The iPhone 4S has been out for two weeks in Japan. And sales are riding high, really high.

BCN Rankings has released its well-known figures and they’re quite impressive.

Now, bear in mind that these numbers are to be considered with a disclaimer: the rankings are based on point of sales surveys covering lots of mobile specialty shops and consumer electronics resellers but excluding a very big player: the Apple Stores.

Also note that there are no official numbers from Apple itself or the two carriers who offer the handset, SoftBank and au/KDDI.

Yet, those numbers allow us to witness some trends.

Week 1: the iPhone steals the show

In the first week, the iPhone 4S took the first 6 spots.

1. iPhone 4S 64GB (SoftBank) — 10.4%
2. iPhone 4S 32GB (au/KDDI) — 10.3%
3. iPhone 4S 64GB (au/KDDI) — 9,4%
4. iPhone 4S 32GB (SoftBank) — 9.1%
5. iPhone 4S 16GB (SoftBank) — 8.2%
6. iPhone 4S 16GB (au/KDDI) — 6.3%
7. Samsung Galaxy S II (NTT DoCoMo) — 3.4%
8. Xperia acro (NTT DoCoMo) — 3.3%
9. iPhone 4 16GB (SoftBank) — 2.3%
10. Xperia acro (au/KDDI) — 2.1%
11. iPhone 4 32GB (SoftBank) — 1.7%

BCN did aggregate sales market share of that week, which percentage you see appended above. If we aggregate the 4S-only numbers (the iPhone 4 is not carried by au/KDDI), we’ve got a slightly higher market share for SoftBank at 51.8% —that’s 19.4% for the 64GB, 17% for the 32GB and 15.4% for the 16GB, while au/KDDI has 19.2% for the 64GB, 17.5% for the 32GB and 11.7% for the 16GB.

Again, these numbers are just what they are, trends. The market share is even less relevant for, I repeat it, the Apple Stores are not surveyed, which completely skews numbers when some other phones do not have separate points of sales (the four phones following place #11 are feature phones on NTT DoCoMo, followed by four other Android-powered smartphones all on DoCoMo as well).

Early 2011 sales better than 2010

BCN went further and computed an indicator of the “level of enthusiasm” for the iPhone, by comparing their numbers with historical data from the iPhone 4 in 2010. But, once again, the comparison needs explaining: in 2010, there was only one carrier, SoftBank, while this time, we’ve got two, a big difference. The “enthusiasm” is also blurred in a haze of first-timers that were loyal to au/KDDI (on surplus, did they switch from an Android smartphone for instance or are they smartphone-first-timers?), iPhone-carrier switchers (from SoftBank to au/KDDI), iPhone-upgraders (with a two-year contract on the iPhone 3GS, some didn’t jump for the 4 last year), etc. But still, there seem to have been 2.4 times more sales on the iPhone 4S release day the similar day last year. And if you go through the weekend, a four-day period, this number rises to 5.4x.

Not too shabby. Let’s see if this sustains in the long run, with the influence of stocks hanging in the balance.

Another trend we spot: the 64GB version was the most popular during week #1. Totally expected if you want my two cents. You see, most early adopters rush at that time and look for the higher-end model —the break-down is 36.8% of sales for the 64GB, 36.1% for the 32GB and 27% for the 16GB.

Am I right? Week #2 seems to prove my point.

Week 2: au/KDDI rises

1. iPhone 4S 32GB (au/KDDI)
2. iPhone 4S 16GB (au/KDDI)
3. iPhone 4S 16GB (SoftBank)
4. iPhone 4S 64GB (au/KDDI)
5. iPhone 4S 32GB (SoftBank)
6. iPhone 4S 64GB (SoftBank)
7. iPhone 4 32GB (SoftBank)
8. Samsung Galaxy S II (NTT DoCoMo)
9. Xperia acro (NTT DoCoMo)
10. iPhone 4 16GB (SoftBank)

BCN didn’t rank the market shares this time around.

Two weeks is really limited to be jumping to any conclusion. The higher-priced model took the aforementioned expected hit, but it could also be slightly influenced by stocks hovering low forcing a choice towards the 32 or 16GB versions (see this thread on our forums about current availabilities and note that Apple Stores traditionally get priority, which could explain that some shops have empty shelves).

More interestingly, au/KDDI seems to dominate the sales a bit more. It could be that early adopters who also had the possibility to upgrade from their SoftBank contract did, while the novelty effect is stronger for au/KDDI’s subscribers.

All this is pure speculation from my part. These numbers only tell a partial truth —sorry to have bored you by repeating this to death.

One thing is for sure though: my estimate of 7.5m iPhones sold in Japan will have to be revised soon.

I had a very nice conversation last week with Anthony Joh, who recently launched a podcast from Tokyo, a city he just moved in after a chapter in Bangkok.

We talked about the hot topic of the month, the release of the iPhone 4S, that I’ve been covering quite extensively in here.

I had a great time with Tony. His experience getting an iPhone for the first time in Japan reminded me of mine in July 2008 —it was actually the reason I started the first version of this blog (see the first post ever here).

tokyo-podcast

Things have changed for the better if you’re a foreigner with limited Japanese skills, though. SoftBank, the first carrier that got the Apple handset here, now does a good job listing all the paperwork needed in advance.

You can listen to the show on iTunes, download the MP3 file or head to Tokyo-Podcast to stream it.

They took their time. It’s only for the first day of pre-ordering that au/KDDI and SoftBank are releasing the price information for their iPhone 4S.

au/KDDI

The newcomer first. au/KDDI is accepting pre-orders at brick and mortar shops from today, even if I’ve gotten a few reports of points of sale being not ready at all for this last-minute release. Take a look at its new iPhone page to learn more.

It offers the iPhone with a two year contract. The basic plan will cost you JPY 780/month.

au/KDDI overview:
Contract: 24 months
16GB: JPY 0 /month*
32GB: JPY 430 /month*
64GB: JPY 860 /month*
Plan: JPY 980/780 /month
Web services: JPY 315 /month
Data: max. JPY 4,980 /month
* after discounts

The accompanying data plan is unlimited and costs up to JPY 4,980 per month (the data packet price is not detailed). An included free wifi plan is announced, but no details are available as of yet.

The iPhone 4S is “free” —as in fully subsidized— for its 16GB version and will respectively cost JPY 10,320 and 20,640 for the 32 and 64GB versions, the cost being accrued during the 24 month period.

A more expensive plan with free calls to other au/KDDI customers from 1am to 9pm and free texts to those same ones without 24/7 will cost you JPY 980/month (outside of the aforementioned period, texts costs JPY 3.15 and a call is priced at JPY 21 per 30 second segment).

au/KDDI is touting the number portability by offering you JPY 10,000 if you become a subscriber until the end of January 2012. That means that the iPhone 4S 32GB would cost only JYP 320 instead of JYP 10,320 overall, and the 64GB would come down to JPY 10,640 only.

This is clearly to lure SoftBank customers, but it also applies if you’re on NTT DoCoMo. We’ll see how that works out.

No word about tethering, I wouldn’t bet anything on it though. Unlocked iPhones 4S from au/KDDI are highly improbable: Apple hints that unlocked 4S will only be the GSM versions —or those activated by a GSM provider. In Japan, Softbank.

It is also uncertain if the pricing will hold or if it’s only part of the launch campaign (the data pricing might rise up to JPY 5,000+/month next February).

Asiajin mentioned earlier that KDDI is planning to expand the iPhone 4S point of sale network from a current 1,200 locations to 5,000 at the end of October.

SoftBank

SoftBank is also accepting pre-orders as of today.

At the time of this writing, the price structure remains the same as before. Two year contract, JPY 980 for its White Plan, to which you have to add the S! Basic Pack at JPY 315 per month (basically the mobile email service). Full run-down on its iPhone page (SoftBank has the pricing in English).

SoftBank overview:
Contract: 24 months
16GB: JPY 0 /month*
32GB: JPY 480 /month*
64GB: JPY 880 /month*
Plan: JPY 980 /month
Web services: JPY 315 /month
Data: max. JPY 4,410 /month
* after discounts

The data plan is still unlimited, with a minimum monthly fee of JPY 1,029 and a max of JPY 4.410 per month —the data packet being priced at JPY 0.084. Remember that tethering is not supported.

SoftBank will still sell the iPhone 4. For “free”. As will the iPhone 4S 16GB. Free with the discount: you pay the device JPY 1,920 per month (1,680 for the 4) but get a similar discount for the 24 months of the contract.

Only if you buy the 4S 32GB will you get a discount of JPY 1,920/month while having to pay for it JPY 2,400 month —or an actual monthly payment of JPY 480. Same discount for the 64GB version, but a monthly JPY 2,800 —a difference of 880.

Complicated enough? Basically, all in all, without the extra services you can get, the iPhone 4 and the 4S 16GB will cost you JPY 5,705/month, the 32GB JPY 6,185 and the 32GB JPY 6,585. None of those are unlocked.

Something eludes me in this strategy: why on Earth would you take the iPhone 4 8GB instead of the iPhone 4S 16GB?

Maybe it’s that SoftBank just had to price the 4S like au/KDDI.

If you’re a 3G or 3GS owner with SoftBank, you’re eligible for free upgrade plans during the launch campaign that runs from October 14 to November 30.

In the same blitz against au/KDDI, SoftBank is promoting a limited offer for all current or new iPhone subscribers: a “free” iPad 3G data plan. It allows you to get data for your Apple tablet at the low price of JPY 315/month, no subscription fee. First 100MB are free and then you get charged JPY 0.0525 per data packet to a maximum of JPY 4,980/month.

The comparison

Gigazine has made the comparison for us (thankfully since it’s a bit tricky). It’s all in the graph below. It doesn’t include the promotions I’ve mentioned here (like that JPY 10,000 cash back from au/KDDI), assumes you’re going to reach the upper threshold of the data plan (remember that we don’t know how much KDDI charges per packet of data) and it only compares the similar plans for convenience: Simple Plan Z from KDDI (at JPY 980/month that includes free calls/texts) and SoftBank’s White Plan (also at JPY 980/month with some free calls/texts too) but gives an interesting overview. According to it, au/KDDI is actually more expensive. I’ll let you be the judge of it.

gigazine-kddi-softbank-price-comparison

The real difference is in the data plan. I can bet SoftBank will react shortly.

 

One thing is for sure, competition is good. Let the price war begin —because, really, it hasn’t started yet.

UPDATE: excellent au/KDDI price chart translation on SBS’s website (thanks to @serkantoto), I also totally agree about the theoretical data speeds comparison —as I had stated earlier.
Steve Nagata has more details on SoftBank’s iPad offer (thanks @hirokotabuchi).
Steve also argues that the SoftBank iPhone 4 could be directed at people who could be ineligible for a 2 year contract. Makes sense.
Note that Apple Stores are not taking pre-orders, they will start to sell the handsets on October 14, 8 am on a first-come first-serve basis.

We know since last night that au/KDDI is officially the second carrier to get the iPhone in Japan.

While no release date has been publicly announced, we learnt that KDDI decided not to wait until 2012 and the upgrade of its mobile email service to start selling the device.

What we know for sure is that SoftBank will start selling the iPhone 4S on October 14.

What we also know is that SoftBank CEO, Masason, has decided to fight back the competition.

MASASON THROWS THE GAUNTLET

Look at that tweet he sent an hour ago:

masason-calling-out-kddi

What is Masason saying yes to? SoftBank has download speeds of 14.4Mbps —the same touted by Apple yesterday, dissing the 4G talks— and 5.7Mbps uplink , while au/KDDI only offers a maximum of 3.1Mbps downlink with a 1.8Mbps uplink.

It’s interesting to note that the original tweet was meant as a question, asking the CEO if the difference was due to SoftBank using W-CDMA, aka HSDPA, while au/KDDI relies on CDMA EV-DO Rev. A standard.

Masason just went for the affirmative on those numbers. If that’s not called opening the hostilities… “KDDI, raise to the challenge!”

KDDI Data Standard

It’s certainly true that specs for this latter standard would need to be upgraded to the Rev. B to reach the 14+Mbps range.

Now, KDDI had actually announced some time ago it would upgrade to a subset of the aforementioned Rev. B standard to allow for some channel bundling, leading to a theoretical downlink of 9Mbps. I must admit that I would need to verify if those plans came to fruition and whether the entire network is —or will be— concerned.

And those numbers would have to be tested for both SoftBank and KDDI to not remain purely theoretical.

 

The fact of the matter remains: SoftBank is feeling the heat from the competition and Masason will not throw the towel. I can’t say that I don’t admire his fighting spirit.

Ready to rumble?

 

UPDATE: I’ve corrected the download and upload speeds, thanks to Andrew Wright.

au/KDDI, Japan’s second biggest cell phone carrier, has just confirmed it will carry the iPhone 4S. I predicted that right.

It will go ahead with the sale of this new handset irrespective if its mobile email service —a key element for Japanese users— is made compatible in time.

KDDI had 2012 in mind

Earlier plans had KDDI releasing the iPhone in January 2012, in order to upgrade its EZweb email conduit first. It seems however that the possibility of reaping nice profits at the launch of the new iPhone 4S in two weeks made the company change its mind.

Yes, you read that right, iPhone 4S could be sold from au/KDDI this month already.

The official release date for the iPhone 4S in Japan is October 14.

Apple makes it official

Apple Japan has updated its “where I can buy” page with the new au/KDDI option (and it seems the website is getting hammered by requests already, showing amazing interest: it’s 4am in Tokyo now)

apple-japan-iphone-kddi-official

The iPhone hasn’t appeared on au/KDDI’s website yet, either because it’s very late in the night or for a specific date hasn’t been set by KDDI yet.

SoftBank is feeling the heat. It’s releasing no less than 11 Android-powered handset for its fall collection. The iPhone 4S will arrive in SoftBank’s store on October 14 for sure.

UPDATE, October 5 2011, 6.45pm JST: au/KDDI’s website was briefly updated with the iPhone 4S before removal, confirming the impending launch. However, the mobile site still features the handset, with a direct link to Apple Japan:

kddi-mobile-site-iphone4S

Credits: iSummit Ustream channel, Nikkei

I kinda felt it. I was wrong. By a week.

The official Apple Ginza Store page on Apple Japan has indadvertedly updated its website. The iPhone 4S will be out in Japan on October 14. In black and white. With the same form factor than the current iPhone 4.

It means that it’s part of the first roll-out and that the US will get it at the same date.

iphone4s-leak-japan

The website mentions a new possibility to chose the carrier. As Akky rightfully says it on Asiajin, it could only be a straight traduction from the US text. I’ll have to wait if I had the other prediction right last March, i.e. that: SoftBank has no competition in Japan from au/KDDI.

It seems a new iPod Nano will make its debut too.

UPDATE: Apple Japan restores pre-updated page (thanks to fellow Mobile in Japan editor Joseph Tame)

UPDATE: it’s official, it’s the iPhone 4S that will be released on October 14, both by SoftBank and au/KDDI.

Credits: Netafull for the original story

Let’s talk iPhone.

In my last two articles, I have made a series of bets. First, as I had written last March, I suspect that the iPhone is coming to au/KDDI. Exclusive deals between Apple and carriers are gone and the rumors are very strong.
Yesterday, I went a bit further and imagined the new iPhone would released on October 21 in Japan. And on KDDI as well. This might turn out wrong. The handset might arrive on SoftBank only and on October 14. KDDI might have to wait.

As official Apple events are often US-centric, there’s not much we might learn there. I’m going to live blog it anyway here with my thoughts on the implications for Japan.

Note that you will also be able to follow these updates on the live account of Mobile in Japan: @MijLive.

All times are JST (Japan Standard Time).

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Apple’s iPhone event might be only tomorrow, but here are three predictions for Japan:

How do I suspect that date?

Well, while SoftBank might be used to work with Apple and keep mum about everything from Cupertino, au/KDDI isn’t.

The marketing staff did a blunder.

the Leak that isn’t a leak

In its last marketing push about the Green Road Project —one where subscribers can donate money for each kilometer they walk or run to buy seeds for a greener Japan—, an iPhone mention is already printed, not only seemingly confirming au/KDDI is getting the handset, but also implying a release date.

kddi-iphone-japan-release-date-440x247

Yes, I know, it could be a typo. But, as usual here, I’m hedging my bets, accepting failure if I turn out wrong.

According to another sourced document (I insist that I was not able to independently validate it though), it seems that the US and selected European markets will get the new handset on October 14 and Japan a week later, on October 21.

One of my other sources tell me that SoftBank resellers have already started training for the new iPhone sale, seemingly confirming that the original iPhone carrier will get a new Apple release during the month October.

A new Uncertain Future for SoftBank

SoftBank is evidently the company that has the most at stake in having iPhone competition in Japan. Not only it remains the third carrier with about a fifth of the market (behind au/KDDI and the giant NTT DoCoMo, more numbers in my previous post), but its network is considered the weakest of them all.

It surely not non-coincidental that SoftBank’s CEO has just announced a massive investment plan to improve the mobile operator infrastructure.

The same could be said about what he wrote on his Twitter account on September 21, a few hours before the first rumors of au/KDDI getting the iPhone:

全ての人に分かれ道はやって来る。 問題は、そこで正道を選ぶか邪道を選ぶかだ。

Literally: Everyone has to change its path. The problem, choose the right or evil path.

More liberally: When you arrive at a crossroad, the question is about electing the right path.

He is talking about the end of SoftBank’s Apple golden era? Is it a sign of the Apple relationship turning a bit sour? One can only wonder.

A New smartphone strategy FOR KDDI

Interestingly, KDDI has shut down its Android au site at the end of last month as it was unveiling its fall collection of handsets. Until then, the company was firing all cylinders on its Android portfolio to the point of confusion: it was as if Android was a sub-brand of au/KDDI (or, some would say, as if au/KDDI was a sub-brand of Android). That Android-centric strategy was obviously bound to change with the recent release of a Windows Phone 7.5 —and, yeah, that impending new iPhone.

Will KDDI call out SoftBank seemingly weaker network out to lure new subscribers? Will SoftBank react by aggressively adapting its pricing model?

Interesting times ahead.

One thing is for sure, the iPhone is changing everything in Japan. Again.

 

 UPDATE: it’s official, KDDI gets the iPhone 4S. Only SoftBank confirms it will start selling on October 14.

Credits: @NewSrider_G for the original image included in this post & my fellow Mobile in Japan writer, Pietro Zuco, for looking at the various sources.

The Nikkei calls it a sudden collapse of the monopoly. I simply think the writing was on the wall.

The iPhone is coming to KDDI/au.

The Writing was on the wall

I had predicted that the iPhone would land at KDDI —and not DoCoMo, the market leader— last March already.

No need to rephrase myself, the reason number 1 was simple:

Exclusive deals are gone. As many -and we- had correctly guessed it, SoftBank’s exclusivity ran for two years. July 2008 – July 2010.

Japanese customers willing to put their hands on the iPhone will now have a choice, if rumors are correct —and I strongly believe they are.

SoftBank or KDDI.

And with the iPhone 5 being a “world phone”, a multi-standard phone that can work on different technologies —SoftBank uses GSM, KDDI/au W-CDMA—, it’s …one iPhone to rule them all. No need for Apple to manufacture two different handsets for the dueling carriers.

SoftBank Crown Jewel

SoftBank was the first and exclusive provider of the iPhone in Japan so far. I still remember the 17 hours queue on Omotesando-dori that July 11, 2008 (the 2G network being only but a memory in Japan, the iPhone 3G was the first release here). It was my first iPhone and it was the prime reason behind the existence of this blog (getting a phone when not fluent in Japanese was tough back then, it’s now easier, and my Japanese is far better too).

In the years since, there has been a lot of non-sense about the apparent failure of the handset to succeed here. A year ago, without official sources, I was estimating that the iPhone had sold 5 million units in Japan. Naysayers can shut up.

Inferring from various sources, I’d say that number is in the 7.3 – 7.5m range now and represents 50% of all the smartphones in the country, even reaching the 70% within the 16-24 y.o. market —iOS has a bigger overall share with maybe 4m iPods and around a million iPads. Gartner stated that Japan accounted for 6% of iPhone shipments in a report last fall.

Market Expansion

SoftBank is only the third cell provider in Japan in market share. It boasts around 27m subscribers, having gotten a big boost out of the iPhone sales —it has basically beaten its competitors in new contract sign-ups for 17 months straight.

No doubt Apple was willing to expand its opportunities by adding the 34m of KDDI.

I know, why not go for DoCoMo and its 59m subscribers directly? I estimate that it’s still in the works, but that it was just easier to deal with KDDI. That carrier hasn’t had a real smartphone smash hit and is desperate to catch up.

This position has made the negotiations easier. Especially when you think that such negotiations can be unusual for Apple, as Japan is a country where mobile operators traditionally control or heavily influence handset manufacturers, hardware specs, features sets, installed-software and product life cycles, a model that Apple shattered.

I’m also pretty sure that the deal includes a hefty sum from KDDI. But we might never know.

Another possible factor: chatter is that iPhone sales growth slowed down in Q1 2011, a possible trigger for Apple to look elsewhere. I’m pretty certain negotiations had started before those numbers were known though.

Interestingly, KDDI is the mobile operator which offers the most smartphones in its line-up, but none of them has been a smashing success like the iPhone or the Samsung line at DoCoMo.

About 20m smartphones will be sold next year in Japan. The annihilation of the dumb phone market might be as soon as 2015 at this growing rate. Viva Android and iOS!

Customer Choice

From a customer point of view, the quality of KDDI’s network compared to what many say is the worse of the three, SoftBank, will undoubtedly push some current iPhone owners to switch —well, transfers of users is the rule anyway, it’s not as if Japan has any room to grow, the numbers of subscribers already surpasses the number of inhabitants in the island.

The big question is when. Sources disagree. Some say the iPhone 5 is coming on KDDI by this October/November. Others insist it’s not before January 2012. That last date is plausible: it could be the second roll-out of iPhones after the US. Apple has applied this country roll-out differentiation in the past to cope with demand. We could learn it officially as soon as September 29 anyway.

But customers seems eager to get it sooner than later. Twitter in Japan was all abuzz about the prospect today, with the news trending throughout the day, showing signs of interest to say the least —but also disappointment in no DoCoMo iPhone news.

Another place that knows about trends: the Tokyo stock market. It has hit Softbank’s stock with a 12% fall. Ouch.

Is it a turning point for SoftBank? That’s a debate for another article.

Let it be written down though, my bet is that DoCoMo will reach an agreement with Apple in 2012.

Only by then it will ready be One iPhone To Rule Them All.

Update: it’s now official

[box] UPDATE: the iPad 2 arrives on April 28. Read more. Official pricing here. [/box]

For those who have been living under a rock these past 24 hours, Apple has announced the new iPad. It’s thinner and comes in two colors -ok, more than that, just Google it, the specs are all over the web.

While it will land on March 11 in the USA, a few selected countries, including Japan, will get it on March 25.

These are the known facts. Let’s get to the questions.

SoftBank only?

The iPad 2 comes in more flavors than its predecessor. Besides the white & black color options, the 16, 32 & 64GB  versions and the Wi-Fi only model, the iPad 3G will have two variants. This is new and this is where it could become interesting.

Apple will offer the first model with UMTS/HSDPA/HSUPA (850, 900, 1900, 2100 MHz) & GSM/EDGE (850, 900, 1800, 1900 MHz) connectivity, the same technology that existed on the first Wi-Fi + 3G model and the one used by SoftBank. Let’s call it the “AT&T model”. The second, however, is new: the “Verizon model” is made for CDMA EV-DO Rev. A (800, 1900 MHz).

It means that, like the iPhone 4/5, the iPad 2 could work on au/KDDI’s network. The big question is then: is Softbank still in a sort-of exclusive agreement with Apple over the iPad?

When the iPad was released last May, many were caught off-guard by the fact that it was SIM-locked nationwide. No other microSIM card than SoftBank’s could be put in any iPad 3G sold in Japan, the only market to have this limitation. The new models come less than 12 months later and the addition of a variant that SoftBank cannot use shouts for the end of any such deal. With the chatter around KDDI negotiating for the iPhone 5 and DoCoMo’s CEO not having lost all hope on getting it -as he stated a week ago-, could it be that Cupertino’s tablet also becomes carrier-independent?

Chances are not high, it seems likely that iPad buyers will be tied to SoftBank for a bit more, but it creates room for potential competition as the general SIM unlocking debate continues to rage.

Right now Apple Japan only displays the existing arrangement, with 3G models being sold by SoftBank only and the carrier only redirects to Apple in its press release. One thing seems for sure though, tethering with iOS 4.3 won’t work in Japan -surely SoftBank’s specific requirement.

Pricing

Pricing is not known at this point, but with Apple replicating the iPad 1 price ranges in the US, Japan might very well have a similar deal, with prices being the same than last May. Apple won’t let a price war happen on the device, only data plans could see some interesting movements if another mobile operator enter the game. Note that the iPad For Everybody plan by SoftBank did end on February 28, maybe making room for an iPad 2-specific offer.

It will also be interesting to see if KDDI -or any MVDO like b-mobile- will release a dedicated microSIM for imported “Verizon-model” devices. And what SoftBank reaction could then be.

Availability

The surprisingly short pre-order period in the US and the close release date in international markets could mean limited availability. Apple has obviously planned the release well and is known for its great supply chain structure, but I would be surprised if Japan receives massive amounts of iPads, not to mention “Verizon models” -if they make it here at all- at start. Be prepared to queue.

You can be officially notified about the iPad 2 news by submitting your email at Apple. And discuss if you’ll get one in the community forums.

You know how we all thought DoCoMo would get the iPhone next? Well, time to think again. au/KDDI, the second biggest mobile carrier, might very well be the one to get its hands on the prized Apple handset. Maybe as early as this summer.

It’s not a change of heart, it’s just a technological possibility that didn’t exist: KDDI’s network is based on the W-CDMA standard. Like -you guessed it- Verizon.

The introduction of that “new” iPhone in the USA last January is giving way to a different scenario in Japan as in some other Asian countries.

iPhone in an open relationship

But wait, isn’t Apple tied up with an exclusive agreement with SoftBank? Exclusive deals are gone. As many -and we- had correctly guessed it, SoftBank’s exclusivity ran for two years. July 2008 – July 2010.

That type of deal was not unique to Japan, but the nail in the coffin was the official confirmation during the Q1 2011 earnings conference call that the AT&T deal was the last territorial exclusivity falling. Rest in peace.

More subscribers, more growth

Tim Cook, Apple’s COO and Jobs’ standing man during his leave of absence, also stated during that call that the company was constantly evaluating growth possibilities, seeking new ways to expand market share.

He couldn’t be clearer than that. No more exclusive deals + W-CDMA iPhone = growth.

KDDiPhone

Now, can the Japanese equation be: no more exclusive deals + W-CDMA iPhone + growth = KDDI?

Apple being in bed with three to four carriers in certain countries, no one can rule DoCoMo out -I wouldn’t, ever- but the chatter is that Cupertino’s would go first with KDDI who’s apparently less demanding in the negotiations -hey, DoCoMo is the big fish here, it can afford to be grandstanding a bit.

iSuppli, the market research firm, seems to be certain KDDI will lock the contract before this summer. It even computes this in in its worldwide W-CDMA iPhone shipment for 2012 –16.5m.

The official KDDI stance? A simple “no comment”, as President M. Tanaka Takashi reiterated during KDDI’s Q3 results presentation at the end of January. Well. That’s after the PR department made a blunder a few days before by implying talks were going on.

KDDI needs the iPhone

KDDI has been struggling in the smartphone wars in Japan. Although still number 2 with approximatively 33m subscribers (against 25m to SoftBank and 57m to DoCoMo), it has been lagging in new users additions and seemed unable to offer a solid smartphone strategy for a long time. The recent announcement of the Skype partnership, the Foursquare tie-in, the social gaming Gree marketplace, the IS series -although delivered with an outdated Android OS version- or the upcoming Motorola Xoom -this April- show that it’s getting something of a grip, but the iPhone would obviously be the massive boost the company needs, both in terms of sales and image.

The iPhone was the most popular smartphone in Japan during pretty much all its run. In the last six months of 2010, MM Research says that it was responsible of 60% of the smartphone segment’s shipments -the Xperia being a very distant second. That’s the phone people still talk about and KDDI needs one phone everybody talks about. The IS03 was close to it, but was drowned in DoCoMo’s Galaxy S noise.

KDDI promised that smartphones would account for the majority of its lineup this year. While not entirely true -those keitais are still hot for some-, it has revealed new high-end phones, like a nice WiMax-compatible HTC. Still, not a single one was able to cover its competitors’ noise so far. KDDI, I repeat, needs a big winner. It needs the iPhone.

The smartphone battle is heating up -again- in Japan.

Realizing that it was clearly lagging in that fast-growing segment -hey, we’re talking 4m units this year in a cell phone saturated market-, au KDDI, Japan’s second biggest mobile carrier, has decided to take a bold move. It entered an alliance with Skype, the peer-to-peer VoIP company.

Because calls between Skype users are free, mobile-phone companies have feared their revenue would decline should they make the service available. For that reason, the Skype app was viewed as verboten until now

Bold enough? At least in the eyes of Tanaka, KDDI’s Senior VP.

No details have been released yet, though. No package pricing in particular.

Skype on WiFi?

It’s only the second time that Skype partners with a cellco. Their first deal was made with US Verizon Wireless.

If you didn’t know, Skype calls are actually not made using the data service there. They’re being done on the voice line. Skype’s press release says KDDI will also do that.

That’s a big no-no for Wifi, sorry folks.

It has to be noted that calls will need to use a bit of data before being re-routed to the voice line. Hope KDDI won’t charge users for that.

Skype to Japan numbers?

The Verizon deal only allows Skype calls to be made while on US soil. And while Skype-to-Skype are free, the Skype-to-cell/landine minutes are charged against the plan. That should be similar with KDDI in Japan. Or will it?

If you read the press release I just mentioned between the lines, you see that

users will be able to make unlimited Skype-to-Skype calls to any Skype user in Japan and around the globe

Yeah, ok, basically what Skype is for, but let’s read on.

KDDI customers with data plans will also be able to [...] call international phone numbers at competitive Skype Out calling rates.

Nice. But, if you didn’t get it, no mention to Skype Out calling rates for phone numbers in Japan. None. Zip.

So, unlike the Verizon deal where the application lets you call mobile and landline numbers, KDDI’s Skype might well force you to exit it for these types of call. Not very practical, isn’t it?

Skype on Android

So, starting this November, Japan’s second biggest carrier should pre-install the Skype application on all its smartphones (pre-register if interested)

The flagship phone will be Sharp’s IS03. Mobile in Japan’s good friend Steve and I had the chance to play with it at the recent CEATEC in Tokyo.

We both found it to be a very solid smartphone. Of notice is the integration of an e-wallet function, a feature existing on many keitais but not on the iPhone, and the faculty to keep an existing KDDI mobile email address, again something SoftBank was not able to provide with the iPhone (oh yeah, it also has a pimp-your-email decorating function -so important for the teenager market here).

We weren’t able to fully test it, but our limited look at au One Market, a carrier-branded Android app store, left a good impression.

The app will also be rolled-out on the less noticeable IS01, but, strangely enough, no news about Sharp’s IS05 that was announced today, nor Toshiba’s IS04.

Skype on keitais?

While KDDI promises to use Android for all its upcoming smartphones, the future roadmap for Skype and KDDI promises to go beyond Google mobile operating system.

Other phones might get an app too, not unlike what Verizon is offering in the US with LG and Samsung. I’d say not before Q2 2011 though.

But, in a time when DoCoMo is rolling out its Android smartphone with full fanfare, IS03 + Skype might very well be a sweet deal for KDDI.

Skype on DoCoMo?

Yeah, what about DoCoMo? Does it have to reply with an VoIP offering?

Right now, the king of carriers is kinda blunt. Skype is simply banned from its Android-powered devices. It’s as simple as that. And, anyway, none of its Android-powered phones is running 2.1 yet, a pre-requisiste for the application.

But rumors are floating that it is negotiating a similar deal than KDDI’s. Skype with DoCoMo might become true by the end of the year, if you’re of the optimist kind.

As for Softbank, it already allows Skype on the iPhone, but no news on any other front from them. At least, they can be satisfied that Ustream, a company they’ve partnered with and invested in, was used by KDDI for its press conference.

My guess is that things are only getting started on the smartphone front. Oh boy, I love that.

We would like to show that we are (competing in the segment) in earnest and with dedication

Tanaka seems to be up for the battle. Let’s rumble.

Do you like the idea of blogging using your phone and your voice? No more typing in a tiny keyboard. It’s possible using Bubble Motion technology.
After a great success in India, with more than 2 million users, Bubble Motion’s platform of voice blogging announced that it comes to Japan thanks to KDDI.

It’s called Koe-now コエなう, still in beta. Koe in Japanese means voice and “now” written in the Hiragana syllabary as なう (nau) reminds the way Japanese use the informal phonetic version of the English word in twitter. Japanese is a very graphical language and characters can represent much more meaning than the phonetic version. Using なう in the name is a clear way to call the attention of twitter users, whose number is huge in Japan.

koe-now

Celebrities will be the main stream, recording their messages at any moment so their fans can feel more in contact with them. Specially in a country where idols and celebrities have loyal fans.

Will this service try to compete directly with Twitter?
How will KDDI integrate this into other social networks?

More information at コエなう home page

Related sources: KDDI, TechCrunch Japan, Nikkei

To finish with today’s stories about DoCoMo and its smartphone strategy, here’s an interesting poll that MMD Lab ran a few days ago.

Its satisfaction index on mobile carriers is quite revealing. DoCoMo retains the highest percentage of happy customers in terms of cell coverage quality. Almost 85% of satisfied subscribers, DoCoMo can brag about it. KDDI is very close, but SoftBank gets a paltry 52%. If you break down the number and keep only the very satisfied customers, DoCoMo has 26%, just behind KDDI. Softbank is again third. And far. 4.8%. Ouch.

For the design of handsets, you reverse the order. SoftBank gets more than 80% of satisfied subscribers, with DoCoMo just behind at 78.5% and KDDI at roughly 76%. The survey even asked if the clients were happy with their camera. While such a question sounds silly with the staggering number of different phone line-ups, here are the results: KDDI customers are satisfied at 71.2%, DoCoMo at 69.5% and Softbank at 63.2%. Not very significant.

Now, the study gets more interesting since it asked what people would do when the SIM unlock guidelines become reality. Will they switch? The status quo is favored by 30% of those interviewed. Loyalty is a big thing in Japan. Inertia is big worldwide. Remarkably though, the wish of 20% of customers surveyed is to be able to keep their current carrier with the iPhone. That answer, in second place, shows the big draw Apple’s phone gets in Japan. And why Masayoshi, Softbank CEO, is willing to fight to keep it exclusive -going as far as locking its cousin, the iPad.

And, yes, if you break down those numbers per carrier, you get 25% of DoCoMo customers who show iPhone envy. Lots of people would love the iPhone on DoCoMo in other words, if you extrapolate the numbers, that is.

We kinda knew that already, it’s only a survey, but still. It fuels right into DoCoMo current strategy: eyes on the iPad -getting the iPhone is a rumor similar to Verizon or T-Mobile stealing the thunder from AT&T in the US- and the ramping up of its smartphone line-up.

The survey was taken between July 16 and 21 with 2176 interviewees. No details on the statistical method.

For years there has been tremendous interest in using Japanese cellphones in other countries. Recently however, as  development of next generation handsets has stalled within Japan, there’s been growing interest in using foreign handsets in Japan.

In the 2G era, while Japan was protected as a technological Galapagos island, network incompatibility prevented anyone from either using Japanese cellphones abroad or from bringing cellphones for use in Japan, unlocked or not. But with the introduction of the global W-CDMA 3G standard came foreign immigrants in the form of Nokias, HTCs and or course the iPhone.

Both NTT Docomo and Softbank operate on the 2100 Mhz W-CDMA band which is compatible with most of the global 3G network providers around the world so now, most 3G hardware available on the open market is technically able to work in Japan. I say technically because there are still quite a few safeguards put in place by Japanese carriers to prevent both exporting and importing.

One barrier is SIM locks. While there has been quite a bit of discussion lately in Japan on the subject, the fact is that now Japan is one of the most restrictive countries in the world when it comes to locking down of cellphones to a single carrier. Breaking a SIM lock in Japan not only voids your contract and warranty, but is against the law and Japan is one of the few countries that enforces this.  There have been raids on shops that unlock Japanese cellphones. In spite of the recent interest and discussion I am doubtful that this trend will change anytime soon. SIM lock free phones, while not unheard of, have been rare to the point of insignificance, and as such carriers are usually unwilling to assist customers in attaching an “unsupported” handset to their network, even if the phone is a legally unlocked model.  There are no incentives for carriers to modify their business plan and the government is too inclined to the the industry regulate itself.

Luckily there are an abundance of webpages that assist the few brave souls who attempt to go this route with settings and guides on how to use their foreign booty in Japan, but as with all thing, relying on the advice of unknown individuals on the internet is not without risks. For one, there is the danger that the carrier you shoehorn your mobile onto might not be happy to have you as a customer.

Japanese carriers still treat data as a premium commodity. While recently with the arrival of true internet capable smartphone such as the iPhone, reasonable pricing plans have started appearing, these are mostly band-aids on a broken pricing model. I can get unlimited data on an iPhone for less than 5,000 yen a month, but that’s only because I am getting a discount equivalent to the extra amount of my monthly data usage. The raw cost of data is unreasonably high, with a real charge of over $500 for just 100MB of data. Without the discount on my plan, my monthly iPhone bill would be in the thousands or tens of thousands of DOLLARS each month! Of course any unauthorized use of my SIM card can void my discount, so even if you get your imported phone working, you still take a risk that an very unfriendly bill can find it’s way into your mailbox next month.

With so many deterrents standing in the way of consumers, it’s hardly a surprise that you don’t see many off network cellphones around. With the scarcity, of course come yet even higher costs. The few stores that deal with imported goods tend to charge ridiculous import fees. I’ve seen imports going for as cheap as 30% over retail to over 200% from local shops. A better route for many is mail order. There are plenty of websites selling unlocked mobile phones that will ship to Japan. Of course there are plenty of risks with this path as well. Aside from standard complaints of online retailers such as poor customer service, delayed shipments, and even fraud, you also have to deal with international shipping, customs duties, and potentially expensive shipping costs if your phone needs to be replaced. You are also not guaranteed to get the phone working in Japan and have no official support should you have some problem operating your device in Japan.

So why go through the hassle? As someone who has gone this route many, many times, I think it has to do mostly with prestige. The difficulties and additional costs rule out any real practical advantage, but there is certainly something to be said for being the only person in a party with that cool new phone (as I am writing this article in a cafe on my imported iPad). If you can afford to spend a few extra yen on a prestige phone, or are subsidized by a company to do testing of a non-supported phone, it’s always fun to see the surprised expression on someones face when you pull out that mystery device and show off it’s amazing functions. But be prepared to trade emails with online vendors and shipping companies, scour internet newsgroups to get your contraband working, and live in mortal fear of the dreaded DOA shipment.

If you have any success or fail stories involving imported mobiles in Japan, feel free to add them to the comments below.