April 8, 2010 at 11:04 am
My article in Japanese for the Nikkei BP IT Pro [ CTIA 2010 has gone Android ]
It has been 7 years since I lived in Japan or have been fully operational in Japanese. Last November, I visited Japan on a M&A due-diligence project and found the changes to the mobile landscape overwhelming. About one year prior, I was fortunate to be invited by a Canadian Government trade mission on the cross-border business development of the independent music industry and felt that Japan was still locked in the closed internal format wars that separated them from entire planet over the last 15 years. Japan was a leader in the development of the 3G ecosystem, but it was very Japan focused. Companies like Nokia and others attempted to bring in Global 3G products, but it proved to be very costly to reset all the device requirements and to develop a separate category for a Japanese only marketplace.
However, Apple launched iPhone in Japan shortly after via Softbank. Their visionary CEO Masayoshi Son ( an individual with his team that has built an empire on cross-border tech business/platform investing and facilitation such as Yahoo-Japan) championed the existing system with this some what risky proposition at the time. By Sept 2009, the iPhone was exploding in device sales and by the end of the year it was recorded close to 3M subscribers. I saw in one trade journal that Japan was the fastest growing market for iPhone sales per capita and the transformation had begun. The iPhone product was launched very much with the same business model as the rest of the world with a very small launch team just outside of Hatsudai station at the Apple Japan Corporate HQ. By the time I had arrived the market was changing. Techcrunch Japan had just gotten started, and the feeling of the Silicon Alley entrepreneurial spirit had found a way in the Japan mobile space. There were thousands of iPhone apps available for Japanese consumers, and the touch interface just did not seem to matter. I found people proud to put their iPhone on the table in front of them at the local Kissaten ( Coffee Shop) as they chatted with colleagues with one had holding that exotic cup of Java, and the other a Marlboro. I had heard that over 40% of the Apps came from outside of Japan, and it was the first time that the international content industry had just blown through the Japanese system within the comfortable pipeline created by Softbank and Apple.
This experience got me very excited to see that now there was finally an opportunity for Japanese prowess in the mobile industry to start to go global. Yes, this was a platform created by the North American Dev team in Cupertino, but the manufacturing was in China and now the content was coming from everywhere around the Globe in one scalable process. This was a first step in the process for real cross-border development and innovation to begin that surrounded an App ecosystem. Although, 3M is not a large number when we talk about the incumbents of the Japanese system, or is this the full game-changer to the Japanese market, but it was a beginning.
I decided that it would be time for me to start to bridge my consultancy practice over to Japan as my second International country of clients. As of 2007, I had been working with the Finland tech scene and had the opportunity to work with several Finnish companies looking for global strategies and mobile market entry into North America. That pipeline has continued to grow, and we will be visiting Finland at the end of this month on our periodic trade mission.
The mobile content industry has really now gone global with the explosion of the iPhone. It has changed the dynamics of marketing, content delivery and advertising toward the dream all of us had in the mobile industry for many years. 2010 has really the year to define mobile as the transition has begun for media players to treat mobile on equal terms as part of the overall media strategy. This is not just at a country level, but the cross-border international opportunities have really started to accelerate.
I returned back to Japan in January to speak about the cross-border opportunities surrounding North America. In the 10 days I was there, it was apparent that Japan really was my second home, and my 7 years away might have just been too long. My schedule became packed with meetings with a variety of different companies looking at their position for marketing and sales outside of Japan; however, the focus seemed to be on China. It is apparent as a first priority many Japan mobile companies have looked for international expansion with this gorilla neighbor. Over the last 15 years, the US Market had proved to be very difficult for many Japanese companies, and you could probably say that there are less then a couple mobile companies that have really been able to make their US International efforts successful. The odds have not been so great, and with the large market ( today there are over 500M subscribers) , the close proximity and the technology gaps, China is hard to ignore when it comes to the next step in an expansion and an International strategy.
I hope my presentation has some effect, as I compared the opportunities between heading to China and then looking toward North America. The room was filled with start-up CEO’s, Media companies and a variety of others interested in this debate. The presentation went for over 2 hours into the late evening, and I was surprized I was able to bring back for the first time in a long time my dormant Japanese speaking skills for this kind of format. The big discussion points were of course around iPhone, but what I found that was even more profound was the interest in “Android” and the “iPad”.
NTT DoCoMo made it clear that they would be the leaders in bringing this to market. Yes, we all knew that Softbank would follow and that we are now looking at a similar AT&T versus Verizon type of phenomena in Japan with Google and Apple playing tag-team to open up the marketplace ( at least it seems that way?)
Android was key part of my presentation as after being with Nokia for so many years, it felt like Google took the play-book right out of Nokia’s hands and have started to execute on the same dream. Nokia had for so many years tried to bring an open philosophy to the market and the mobile industry, but they just might had been a bit too early. I do not think Nokia has at all run out of steam, but they did pull out of Japan and left a vacuum right when the time was for entry. For Google to compete against Apple and to launch something fresh might have just been the timing for this perfect storm of a teeter-totter like strategy. Of course, Eric Schmidt sat on the board of Apple during the conception of the iPhone strategy, and it only makes one wonder if this was some kind of grand plan in market attack between the two companies at any level.
Well Android looks like it is here to stay, and it has become a powerful force as a Global Open Framework. Apple was able to “blow a hole through the window” and now all the flies and everything can come through. Open is now the flavor of the month, yet Apple keeps coming out with new and exciting products and services that the balance between Open and Closed is still evolving.
I met with a representative from Nikkei BP, and they asked me if I would work with them on different mobile projects around North America effects and the Japanese market. I was even asked to represent them by covering the CTIA event in Las Vegas this last month. I look forward to more and more of these types of project down the road and will continue to fine-tune my writing and evolve my Japanese journalist skills.
I will publish an English version of the article on this blog shortly to follow.