimbly exploited the starry-eyed descriptions of its Japanese service in the foreign press by hinting that it will repeat its domestic success with foreign partners all over the globe. The leading launch partners in the Western expansion are expected to be AT&T(T:NYSE) in the U.S. and KPN(KPN:NYSE ADR) in Europe.
A funny thing has happened as the months go by, though -- as we get closer to i-mode's supposed global launch, we seem to know less and less about what is being launched. No handset partners and no content information have been released yet, and KPN recently pushed its launch from this year to next. DoCoMo's plans for i-mode's western expansion have a funky, Heisenbergian quantum quality: the closer you look, the more uncertain you become of what exactly the key parameters are.
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DoCoMo has had total control of handset specifications in its domestic market -- it only knows how to live with its very own feudal market domination over all hardware vendors. Outside of Japan, it won't be able to dictate software specs to manufacturers. Companies that have built their success on total domination in a given niche find it very hard to compete in an open environment where they are arriving late. Building a successful service in the claustrophobic hothouse of the Japanese handset market is one thing. Doing so in markets dominated by both competing proprietary user interfaces and open, industry-wide standards is another.
Most of existing i-mode content is culturally idiosyncratic. Or to be brutally frank: it's just plain weird. Middle-aged men outside of Japan do not read comic books about teenage girls in plaid skirts; much of i-mode content is similarly unique to Japan and impossible to export. Think fuchsia Hello Kitty screen-savers with a "Cuddle Great Us" slogan. Hello indeed. And probably goodbye.
Some of i-mode's pricing structure is also impenetrably exotic. Japanese consumers currently pay for received text messages under i-mode, but it's a chilly day in hell when Western consumers agree to that. You can't retrain consumers after they have gotten used to certain pricing solutions (like receiving short message service, or SMS, for free in the Western markets).
i-mode gets more than 50% of its non-messaging revenues from logo and ring-tone services. These services have been introduced in the West as handset specifications that are not part of i-mode; if DoCoMo tries to introduce new logo and ringtone specs in the West, it will be like trying to reinvent the wheel.
Multimedia messaging service, or MMS, the new messaging platform offering consumers photo-messaging, 16-channel audio technology, color animation, etc., is slated to debut next winter. It's endorsed by all the leading phone vendors. If DoCoMo takes on this locomotive, it will get buried. On the other hand, if it adopts it as part of i-mode, it will render i-mode service itself irrelevant. By missing the first two to three years of value-added service development outside of Japan, i-mode is a day late and a dollar short. It will have to compete not only with MMS, but also with different Java flavors, xHTML and so forth. By leaving its Western expansion to 2002, i-mode is about to walk into the biggest software brawl in the history of mobile telecom since it allowed the Western phone vendors to lock in consumers to their own SMS/ring-tone/logo/MMS development pathway.
So take away ringtone and logo services, the text-messaging pricing structure and a stranglehold on phone specification development, and what's left of i-mode? Nothing much. Which might be why DoCoMo abruptly backed out of KPN's supposed i-mode introduction for 2001 and is now vaguely alluding to a "2002 launch" -- still without naming the actual handset partners or phone specs.
Much like with Oakland -- there is no there there. |
