By: Don Fujiwara

Yumiko wakes to the alarm on her cell phone. The charm dangling from her keitai is the likeness of Hello Kitty, and it jangles as Yumiko fumbles to disable her phone’s alarm. She strives in vain to stretch away the chill of morning as she begins her day. A day like any other, in which her cell phone, the Japanese term for which is keitai denwa—literally, “hand carry telephone”—will play a large part.

No discourse on evolution would be complete without first mentioning the Galapagos. Recall, how Darwin’s Voyage of the Beagle took him to the Galapagos Islands, where Darwin himself observed how isolation led to some rather unique evolution in the local fauna. It is Japan’s relative isolation—both geographically and culturally—which prompted Kei Shimada, founder and CEO of market analysis firm Infinita, to call it “the Galapagos of mobile.”

As an island nation, Japan is separated from its mainland neighbors by the East China Sea as well as the Sea of Japan, but more important is the over two-hundred years of self-imposed political and social isolation established by the Tokugawa Shogunate in 1603, which ended with the Meiji Restoration of 1868. More than anything else, insularity has shaped the culture and, indeed, evidence of that influence persists even to this day.

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One notable outgrowth of Japan’s unique ethnography has sprung up around the cell phone. In the so-named “keitai culture” the humble cell is king. For over a decade, feature phones in Japan have filled roles Westerners typically ascribe to PCs. So pervasive are cell phones in the daily lives of Japanese that they have taken on something of a “social appendage” status. Keitai sits at the apex of a love triangle with culture on one corner and technology on the other. These three both influence, and are influenced by, each of the others.

So, what challenges or opportunities does keitai present to Japanese mobile carriers? How do they relate to and foster keitai culture, while at the same time, how does keitai influence them? How does that relationship translate to monetization?

Upon casual observation, Japan’s mobile landscape features a tableau of prominent players, much like in the States. However, of Japan’s top three carriers, NTT DoCoMo enjoys a commanding lead with 55 percent of market share. If Japan is the Galapagos of mobile, then DoCoMo is its Giant Galapagos Tortoise. KDDI’s au brand comes in a distant second at 27 percent, trailed by Softbank with 16 percent. Compare this with market shares of the top three in the US—Verizon’s 31 percent; AT&T’s 25 percent and Sprint’s 12 percent. DoCoMo’s predominance owes to NTT’s former monopoly status, which ended in 1991 with the spin-off of mobile unit DoCoMo. The divide between it and competitors, though considerable, has been closing. An August survey conducted by Nikkei BP found KDDI edging out DoCoMo in overall customer satisfaction. Though DoCoMo led the pack in call quality and area of service, KDDI au ranked significantly higher in cellphone cost and in initial and packet charges, while Softbank ranked slightly higher.


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