Thursday, December 17, 2009
Japan's Galapagos effect on market caps
Low market values do not help big recent public share offerings:
Hitachi raising YEN 250.7 Billion (US$ 2.8 Billion),
Toshiba raising YEN 298.7 Billion (US$ 3.3 Billion), and
NEC raising YEN 115.5 Billion (US$ 1.3 Billion).
Low valuations increase the pressure for change in Japan's electrical sector, and the SANYO-Panasonic merger is an indication of changes to come.
In the "post-Galapagos committee" we are working with some of Japan's brightest leaders on understanding the reasons and on how to drive this change.
Benchmarking Japan's electrical companies - Philips= 1/3 x Hitachi's sales and 2.2 x Hitachi's market cap:

GE= 1.6 x Hitachi's sales and 13.3 x Hitachi's market cap

More in our report on Japan's electrical industries.
Labels: galapagos, ge, hitachi, Japan, panasonic, Philips
Wednesday, February 25, 2009
72.5% of all digital mobile TV on this planet earth is in Japan
How much mobile TV do Japanese people watch on their mobile phones?
In the latest version of our mobile-TV report, we explain in detail our methods to determine that averaged over all of Japan's population of 125 million (including those who don't have a mobile-TV yet), the average viewing time is between 0.4 - 2.3 hours of mobile TV / month. WOW!
Mobile TV 2.0 (OneSeg-2)
Not surprisingly, Japan's media giants are now starting to move, and develop programming specially designed for mobile TV: for example "lunchbox" mobile TV broadcast to mobile phones from 12:00noon - 12:40pm weekdays with news, weather, diet information, summaries of TV shows... it's only a question of weeks or months now in Japan for mobile TV to develop into a totally new advertising and m-commerce medium, and some has started already.
Starting the global mobile internet revolution with i-Mode in February 1999, we can see Japan's leadership emerging in the mobile TV arena. Japan's challenge is to leverage this know-how globally, Japan missed this chance with i-Mode and left the field to iPhone and friends!

72.5% of all mobile phones with digital TV globally are in Japan:
In the same way as with mobile internet (i-mode), Japan is again the global forerunner in mobile TV, together with South Korea.
Labels: business in japan, Japan, media, mobile TV, one-seg
Tuesday, December 23, 2008
Japan trends 2008/2009
Q1: Biggest surprise in Japan in 2008?
- Collapse of Japan's mobile phone handset market (read our blog). In this context the Japanese telecom equipment makers association invited me to give a presentation, which was booked out 2-3 weeks ahead - about 100 Japanese telecom equipment maker managers attended! The General Affairs Vice-Minister / Secretary of State attended.... ( download my presentation here - in Japanese language: "Paradigm shift and opportunities for Japanese mobile phone makers" )
- The dramatic increase of acquisitions by Japanese companies:
* Panasonic's acquisition of SANYO (read analysis in our blog)
* Nomura's acquisition of a big chunk of Lehman Brothers assets (read about a presentation by Nomura's CEO Kenichi Watanabe)
* SONY's acquisition of the outstanding part of SONY-Bertelsmann music
* TDK's acquisition of Germany's EPCOS
* NTT-Data's acquisition of Germany's Cirquent (BMW's IT company)
* Fujitsu's acquisition of the outstanding 1/2 of Fujitsu-Siemens
Q2: Biggest changes for 2009?
* Hopefully LED/Solid state lighting going mainstream to save energy
* Batteries and solar cells in combination starting to replace petrol for cars
* Solar cell battle (between Q-cells, SHARP and others)
Q3: Key topics in Japanese media for 2009?
* Financial crisis and reviving the economy
* Crisis of the car industry - and car industry's paradigm shift
Labels: Japan, technology, trends
ICT trends for Japan
Mobile phone sector
Pushed by the Government the mobile operators changed the business model for mobile phone sales from a straight subsidy model to an installment payment system. As a consequence the mobile phone sales collapsed, creating huge difficulties for Japan's mobile phone makers, but greatly improving the financial results of mobile operators.
An interesting trend is the growth of the "smart-phone" market (Blackberry, HTC-Windows-Mobile phones, iPhone etc.) and mini-PCs, which can be acquired for YEN 1 with subsidy from eMobile.
In this context the Japanese telecom equipment makers association invited me to give a presentation, which was booked out 2-3 weeks ahead - about 100 Japanese telecom equipment maker managers attended! The General Affairs Vice-Minister / Secretary of State attended.... ( download my presentation here - in Japanese language: "Paradigm shift and opportunities for Japanese mobile phone makers" )
Nokia's termination in Japan
On November 27th, 2008, global press announcements announced that NOKIA will stop making mobile phones for Japan's mobile operators with immediate effect. DoCoMo and SoftBank had NOKIA phones in preparation and had already started marketing efforts - these were cancelled a few days after NOKIA's press announcement.
NOKIA had founded the Japan subsidiary on March 3rd, 1989, almost exactly 20 years ago, thus NOKIA has given up entering Japan's mobile phone market after 20 years of efforts. NOKIA will not totally shut down in Japan, NOKIA announced that R&D and procurement will continue, and VERTU announced to enter Japan's market with a mobile vertual network operator (MVNO) model renting network capacity from DoCoMo, and opening own shops.- However the opening of these direct VERTU stores keep being postponed.
NOKIA joins the row of European telecom companies which have given up operations in Japan: Vodafone, Cable & Wireless.
M&A
European company's acquisitions in Japan are currently almost non-existent, including the ICT sector. By far the largest acquisition in Japan by a company from the European/Mediterranian area was not by an EU company, but by the Israeli company Iscar which acquired the Japanese company Tungaloy for around US$ 1 Billion. However, this acquisition was driven by US capital. Read details in our blog here.
In the opposite direction there is a boom of Acquisitions by Japanese companies abroad. For example, TDK acquired the German company EPCOS, Fujitsu acquired the outstanding 1/2 of Fujitsu-Siemens, NTT-Data acquired 72.9% of Cirquent which was a 98% subsidiary of BMW before. SONY acquired the outstanding 1/2 of the SONY-Bertelsmann Music Group from Bertelsmann.
The current trend is definitely a strengthening of Japanese acquisitions in Europe.
The most important issue however are not the acquisition transactions themselves, but the crucial issue will be whether these acquisitions create or destroy value. In many cases the difficulties to overcome "cross-cultural" issues are enormous. Many huge wrecks line the road: Vodafone-Japan, Cable-Wireless-Japan, NOKIA in Japan, or DoCoMo's overseas acquisitions. There are also many success stories - the most impressive and famous one Nissan-Renault, however there are many more. An interesting case in progress is Nippon-Sheet-Glass (now NSG Group)'s acquisition of Pilkington Glass (read about a presentation by NSG's CEO here in our blog).
Labels: ict, Japan, mobile phone, nokia, smart phone, smartphone, trends
Wednesday, December 10, 2008
NOKIA quits Japan - for now...
NOKIA's sales figures in Japan were a well kept secret until last week when several Japanese newspapers wrote that NOKIA sold 200,000 phones during FY 2007: thus NOKIA's market share was 0.39% - after 20 years of market entry efforts.
Considering the disastrous collapse of mobile phone handset sales in Japan, NOKIA's move to quit sales in Japan actually makes a lot of sense. Nothing prevents NOKIA from re-entering Japan again in the future.
Labels: Japan, market share, nokia, sales
Japan's mobile phone disaster

What is the reason for the disastrous drop in mobile phone deliveries?
Until recently Japan's mobile phone operators subsidized mobile phone handsets. Consumers would typically pay YEN 10,000 (about US$ 100) for handsets with built-in digital TV, GPS, movie camera with auto-focus, electronic money and tickets, QR-code reader, and much more, which cost the operators up to YEN 100,000 (US$ 1000) per handset.
Encouraged by Japan's Government, mobile operators recently switched from the subsidy model to an installment plan, while discounting the monthly usage fees.
While previously consumers put YEN 10,000 (US$ 100) or in some cases YEN 1 (1 cent) on the counter to receive one of the world's most advanced handsets, since a few weeks ago consumers are faced with a 2 year installment purchase contract where they pay the full YEN 60,000 (US$ 600) or YEN 80,000 (US$ 800) for a handset in installments of around YEN 3000 (US$ 30) each month for two years. Not surprisingly handset sales dropped into the cellar as shown above (the figure above actually shows the deliveries from manufacturers to mobile operators, not the actual retail sales).
What are the likely consequences?
- continuing consolidation of Japan's mobile phone handset makers li>
- surviving handset makers will push into international markets li>
- operators will push harder for cheaper handsets li>
- operators might return to a modified subsidy model li>
- NOKIA might get another chance in Japan li>
Labels: collapse, disaster, Japan, keitai, mobile phone, sales
Thursday, November 27, 2008
Paradigm change of the global mobile phone business and opportunities for Japanese mobile phone makers
Presentation was fully booked several weeks before the talk, attended by about 100 managers and executives of Japan's telecom equipment makers, and included also the Vice-Minister/Secretary of State of Japan's General Affairs Ministry (MIC), which is responsible for telecom regulation in Japan.
Download the presentation as a pdf-file here (in Japanese language)
Labels: international business, Japan, mic, microsoft, mobile phones, telecom equipment
Sunday, November 23, 2008
The Opaquenes of Japan's social network systems (SNS)
Looks like Western SNS will have difficulties to thrive in Japan's SNS unless they make some adaptations of their Western functionality for Japan - or unless Japanese people change their preferences.
Labels: facebook, Japan, linkedin, mixi, sns
Japan's two worlds: Old Japan vs New Japan
Takeshi Natsuno, one of the three key DoCoMo managers who together started i-Mode and arguably started the world's mobile internet revolution launching i-Mode back in February 1999 gave the keynote discussion. Natsuno shared his very interesting observation, that Japan consists of two markets:
- new Japan = people below 50 years age and
- old Japan = above 50 years age
...and having managed i-Mode (today: 48 million paying subscribers) for almost 10 years Natsuno-san is certainly one of the best to know. (Natsuno-san's main job today is to make Japan's very cute equivalent of YouTube profitable - read more about this in a future issue of our newsletters).
Actually, you'll find a similar observation about old Japan and new Japan in my presentation entitled "New opportunities versus old mistakes: foreign companies in Japan's high-tech markets" which I gave some years ago at Stanford University to faculty, students, alumni and silicon valley managers.- (You can view and download the slides of the presentation below.)
Natsuno-san talking at the New Context conference in Tokyo about old Japan, new Japan, the future of the mobile internet, and the mobile industry. Natsuno-san is one of the three inventors of i-Mode:

Labels: i-mode, imode, Japan, natsuno, sns, takeshi natsuno, youtube
Friday, October 03, 2008
Paradigm change of the global mobile phone business and opportunities for Japanese mobile phone makers
The emergence of iPhone, Android, open-sourcing of Symbian, and the growth of mobile data services are changing the paradigm of the global mobile phone business opening new opportunities for Japanese mobile phone makers. Japan's mobile phone handset makers have missed most opportunities during the first wave of mobile phone opportunities. The developing paradigm change opens new opportunities for Japanese makers. The talk will explain the paradigm shifts and trends of the global mobile phone handset market, and resulting opportunities for Japanese mobile phone makers, and will indicate how these opportunities can actually be realized.
Download the presentation as a pdf-file here (in Japanese language)
Labels: android, Japan, maker, mobile phone, panasonic, sharp
Friday, August 22, 2008
Last 2G phone shipped 8 months ago in Japan

The last 2nd generation (2G) phones shipped in Japan in December 2007. Almost all other countries keep legacy 2G networks running - Japan just switches them off. More in our JCOMM report.
Labels: 2g, 3g, docomo, hsdpa, hspda, Japan, KDDI, mobile phone, softbank
Wednesday, August 20, 2008
Will the iPhone trigger a turning point in Japan's mobile phone industry?
Gerhard Fasol (CEO, Eurotechnology Japan KK)
and
Dennis Normile (Japan Correspondent of SCIENCE Magazine, and FCCJ)
discuss about the future of Japan's mobile phone market.
"Will the iPhone trigger a turning point in Japan's mobile phone industry?"
(Foreign Correspondents' Club of Japan, Tokyo Wednesday, August 13, 2008, 12:00-14:00)
(Photo: Copyright Foreign Correspondents' Club of Japan, used with permission)

Labels: 3g, apple, iphone, iphone 3G, Japan, softbank
Wednesday, June 04, 2008
It's an entirely different story for the iPhone in Japan than anywhere else...
iPhone's main competitors in Japan will be SHARP and KDDI's design series, at least for the forseeable future - an entirely different story than in any other country in the world... read below.

About 25% of the global cellphone market in terms of cash value is in Japan. - Why? Japanese users want a lot more functions (navigation, mobile payment, QR code, mobile shopping, mobile music and video, mobile TV, ...), and are happy to pay much more per phone. Japan is a totally different game: while NOKIA has about 40% of global market, NOKIA's marketshare in Japan is almost zero.
Competing in Japan will be an entirely different story for the iPhone
Japan's cell phone is entirely different than anywhere else in the world - recently some people including Japanese Government officials have used the nickname "Galapagos islands" for Japan's insular and very advanced cellphone market. Indeed, our company in a project for the European Union Government documented in details how Japan's cellphone services are 3-5 years ahead of Europe's, ie a large range of cellphone services common in Japan have not yet been introduced in Europe.
For this reason, while the current 2G iPhone is at the high priced top-end in the US or in Europe, in Japan the 2G iPhone does not even work, because Japan has no GSM and essentially has not been selling any 2G phones any longer for a couple of years now. Many mobile services, which Japanese phone users have become accustomed to, are missing from the current 2G iPhone. Japan therefore will be a benchmark, and we expect that selling the iPhone in Japan together with Japanese customer feedback will help Apple to dramatically accelerate iPhone development. Competing in Japan will make the iPhone stronger we believe.
Labels: cellphone, iphone, Japan, nokia
A European perspective on M&A in Japan
Announcement
Photos of the event
Announcement text:
With the very high EURO and low valuations of many Japanese companies, and with changing attitudes in Japan, now is an excellent time for European companies to start or expand business in Japan.
There are many ways to start or expand business in Japan, and acquiring a Japanese company is one of the paths often selected by European companies to grow in Japan.
Some acquisitions of Japanese companies by European corporations have led to fantastic successes - while others have led to catastrophic failures.
The presentation will discuss the key factors for European companies to succeed in acquiring a Japanese company, and some of the key reasons for failure, based on the speakers 23 years of experience with Japan's high-tech sector.
Labels: acquisitions, business in japan, danish, danmark, dccj, Japan, mergers
Tuesday, November 20, 2007
SoftBank and KDDI win market share

Labels: docomo, Japan, KDDI, keitai, mobile phone, ntt, softbank, yahoo keitai
First half FY2008 results: SoftBank and KDDI profits increase, DoCoMo's trends is downward

The thin lines show linear interpolations of quarterly net profit data. Our extrapolation seems to indicate that DoCoMo's net profit might fall into the red towards then end of calender year 2008 unless drastic action is taken. If current trends continue, SoftBank's net profits might exceed DoCoMo's mid-2008. We expect DoCoMo to take dramatic action before this happens.
Labels: docomo, Japan, KDDI, mobile phone, ntt, number portability, softbank, yahoo keitai
Friday, March 16, 2007
"Help - my mobile phone does not work!" - Why Japan's mobile phone sector is so different from Europe's
Find the summary and photos of the meeting here
Download the presentation here
From the Announcement:
In his presentation, Dr. Fasol will explain the essentials of Japan's mobile phone market, why and how it is so different to Europe's. He will also talk about some of the reasons why it is so difficult for European companies to succeed and uncover opportunities and the keys to success for European companies in this important market.
Labels: docomo, handy, Japan, KDDI, keitai, mobile phone, nokia, softbank
Sunday, January 28, 2007
Mobile subscriptions grow by 5 million in Japan during 2006

KDDI's subscriber gains during 2006 are much bigger than a superficial analysis reveals (see figure above):
KDDI's AU mobile service gained about 4.2 million new subscribers during 2006 - more than twice as many than DoCoMo's cellular service, which gained about 1.8 million new subscriptions.
Currently, KDDI is shutting down it's TuKa 2G service, and DoCoMo is shutting down it's PHS service. Both services together lost more than 2 million subscribers during 2006 - this is a much larger movement than due to number portability introduced on Oct 24, 2006.
KDDI offers both number portability and mobile email portability, and reports surprise that many former low-end TuKa users moved to top-end high-speed WIN (2.4 Mbps) data services.
For KDDI, enticing TuKa subscribers to move to high-end/high-speed AU services was an excellent preparation for number portability, and helped KDDI win in the first stage.
Labels: au, docomo, Japan, KDDI, mnp, mobile, mobile number portability, subscriber numbers, subscriptions, wireless
Friday, December 24, 2004
Scenarios for Japan's mobile eco-systems (for Finland's technology agency TEKES)
Download one of our reports entitled "Scenarios for Japan's mobile eco-systems" from the TEKES website
Labels: eco-system, Japan, mobile, tekes, vamos
Thursday, April 11, 2002
Bio-Nanotechnology in Japan - Impact on Foreign Corporations
Topics in International Advanced Technology of the US-Asia Technology Management Center.
Labels: bio, Japan, nano, stanford university, technology
Wednesday, April 10, 2002
M-Commerce in Japan
Panel Presentation "E-commerce in Asia", on Wednesday April 10, 2002, 8:00-9:30am, organized by the US Department of Commerce and the Illinois District Export Council.
Labels: chicago, department of commerce, Japan, m-commerce
Thursday, March 21, 2002
i-Mode: business models for mobile communications
Attendance: about 50 executives from Portugal's telecom operators, major consulting firms, and IT professionals attended the full day tutorial.
Download and update presentation as a pdf-file
Labels: i-mode, imode, Japan, portugal, wireless business, wireless internet
