CEO Sanda had been talking about microSIM since last April & had revealed such a chip was in the work last May. The day has come: mobile virtual network operator b-mobile has announced earlier today it was about to release a microSIM for unlocked iPhone 4 in Japan.

Yes, for any unlocked iPhone 4.

And, well, that would also likely work with an unlocked iPad.

Unlocked. Mmh. Interesting. The problem is that in Japan, both the iPhone and the iPad are locked with SoftBank.

No matter the recent debate about a general SIM unlock in the country, SoftBank won’t bulge. There’s no way you can legally unlock your iPhone in Japan.

Some countries mandate operator to factory unlock (via an Apple software) the device after the end of the contract or after a specified period of time (usually 12 month). Nice, heh? But it’s just not the case in Japan.

So, honestly, what type of market is b-mobile after in all this iPhone envy craze?

First idea that comes to mind, the unofficially unlocked iPhone. Since the handset is only sold through Softbank and not Apple, the market remains tiny. The vast majority of people do not go and hack their iPhones, don’t delude yourselves. Plus, since they’re already paying for a full 24 months contract which started two months ago at the earliest, why would they go fishing for another contract before 2012? And, oh, the practice is illegal in Japan.

Inbound business (and geek) travelers? Unlikely. The information site b-mobile provides is in Japanese only and it wouldn’t, again, be a very interesting market. Not mentioning that it’s only a matter of time until SoftBank starts renting microSIM for those iPhone tourist addicts (see Pietro’s excellent summary of options if you’re travelling to Japan).

So what then? The obvious. Imported iPhones and iPads. Still, there can’t be a vast amount of the former, since it was just released and there was no microSIM available until now in Japan. Note that SoftBank won’t sell SIM-only contracts.
There might be a tad more of imported iPads. Before the Japan launch, you could see a reasonably good number of devices in the hands of Tokyoites (and in some shops in Akihabara with a crazy markup, 20% more expensive than those grey imports in Singapore)

But there too, there’s the fact that it’s illegal. Imports do not come with the technical seal of approval of the ministry of communications. You know, that little printed T on the back of your device. [NB: read the Update at the end of this post]
Not that I see this regulation being enforced anyway, but b-mobile is very aware of it, trust me. Sanda kinda address the issue in this morning’s paper, implying Apple could service imported material. His point: SoftBank has no exclusivity on the sale of Apple products and he’s willing to work with independent importers.

Now, I might be a little harsh on my view there. b-mobile is a small player that doesn’t have to invest too much in equipment since it uses DoCoMo’s network. It doesn’t need to have a very big market to make some interesting profits.

The micro SIM itself is free. It will cost you JPY 3,785 per month (roughly USD 44) or JPY 2,980 per month for data only (presumably for your iPad, and that’s approx. USD 35). You can pre-reserve it here.

[UPDATE, August 6, 2010, 9pm JST] Colm correctly points out, in the comments, that the regulation concerning the technical conformity certification -what I called the little T in my article, for the sake of expediency- are due to be modified. Last March, the Ministry of Internal Affairs and Communications announced that the display of that little T (the certification mark) could be now documented either by printing it on the device itself or through the screen. Check your iPhone 3GS, 4 or iPad, under Settings -> General -> About -> Regulatory and you’ll see a list of certification icons. While I’m under the impression that this modification of the law is not in force yet, it renders my certification point kinda moot, at least in the very near future if no strong opposition is raised. Sorry for my hastiness. It hence now all boils down to the nature of the exclusive deal between Apple and Softbank. Its exact dispositions are unknown, besides that iPhones are not sold by Apple in Japan, but only through the operator. Will “parallel” importers be able to find solid channels for mass imports? Will Apple Japan accept to repair imported iPhones? Will it be legally bound to? The international warranty should apply, but no one is certain. We’ll know soon enough.

There’s been a surge of articles today about NTT DoCoMo, Japan’s largest operator, apparently announcing it would go SIM lock free by next year.

Heck, even its shares were up almost 1.7% at the Nikkei 225 -actually outpacing it.

Much ado about nothing?

We’ll see. The plan is still “under consideration“, it’s unclear if all handsets will be included and what would be the exact conditions.

One thing is for sure though, DoCoMo wants in on the iPhone action. That’s what it’s all about.

Let me jog your memory. Last April, under the freshly-elected DPJ Government, Japan’s Ministry of Internal Affairs and Communications sparked a debate with its intent of rendering the whole mobile industry SIM lock free.

Following that month’s meeting with the big three, the government set a deadline for the public to give it feedback. That was June 23 -and, yes, it’s Japan, you could send your opinion by fax.

It’s all over now. The guidelines for 2011 are about to be finalized. The schedule is not lost on DoCoMo.

But we’re talking about guidelines. Yup, guidelines, not regulation. If you fancy reading the preliminary ones in Japanese, here’s the official document [PDF], but basically, they’re saying one thing: “we’d love it if you could unlock your SIMs, but just love it, right?, we’re not forcing you in any way”.

Hey, did you really think that government would take a stand with KDDI raising its network compatibility issues, Softbank pestering against it -projecting a doomsday with soaring costs in handsets-, DoCoMo being more lenient about customer’s choice and an onslaught of faxes?

Anyway, here are my thoughts: DoCoMo is probably the operator that has the least to lose in such a move. It has the better network, the largest -and very loyal- customer base (around 56m) and it doesn’t have the iPhone -nor the iPad. Yes, I know, some of you hate that thing, but it is shaking the mobile market in Japan: Softbank knows it and is adamant not to let this SIM lock free craze go without a fight.

I urge you to read SoftBankSucks’ coverage of the SIM-lock debate for more: part 1part 2part 3 part 4.

In the end, you have it all. Guidelines, a saturated market, a shaken industry and the battle for the smartphones.

Good drama.

SIM Locked or Not SIM Locked, that is the iPad 3G question in Japan.

In order to get our facts in order, I’m going to recap what we’ve learned so far.

May 8: Softbank keeps iPad SIM Locked

As pre-orders are about to start in Japan, rumors that Softbank was able to keep the device SIM locked in Japan are turning out to be true.

IT media reporting on Softbank press announcement:

ところが、5月8日にソフトバンクモバイルが公表したiPad販売に関する情報では、日本国内のソフトバンクショップやソフトバンクケータイ取扱店で販売されるiPadのWi-Fi+3G版は、ソフトバンクモバイルの3Gネットワークでしか使えないように、SIMロックがかかっているというアナウンスがあった。

translating into

According to information released by Softbank on May 8, iPad wi-fi+3G models sold from Softbank shops will be SIM locked so that they can only connect to Softbank Mobile’s network.

The wording used by Softbank to the media outlets is quite clear: SIMロック

It only mentions iPad sold from Softbank shops since the Apple Store only sells the Wi-Fi versions.

May 10: DoCoMo abandons plans to sell iPad microSIMs

Since Softbank’s relation with DoCoMo suddenly became even more exclusive, DoCoMo announces it backs out from its plans to sell iPad microSIMs.

May 12: iPad in Japan Not Really SIM Locked

Thanks to a Mobile in Japan community member, we are able to report that Steve Jobs contradicts Softbank:

Actually, the version of iPad sold in Japan does accept international SIMs.

May 12: Apple changes its official iPad FAQ, adds to confusion

The official iPad FAQ is changed on that same day (the 3rd edit since it got online) and adds to the confusion, due to what can be described as clever wording. Indeed,

you cannot use a microSIM purchased overseas for an iPad in Japan

can be read in multiple ways.

Our commenters seem to be agree that it means that while abroad, one is free to switch microSIM, the iPad is tied to Softbank microSIM in Japan.

May 15: Steve Jobs says both Apple and Softbank websites are wrong

Kernel Panic gets another clarification from Steve Jobs

Our website and Softbank are wrong, and we are getting them the correct information ASAP. The website should be fixed soon. Sorry for the confusion.

Steve Jobs is basically saying that Softbank employees, mentioned in Gabe Glick‘s original email, should not have been saying the iPad 3G was locked nor that it wouldn’t work with any other microSIM than Softbank’s.

May 15: Wall Street Journal Confirms iPads only work with Softbank in Japan

Thanks to Yukari Iwatani Kane reaching out to Apple for the WSJ, it seems now a certainty that iPads can only be used with Softbank in Japan:

Japanese 3G iPads will only work with Softbank’s 3G service in Japan. But outside of Japan, those iPads are unlocked, so they can be used with SIMs for local carriers in their respective markets. Whether 3G iPads purchased outside of Japan will work in Japan will depend on the roaming agreement that the users’s home carrier has established in the country

May 16: Steve Jobs confirms the Japanese iPad works with international microSIMs

On the following day, Ed Andersen gets the same confirmation from Steve Jobs himself:

It is locked to Softbank in Japan, but you can use any international microSIM.

Only to learn, one email later, that there must be some software SIM lock.

Thanks for the reply. So Japanese 3G iPads are not SIM-locked at all, you are just forced to take out a Softbank contract. Is this correct?

No, not exactly.

May 17: Softbank’s CEO responds

Friend Hideki Francis Onda adds a nail into the coffin with a brilliant post summarizing the iPad in Japan situation.

Son Masayoshi, the operator CEO candidly admits the iPad exclusivity is due to the relative lack of robustness of his network compared to DoCoMo

We are at a disadvantage compared with NTT. We will lose massive customers if we did not lock the Japanese iPads to our network

Interestingly, he adds that he would consider unlocking the device if Softbank can get the 800MHz spectrum.

Softbank has a long history fighting for this band that the government doesn’t want to license again until 2015, but already used by DoCoMo and au/KDDI.

May 18: Apple updates the iPad FAQ for the umpteenth time

The new FAQ wording makes it clearer. In Japan, Softbank only!

3Gデータプランについてよくあるご質問
iPad Wi-Fi + 3GモデルはソフトバンクのSIMカードのみに対応していますか?

日本で発売されるiPad Wi-Fi + 3Gモデルは、日本で使用する場合、iPad向け3Gデータプランを提供しているソフトバンクのmicro-SIMカードのみに対応します。海外で使用する際は、その国で発売されているmicro-SIMカードもご利用になれます。
その他の通信事業者のmicro-SIMカードを使って、日本で発売されるiPad Wi-Fi + 3Gモデルを海外で利用できますか?

日本で発売されるiPad Wi-Fi + 3Gモデルは、日本国内ではソフトバンクの3Gデータサービスのみに対応します。その他の国内通信事業者のmicro-SIMカードには対応しません。海外では、その国の通信事業者が提供しているmicro-SIMカードとデータプランを利用して、日本で発売されるiPad Wi-Fi + 3Gモデルを使用することができます。
micro-SIMカードはどこで手に入れられますか?

直営店のApple Store、またはiPad正規販売店でiPad Wi-Fi + 3Gモデルと一緒にmicro-SIMカードを購入できます。(日本国外で購入したiPad用に、micro-SIMカードを購入することはできません。)

So, what do we know so far?

Any iPad 3G sold in Japan will be tied exclusively to Softbank while in Japan.

Any iPad 3G sold in Japan will have the ability to switch microSIM while outside of Japan (or to roam using Softbank microSIM).

Any iPad 3G bought outside of Japan won’t accept any Japanese microSIM, since Softbank is the sole microSIM vendor (at this point) and won’t sell the SIM & plans without an iPad.

It is unclear how Softbank is SIM locking iPads sold in Japan. A software lock is possible but not confirmed, but Steve Jobs remarks seems to indicate that there is more than a simple country contract exclusivity.

So, yeah, Steve Jobs was right all along: both Softbank’s iPad announcement (and customer relations) and Apple’s website (until today’s modification) were wrong. And misleading I should add.

Follow our complete iPad landing in Japan coverage

The iPad drama continues in Japan.

Since Apple’s CEO promised at launch that the device would be SIM free, long time contributor to our community, Doug Lerner, admittedly quite upset by the situation like many others, took the initiative to send Steve Jobs an email.

And, in one of these nice moments when Steve answers, Doug got this:

Actually, the version of iPad sold in Japan does accept international SIMs.

Here’s Doug original email:

Hi. In the U.S. iPad 3Gs are cool. They are SIM-unlocked, which is great. And the unlimited no-committment AT&T contracts are convenient.

But in Japan we won’t have the option to buy an internationally usable iPad 3G. SoftBank has been given exclusive rights to sell the iPhone 3G, and the unlimited data option at about $35/month requires committing to a 2-year contract. There aren’t any no-commitment unlimited contracts like the $30 AT&T plan.

And what’s worse, unlike the U.S. version, the iPad 3G sold will be SIM-locked! So we can’t get an AT&T microSIM to use during travel in the U.S.!

The reverse is also true. If you are coming from the U.S. to Japan, you can’t get a microSIM card from SoftBank to use your iPad 3G here.

The iPad 3G could be such a cool, internationally usable device. Why isn’t Apple letting it be open in Japan like it is in the U.S.?

Sincerely,

Doug Lerner,
Tokyo


Now look at these two screenshots taken from the official Apple website, more specifically from the iPad FAQ on the Japanese online store:

One is from yesterday. One from this morning. Notice anything different? Yes, Apple Japan does now explicitly states that you cannot use a micro SIM obtained from another country for your iPad.

Kinda contradicts what Steve Jobs just sent by email, no?

What a nice drama. We’ve got Steve Jobs relieving the Japanese iPad users willing to travel and avoid data roaming charges contradicted by a last minute edit on the official iPad FAQ.

Sit down and watch, I’m pretty sure there will be more to that story.

Follow our complete iPad landing in Japan coverage

The last 48 hours have been quite a rollercoaster. Following the announcement of pricing for the iPad in Japan and other global markets, the big question has been “will it be SIM locked”.

From the first announcement by Steve Jobs introducing this “Magical” new product, the announcement that the device would be SIM free has been a big boost for Apple. Sure, no other product on the market uses the micro-SIM standard that the iPad requires, but the possibility that you’ll be able to move your iPad easily to another network in the future should you move or find a better provider was sweet music to those iPhone owners suffering under less than satisfactory carrier restriction. The pricing model made sense. Since the device is wholly unsubsidized by the carrier, the iPad should be portable to any company that can provide a network compatible for it.

But of course, no one was sure if this promise extended to the iPad in other global markets. It is slowly becoming clear that this will not be the case, at least in Japan. While no official statement has been published on either the Softbank or Apple Japan webpage, entries in the iPad order page FAQ posted this morning on the Apple website seemed to imply that the iPad sold in Japan would indeed be SIM Free.

Specifically this section

As it turns out, this is simple a translation of this section found on other international Apple webpages.

You would assume that if you can travel and get a SIM in a country you are visiting, the device would have to be SIM lock free.  Well, you would be right, but in the case, it turns out that the website is wrong. In Japan at least we are getting confirmation that all iPads sold in Japan will be SIM locked to only work on Softbank’s mobile network.

From Impress Watch

“It has been announced that the iPad wi-fi+3g version sold by Apple will be be locked to only use SIM cards from Softbank Mobile.

Apple has also confirmed that “All iPad’s sold will only be able to connect to Softbank Mobile’s network”. No reason or details have been disclosed.”

From IT Media

“According to information released by Softbank on May 8, iPad wi-fi+3G models sold from Softbank shops will be SIM locked so that they can only connect to Softbank Mobile’s network.

Over the next 10 days, many people are expected to stop by the Apple Store to pre-order.  They will be told by Apple staff “Apple iPad sold in Japan are all have SIM locked”. Softbank is Apple’s exclusive partner with for the iPad and iPhone. Basically, all iPads sold in Japan are SIM Locked.

To make matters worse, more news is emerging showing even more draconian controls. Impress Watch goes on to explain that you will not be able to get an iPad compatible micro-SIM from Softbank if you do not purchase an iPad from them. You will not be able to use the Softbank network if you bring an imported iPad sold in another market. They explain this is due to the fact that imported models are not certified wireless devices.

Weekly Ascii backs this up by confirming with both Apple stores and Softbank that

  • No SIM Free iPads will be sold in Japan
  • 3G models will not be sold without a contract
  • Even using micro-SIM from another network will not work on SIM locked iPads
  • You can not make a contract for an imported iPad

What I’d like to know is when did Softbank kidnap Steve Jobs’s dog? Apple is getting nothing from this deal. Softbank is not subsidizing the iPad, except to waive interest fees for people who want to pay for their iPad on a two year payment plan and who sign up to a two year unlimited data contract. iPad customers will not be able to get local pre-paid data SIMs when they travel, and people coming to Japan will also not be able to use their 3G iPads in Japan without paying insane roaming fees. Japanese customers are getting a hobbled product and are not getting anything in return.

To add insult to injury, Apple seems to be pretending that nothing is wrong here. As of the writing of this article, the iPad Pre-order page on Apple Japan’s website still indicates that the iPad wi-fi+3G in not SIM locked. Apple has agreed to let Softbank completely run the show for this product, and Softbank has decided to lock this puppy down.

It will be interesting how Docomo will react to this. Just a few weeks ago, Docomo announced plans to release an iPad compatible micro-SIM with the expressed purpose of capturing some of the iPad market. However Bloomberg is now reporting that those plans are now officially dead in the water. It’s one thing to treat your customers like cattle in Japan. It’s a very different thing to lock out all your competitors from similarly abusing their customers. Especially when that competitor is a psudo-government entity like Docomo.

So what can you do?  Well, if enough people complain before the 28th, maybe something can happen. Nothing seems to be official enough that either Apple or Softbank is willing to just come out and say it publicly. However realistically it;s far to late to change things for launch.  Still, early online response to this is decidedly negative and the dissatisfaction is growing. We can hope that eventually Apple will develop enough of a backbone to stand up to Softbank as they did finally getting permission to sell iPhones in their retail outlets.

Or another option is just to grab an EMobile Pocket wifi and go with an iPad wi-fi model, it’s the solution I have been using for weeks now, and to be honest it works just fine. I can use Maps with no problem, get YouTube in full resolution, download any size app and even use Skype. All with no jailbreaking required.

Follow our complete iPad landing in Japan coverage

That didn’t take long. And didn’t go that far.

After some heavy lobbying from interested parties in Japan, the government kinda backed down on its promise to unlock all handsets in Japan.

In the end, the Internal Affairs and Communications Ministry will let operators decide if they want to unlock their phones or not, at least for the current generations of devices. Final plans of the regulations are expected for June.

The only obligation will be for the operators s to disclose which phones are unlocked in a clear way, in order to offer choice to the public.

The ministry explained its decision by saying it will allow for a test before the next generation of phone are released. The success, or lack thereof, could help it draft a more strict policy, this time possibly dictating a full unlock to the four carriers.
The absence of compatibility among certain networks was also advanced as an explanation on why a full unlock would not profit all customers.

With SoftBank having been voicing the most concerns about the prospect amongst the big four, it’s almost certain that the iPhone will remain locked for the foreseeable future (notwithstanding having its own dedicated SIM card).

Late last month, the Japanese government announced it would start holding hearings about a new law requiring all mobile operators to unlock their mobile phones, loosening up the tie that binds cellphones with their services.

As I expected in my earlier post, carriers are not letting this one pass without a fight.

Hideki Francis Onda reports, in his new CNet blog, that Masayoshi-san, CEO of Japan’s number 2 operator, SoftBank, held a press conference to hammer some points down.

The future of prices

According to him, handsets are bound to become more expensive if unlocked, especially because of a reduction in handset subsidies due to the loss of customer loyalty.

Even in a country that knows a very high customer retention, this threat might find some resonance in a saturated market where sales already saw some disturbances after a new regulation came into force in 2008 providing that subsidies had to be clearly disclosed for the full contract length.

The future of services

More bluntly, Masayoshi implies that the subsidy-free model is the reason why the number 1 handset maker in the world, Nokia, flat-out failed in the country and pulled out.
The incurred money loss would force SoftBank to curb on both services and quality.

This echoes a similar threat made by NTT DoCoMo at the end of March: if the law becomes reality, the company said, special internet and networking services, amongst them the well known i-mode, would be limited.

The mess of frequencies

The different frequencies used by Japan operators are also mentioned by SoftBank’s CEO as a major hurdle that would require investment in order to offer transport between carriers.

The detailed law was not made public yet, but I find it hard to believe operators would actually offer such service if not mandated to. It would obviously shield bankrupt Willcom which uses the incompatible PHS technology from having customers defecting –and, reversing the logic, would lock these customers in for this particular operator.

The silence of handset makers

Recent headlines of the HTC Desire release by SoftBank or Sharp’s ISO1 communicator by KDDI might be showing that Japanese operators are getting into a more internationally compatible foray, but they’re hiding a simple fact: the vast majority of keitais are made by specific manufacturers with specific specs for specific services.

We have yet to hear from them. It would be interesting to see if they’d consider a SIM free Japan as a challenge –a large share of their marketing currently being done by the operators, or as a new opportunity both locally and internationally where they are basically inexistent.

The protection of the iPhone market

Coming back to SoftBank’s case, Hideki Francis makes a good point: the iPhone, successfully sold by SoftBank –estimates put sales at 2.5m, might be an important reason why Masayoshi stepped up his game.

Added to the (somewhat far-fetched) rumor that NTT DoCoMo plans to sell an unlocked micro SIM for the iPad, the thought of having its biggest competitor reinforcing its position and -with recurring chatter of Apple changing its mind on CDMA for Verizon in the US- having KDDI breathing down its neck, is not going down well with SoftBank.

Let’s see how this plays out. This is just getting started.

Image by Danny Choo, CC by nc sa

The newly elected government seems to have some iPad envy. Well, maybe not, but the upcoming arrival of the Apple device in Japan is having some unforeseen consequences -or at least, I’d say, some correlative coincidence.

Mainichi reports that the Internal Affairs and Communications Ministry is reviewing the possibility of asking all Japanese mobile carrier to deactivate the SIM locks that tie their handset to their network.

Traditionally, handset manufacturers develop carrier-specific devices in Japan, making it more difficult for customers to switch operators during contract.

Notwithstanding the relatively historical high level of loyalty of users to their operator, the situation was also one factor often cited for the initial slow iPhone sales.

I don’t know if anyone of you tried unlocking a Japanese phone, but, trust me, I’ve tried asking: the blank stare of the official customer representative when asked about it was priceless. While official software doesn’t exist, a lot of shops offer that service across South East Asia -a secondary market for used Japanese phones (I’ve personally tested one in Manila for my old keitai, worked like a charm, except internet browsing obviously).
The official unlock for iPhones that Apple has to provide in countries where the law forces them to (France comes to mind) would also be welcomed.

It’s actually not the first time that such a change has been considered in Japan. In 2007 already, the same Ministry shelved such plans, officially because internet browsing capabilities were deemed not compatible between operators and would have left users without it when switching SIM cards.

The ministry hearing is due to take place next week, on April 2, and, notwithstanding potential heavy lobbying, the law could become concrete in late 2010 -the policy being mandatory for new cell phones only (i.e. not existing ones).

It will be interesting to see if such policy will actually be able to change the mainstream landscape of the Japanese mobile phone industry.

Will it shake the industry and the operators?

Will the switch practice become mainstream among users?