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Thread: Docomo/Android v. AU/Softbank/Apple

  1. #1
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    Docomo/Android v. AU/Softbank/Apple

    http://blog.appannie.com/world-series-of-apps-japan/

    A friend of mine sent me this and now I know why the iPhone didn't end up on Docomo, but I also didn't realize there was a separate battle brewing (segments from article):

    Japan’s Carriers: Gatekeepers with an Increasingly Tenuous Grip on the Market

    The iOS app store ecosystem is disrupting the Japanese mobile industry, as it removes the ability for carriers to control content and weakens their ability to influence phone manufacturers. This is unwelcome news to carriers, particularly to NTT DoCoMo – Japan’s largest carrier – as it challenges long-held, comfortable and profitable strategies.

    Since they cannot control the manufacture and sale of the iPhone, nor can they control the iTunes store, DoCoMo does not partner with Apple. For new devices, they instead focus on Android. This way, they can still influence domestic phone manufacturers while keeping the ability to distribute content through their own platforms.

    On the other hand, KDDI and Softbank – the second and third largest carriers – offer the iPhone, meaning they are happy for Japanese consumers to consume content through the iOS app store instead of the carrier platforms. KDDI and Softbank are giving more power to Apple in the hopes that iPhones will lift them to first place.

    As app stores quickly transform the way consumers access content, carriers are deprived of a once key revenue stream. Carriers must now rely more on device sales to boost revenues, so domestic phone makers such as Sharp, Panasonic, Fujitsu, and Sony Ericsson are working to produce quality Android devices in an effort to defeat the iPhone.


    Apple and Google are changing the balance of power as content control moves into the hands of app stores

    This fight for content control will continue to define Japan’s app industry and it will certainly be interesting to see how DoCoMo’s Android phone strategy will play out in the coming years.

    DoCoMo is now losing more subscribers than KDDI, as their churn rate surpassed KDDI. Softbank has experienced the highest net addition of mobile subscribers over the past year. Clearly, Japanese consumers have developed a taste for iPhones.


    As app stores transform the industry’s power dynamics, the leading carrier creates its own store in a bid to stay relevant

    To continue to maintain control over its own content, DoCoMo launched two new services specifically aimed for smartphones dubbed “dmenu,” a portal for accessing internet-based content, and “dmarket,” Docomo’s own internet market offering videos, music, books, and apps.

    DoCoMo is betting that carrier control of devices and content is the key to winning Japanese consumers. Japan is a complex market with many nuances, so app market observers are watching with anticipation to see how DoCoMo’s wager will turn out. A poor result for DoCoMo could drive even more users to KDDI and Softbank and put their status as the leading carrier at risk.

    iOS and Google Play fight for market share while carriers watch from the sidelines

    KDDI and Softbank are invested in Apple devices, so their strategies are tied to the success of iOS. They are hoping for continued customer demand for iPhones and iPads – these carriers will cede content control to Apple in exchange for subscriber market share.

    DoCoMo’s situation is more complex. It wants the Android platform to win, but doesn’t necessarily want consumers to get used to the Google Play ecosystem. They want consumers to choose Android phones then choose DoCoMo-operated stores to get apps and content.

    Who wins the platform wars in Japan is greatly dependent on how these alliances play out. All are hoping that their bets will align with consumers’ evolving tastes for apps.

  2. #2
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    AU has their own store for Android too, and they strongarm new customers into subscribing to it (free for one day, or pay a ¥3150 cancelation fee if you cancel before your first 24h into your contract; after that it's ¥399/month for a selection of apps which are mostly aimed at Japanese or available for free on the Play Store, with a few apps which may be tempting to buy separately and not really worth the monthly price) lol.

    I think they all realize that the Apple and Google models are stealing control away from them, but they also realize that Android allows them to take some of that back by offering things they can't offer with Apple. So while DoCoMo is playing strong-headed by refusing to cave in to Apple's demands, AU and Softbank are playing both sides, and it's profiting them.

    Seems like the only losers here (besides customers? debatable) are the Japanese manufacturers, who have ever-shrinking R&D teams and rising costs and pressure to compete against foreign (Samsung, Apple) or cheaper (ZTE, Huawei, etc) phone manufacturers, whose presence is being felt more and more strongly in Japanese soil and whose phone features are gradually outpacing Japanese ones. I mean any HTC or Samsung or Apple phone is way better in terms of UI consistency than a Fujitsu or Sharp, though less special and not waterproof, rareliy have Osaifu Keitai, etc.

    Those last few things are, IMO, what's keeping the Japanese manufacturers alive until they can hopefully compete more significantly. It'll be interesting times ahead

  3. #3
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    I don't think that the Japanese manufacturers could have foreseen this radical change in mobile, even 4 years ago when the iPhone was still a joke of a phone, and Android was still in its ugly state of Cupcake (oh, how we've moved on since). I think one of the biggest problems for the keitai industry is the fact that they didn't have to change and innovate for a good part of five years. A a result, the big three just got a little overconfident and comfortable with their phone lineups. I still remember the phones from 2006-2009 where each thing was basically a re-shelled version of itself on a different carrier. Back then they controlled what the hardware looked like, but more importantly controlled how it operated. Fast forward circa summer 2010: There was the Galaxy S and the Xperia X10, and Softbank had recently gotten the iPhone 4. Times have changed. Google and Apple demand control of the ecosystem; they want the information. All AU, Docomo, and Softbank are to these two are dumbpipes. It just took way too long for them to realize it. But still, they want to retain control over both hardware and software. On the hardware side we are seeing form factor convergence. Phones are becoming big monolithic slabs, and that can't be stopped. Gone are the craziness of the SH906i, or F906i, or even the slider form of the D905i of the past. But in terms of software, the Japanese (outside of Sony) can't get their act together with the carriers. As a whole package interface, it is just lacking against TouchWiz NatureUX, Sense, Xperia NXT and Good Old Stock Android. It will continue to be a struggle for these foreign companies though, as they can't get most of the 'keitai' features such a waterproofing, baked in 'osaifu-keitai' (more than NFC), 1-seg, etc. However, this is the last stronghold in the market. With Japan's electronic industry ailing, something will have to give, and I guarantee the carriers won't like it one bit.

    If there's one Japanese company which I see might breakout, its Sony. They have the most potential to be 'Apple' like, and will probably bend over for Google's will. With regards to the iPhone, I don't see why Docomo is still so strong headed; clearly Apple will not give any of the concessions that they want, and they are paying for it.
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