Friday, June 6, 2008

Japan's iPhone - A Portal to the World?

The world continues to be "lit up" by the iPhone, and the latest news that the 3G version will soon be launching in Japan ( correctly called by Lars and the team at Wireless Watch Japan), the question that keeps being launched our way is "does this really matter?"

Japan is a market that accounts for less than 3% of the world's total mobile subscribers, but generates 19% of the world's total data revenues, and stripping data communications revenues (like SMS and mobile messaging) out of this equation, 36% of global mobile internet revenues. All of this without the iPhone.

So the prospects that the iPhone will spark further usage of mobile internet content and services in Japan seems to be a little far-fetched. But where the iPhone is likely to make it's greatest impact is bringing the Japanese market more closely in line with other markets around the world.

As Japan has spent nearly a decade separated from the rest of the world in terms of mobile internet usage and adoption, the iPhone may turn into the great equalizer. Exactly the right platform to begin to help the most successful content, services and applications gain the global attention that they deserve. And at the same time, create a platform for future innovations that may help the world catch up to Japan's levels of mobile internet usage.

So while the overall impact in terms of total sales may not impress the analysts, something more subtle, but potentially more important to the future of the mobile internet may be underway. Although I believe that Google's Android is a more blatant attempt to make Japan's overall ecosystem model relevant around the world, the iPhone may also go a very long way in bringing an entirely new level of collaborative innovation between Japan and the rest of the world.

1 comment:

  1. From a higher level point of view, interesting indeed. While we tend to look at more basic domestic requirements such as the need for Flash and GPS (the latter by both function and law), along with likely lack of now considered standard includes; such as Felica m-commerce and 1Seg digital-tv, the potential impact of this 'unique device' on global trends does deserve consideration as well.

    On one hand the mature Japanese mobile market will prove a challenging task for the iphone, kanji text input and battery life expectations for example. However, little doubt that hard core web surfers here are sure to enjoy the scrolling UI on a large touch screen and easy integration with iTunes. As always it's the execution, difficult at this point to judge, which will make all the difference. It would be fairly safe to say that local users will begin to understand what they have been missing while at the same time come to realize what they have long taken for granted.

    To your point about encouraging "collaborative innovation between Japan and the rest of the world", of course that would be ideal. The original iphone was notoriously locked-down and there are rumblings that rev. 2 will be even more so, particularly in respect to so-called 'jailbreaking' the sim-lock. That being said the company announced an iPhone SDK in March with app store availabilty via iTunes coming in June. It appears Apple will try to enpower 3rd party developers, using the recently touted Cocoa Touch framework and integrated database API, in an effort to create an growing value proposition of products and services for end users. The business model, path to revenue, and access to key device functions will be critical areas to consider as bytes hit the cloud.

    As we have noted many times that Flash, required by all operators going back to 2004, combined with 90% penetration of 3G speed and over half of users on flat rate data plans, has resulted in a massive uptake of mobile web surfing. As dynamic browser based stratagies, with server side horsepower, become more widely adopted it would seem likely that such common platforms will drive innovations regardless of the geographic region where they are developed or deployed.