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This chapter appears in the book, Mobile Services in the Networked Economy, by Jarkko Vesa. © 2005, Idea Group Inc.
Chapter VI
Mobile Services
in Japan
Introduction
In the second section of this book, we will focus on the mobile industry in Japan
and Europe, specifically in Finland and the United Kingdom. The goal is to use
the various theories, models, and frameworks described in Section I to
understand why the mobile industry looks like it does today and where the
industry is going. Let us start with a brief overview of the mobile industry in
Japan. The emphasizes is on the word “brief” because the intention is not to go
very deep into the special characteristics of the Japanese way of doing
business; neither does this book offer an in-depth description of mobile
business in Japan — there are far better books and research reports for that.
However, this chapter tries to pinpoint the features that are the most important
for comparison of the business models in Japan and in the two selected
European markets.
Copyright © 2005, Idea Group Inc. Copying or distributing in print or electronic forms without written
permission of Idea Group Inc. is prohibited.
Mobile Services in the Networked Economy 119
Japanese Way of Thinking About Consumer Electronics
According to an old story, in 1936 Konosuke Matsushita, the founder of the
Japanese electronics company Matsushita, saw a poor man take a drink of
water from at tap and realized that this is how consumer electronic products
should be: abundant and available to everyone like water (Ohtsubo, 2004).
Albeit this tale was told in an opening keynote address of a consumer
electronics show in Las Vegas, it captures well the philosophy of Japanese
consumer electronics manufacturers. As Fumio Ohtsubo, the president of
Panasonic AVC Networks Company, explained, everything should flow
naturally, everything should serve a purpose, and everything is connected. It is
important to bear in mind that although manufacturers and service providers
need to focus on product features and technological innovation, consumers
think about these products and services very differently than the industry.
According to Ohtsubo, consumers have powerful emotional ties in the electronic products. As a result of this “emotional bonding,” consumer electronics
companies like Matsushita have realized that in addition to manufacturing
exciting products, they are also “in the business of providing comfort, relaxation, and a sense of well-being — and even escape” (Ohtsubo, 2004, p. 3 ).
This new way of looking at business from a human perspective, or taking “ideas
from life” to develop “ideas for life” as Panasonic phrases it, is crucial for the
success of any consumer-related business, from consumer electronics to PCs,
and from mobile services to mobile content. In the Japanese mobile services
business this philosophy of “ideas for life” and the consumer-centric view of
product and service development are strongly present. Next, we will take a
closer look at the structure and dynamics of the Japanese mobile business in
order to better understand the drivers behind the success of mobile Internet
services in this exciting market.
Facts and Figures About the Japanese Mobile Industry
Few industries offer such a great opportunity to catch a glimpse of the future
as the mobile industry: the El Dorado of mobile business can be found in Japan
(and increasingly in Korea) where the local operators are doing profitable
business with wireless voice and data services. In Japan, over 80% of the users
of mobile phones also subscribe to mobile services. The value of the mobile
service market is estimated to be US$74 billion (Sekioka, 2004). In Japan,
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