Takashi Amano reports for Bloomberg:

“The causes of cancellation for DoCoMo’s phones has been the lack of iPhone and this would prevent customers from moving,” said Yusuke Tsunoda, an analyst at Tokai Tokyo Securities Co. in Tokyo. “As all three will have the iPhone, they will compete on price, sales method and network.”

The network competition will be an interesting one. None of the carriers have a similar LTE roll-out strategy and have been using a set of different bands, depending on what they got allocated.

DoCoMo has a strong 2100 MHz LTE roll-out and is perceived as having a very strong network, a plus.

au/KDDI was famously caught in a quagmire after they misrepresented their actual iPhone LTE coverage—the 2100 MHz band1, but the new iPhone model will also use the 800 MHz band, a strength for the carrier. KDDI possibly has the overall advantage for the iPhone LTE coverage now .

SoftBank has a more complex situation. It decided last year to use its 900 MHz band to extend its 3G to battle its bad network reputation2. This decision might now play against it, since it can’t now use it for LTE—although this could happen in 20143. On the other hand, the roll-out on the 2100 MHz band is going well. I don’t want to read too much into this but SoftBank’s CEO was a no-show at Apple’s keynote. Sign of frailty?


  1. Nikkei, in Japanese, paywalled 

  2. the lower frequency allows for a wider per cell coverage, lower signal decay, better building penetration. SoftBank had no access to such a lower band before which clearly contributed to being seen as having a weaker network. 

  3. note that the iPhone won’t be able to access its AXGP (TD-LTE) on band 41 

In August 2006.1

And 7 years later, August 2013.

In 7 years, a lot has changed in the Japanese mobile landscape.

DoCoMo added 9.86 million subscribers.

au/KDDI added 14,64 million subscribers.

SoftBank added 18.51 million subscribers, more than doubling its size.2

 


  1. hover or click on the pie charts for more information 

  2. Numbers are from the Telecommunications Carriers Association, I’ve not included Willcom nor eMobile by design, I’ll write more extensively about those at a later time. 

The news is in. NTT DoCoMo carries the iPhone .

It is the end of an old story and the beginning of a new one. Every time Apple would release a new version of its handset, the rumor mill would start running again: DoCoMo would carry the iPhone. The first we’ve actually heard about this was in June 2007, a full year before the iPhone would be released for the first time in Japan. This time around, the reports were true1

Who needs whom?

Apple needs DoCoMo as much as DoCoMo needs Apple .

It hasn’t been always the case. Back in 2007-2008, DoCoMo was arguably in a stronger position in the Japanese market. That era was a very different one. Japan was still at the peak of its feature phone empire, foreign smartphones were basically absent—Nokia has actually left the market in 2008 and BlackBerry sales were negligible. DoCoMo, as its competitors, was able to control the whole ecosystem, from what handsets would be made by its partners—Sharp and others—to what consumers would see on the dedicated internet portals, thus limiting access to content and developers.

Apple, although historically strong in Japan in terms of marketshare for its line of products, wasn’t in a strong enough position to arm wrestle DoCoMo. And even when it became a force over the years, it seemed that the carrier was somewhat lingering to its past. It only seriously pushed smartphones in 2010, even 2011 depending on how you analyze it.

2013 has changed the narrative

2013 possesses a somewhat different narrative. DoCoMo is still the king2.

Apple has a clear interest in working with the king. 60 million subscribers cannot be dismissed. Even 30% of those, the number of iPhone users that DoCoMo executives would seem to be comfortable carrying, are valuable. Apple wanted to expand. 2013 is a defining moment. Apple has to turn the narrative around. In Japan, it had to be DoCoMo.  A DoCoMo with very valuable users, potent for both the average revenue per user (ARPU) and the image—quality + quality = more quality. Apple couldn’t ignore those factors.

DoCoMo changed its mind

At the end of 2012, it seemed that the question was settled. DoCoMo was affirming its Android-only philosophy. Then something happened.
If we look at the growth these past twelve months, you can see a somewhat different picture from that of a big king towering the competition. Let’s assume all three carriers started acquiring customers on Sept, 1, 2012. This is how it would look:

DoCoMo is an incumbent in the position of the challenger.

But, why the iPhone?

Couldn’t an aggressive marketing and discount campaigns help DoCoMo? It’s not as if it hasn’t tried. The Samsung Galaxy, arguably its flagship phone, has been extremely successful. It could have tried harder. Maybe. But there was pressure from the shareholders, probably anxious to see the margins being trimmed again and again (not that it’s the fault of Android per se) and pressure from customers, some of which had switched and want to come back—DoCoMo still has the reputation of the best overall network in Japan—or those who carry two phones for the sake of the iPhone3.

Is the answer to that (perceived) predicament the iPhone? In a way it is. Japan is an outlier market in Asia. Its iOS’ market share is very big , similar to what one used to see in the US. It’s also a market with a very high ARPU.

The Apple brand value (and its products obviously) has been so strong that the iPhone was able to thrive without being on the main carrier, in a country where customers are considered very loyal—even if many other factors also explain the success of the competition, from aggressive marketing to more innovative solutions.

The iPhone boost

Still, the iPhone has proven to be rocket fuel for Japanese carriers . SoftBank has been leading customer acquisition in 59 months out of the 62 months since it started carrying the iPhone. au/KDDI has been placed second in 22 months of the 23 since it started carrying it—allowing it to maintain its #2 position, something that looked increasingly impossible between mid-2007 and the end of 2011.

If I single out a three months period post-iPhone 5 release, the boost is quite evident.

Arguably, the iPhone boost is what DoCoMo wants and needs  in order to remain the undisputed king.

Why was DoCoMo refraining?

DoCoMo wants control.

some of DoCoMo’s own services that we provide on Android phones won’t work on the iPhone, which doesn’t leave room for much customization, so we have to give up on them.

said DoCoMo Senior Executive Vice President Kazuto Tsubouchi to the Wall Street Journal. Emphasis mine: customization meant control.

This has always been the case, the carrier wants to control the experience. It was, after all, the standard definer in the market. It’s hard to let old habits go.

The question is now open: did DoCoMo get anything in return for carrying the iPhone?

There have been rumors of a DoCoMo logo emboss, a software boot-up logo, both highly unlikely. Even more unlikely, DoCoMo getting a pre-installed app, probably the preferred DoCoMo scenario. In the end, my take is that the pressure on DoCoMo was strong enough. A possibility would be that the carrier’s staff installs an app for the customer upon contract signing. DoCoMo would have an almost pre-installed app.

An illusion of control.

 

The iPhone 5S and the 5C will both be available on DoCoMo on September 20. Pre-orders will start on September 13 in stores, and online for the first 30,000 Premier Club to do so. And, of course, au/KDDI and SoftBank will have them too.

Let’s see who will get the biggest boost. Let the true competition begin.

 


  1. and I lost my bet, as I had forecasted it would happen in 2012 

  2. for simplicity’s sake, I’ve taken out the numbers of Willcom, the wholly-owned SoftBank carrier, and eMobile, of which parent’s company is partially owned by the same SoftBank. In the former case, SoftBank itself doesn’t aggregate the numbers into its own: that’s around 5.26 million subscribers. In the latter case, actual subscribers numbers are no longer reported, I would estimate those at around 5.24m. 

  3. this trend has diminished though, almost to the point of extinction 

Yukari Mitsuhashi on Startup Dating:

When it comes to mobile apps, Mixi is taking a somewhat experimental approach with its Mixi Lab initiative. So we thought that it might be fun to take a look at the list of apps that the company has in line for us.

At first glance, the following list of mobile apps doesn’t seem to indicate any unifying strategy. But having been the dominant social network in Japan for so long before Facebook and Twitter came along, Mixi really has lots of information about online communities. And thus, Mixi is now in a unique position to create many apps around those long established communities

Mixi has been sidelined in the shift to mobile.  Not to mention having a somewhat defiant stance about Facebook in Japan—until it was too late. I’m not certain of the success in going a bit all over the place with different apps with various unrelated names—confusing when a Line solidifies its branding. Time will tell.

I moved to Tokyo in June 2008. I immediately thought I was living in the future. The cultural shock and misunderstandings about what it really meant notwithstanding, the technology that was surrounding me looked so different, a Galapagos —the term that became en vogue a few months later.

The 2008 shift

A massive shift actually started one month into my new life there. Unbeknownst to me, the release of the iPhone 3G—the first Apple handset to be released in Japan and for which I queued and queued and queued—was an inception. It’s just incredible the amount of change that the smartphone revolution—for the lack of a better wording—has brought to the country. The carriers have been shaken and even though DoCoMo remains king, SoftBank, which took the risk to carry the iPhone, gained tons of new subscribers1. The app stores that exist were not able survive the new freedom found by both customers and, almost most importantly, app developers. The carriers lost some control of their neatly organized ecosystem. DoCoMo showed an ability to somewhat maintain the old world order, but at the price of being relatively late into going head first into the smartphone world—the Android philosophy it has now was only truly cemented in 2010-2011. And rumors are at a fever pitch as to the possibility it will finally carry the iPhone.
The most striking change is surely the fate of the Japanese handset manufacturers. Remember Sharp, Panasonic, Toshiba and all the others? Some linger. Some died. Basically only Sony soldiers on. Get on a Tokyo train, you’ll basically only witness iPhones and Galaxys.

The other 2008

2008 was also the year when Nokia pulled out of Japan, having failed at capturing any significant market share (it pulled out its Vertu premium brand in 2011). Another symbol as five years later, the name won’t be seen on smartphones anymore anywhere. It shows how much not only Japan but the world of mobile has changed. How fast it’s still changing.

It’s not a full circle for me.

This blog was borne out of the frustrations I had endured trying to get an iPhone contract. As a foreigner not speaking the language well-enough, not to mention totally unable to read any of it, I thought I could help by providing some information. The world has changed there too, getting a smartphone is much more foreigner-friendly —I can swap a nano-SIM into my iPhone every time I land at Narita and get unlimited data, all that in English.

This is thus not the rebirth of a blog I had forgotten about. My friends, Joseph, Steve, Andrew, Pietro, who all wrote here, ventured to new horizons—new countries even—as I did. I’m still passionate about mobility and about Japan, it’s still a focus of my job, I just can’t be writing detailed articles on how to get a contract in Japan anymore. Thus, the scope of this blog is changing. Not only it is becoming more personal—I will be the only author—but it will be more about curating news, with a few words of analysis. Sometimes (and sometimes only), I’ll take time to write bigger stories.
The archives have been maintained, but the formatting is a work in progress, so just drop me a line if a post that interest you is borked and I’ll prioritize it.
There is also no more commenting either, I don’t have time to moderate, but you’re welcome to react on Google+, Facebook and Twitter.

This is pretty much it. Welcome to (the new) Mobile in Japan.


  1. au/KDDI beat its relative slump when it went iPhone in 2011 too.