Android in Japan - Levi Shapiro - MediaBizBloggers

The iPhone zooms to 1 Competitors react to declining market share and diminishing ARPU Average Revenue per User by embracing Android Sound familiar Actually this is not the US but Japan Market leader NTT Docomo which turned down the iPhone three years ago is now saying quotKonnichi Waquot to Android Their approach is providing a rare opportunity for Western content companies to penetrate the Japanese market and may be a roadmap for other carriersAndroid the mobile operating system OS from Google is on a tear Because it is free and open source there are now 24 different Android devices available from 61 operators in 49 countries Last month Google CEO Eric Schmidt announced that Android is selling 60000 handsets every DAY At that rate and if Google continues to double sales every quarter we can expect to see 25 million Android handsets this year Most of this market share expansion is at the expense of Windows Mobile Operating System amp12288 Global Market Share Symbian amp12288 432 RIM Blackberry amp12288 199 Apple amp12288 161 Android amp12288 83 Microsoft amp12288 68 LiMo amp12288 40 Linux Others amp12288 02 Others amp12288 16 Source Strategy AnalyticsIn many ways Japan represents a potential future scenario for other countries The mobile sector is saturated with net additions growing at 3 per year Docomo controls 50 of the market KDDI 28 and Softbank acquired from Vodafone in 2006 parlayed its iPhone exclusive to capture 19 of the market Half of Japanese customers pay for unlimited data plans compared to only 25 in the US and more than 90 use the highspeed 3G network In fact Docomo is the world champion in data revenue with over 16 billion in data revenue last year Chetan Sharma Consulting In addition last year Softbank became the first major operator outside of the Philippines to earn more revenue from data services than voiceThis does not mean the transition to dumbpipe has been all cherry blossoms and enka music for the Japanese wireless carriers Willcom the small operator that started the unlimited flatrate phenomenon filed for bankruptcy last month At Docomo aggregate ARPU for FY 2009 plummeted 65 and market share sunk an alarming 11 Throw in a good old fashioned price war led by Softbank and the need for innovation becomes clearDocomo has chosen to innovate through Android To stimulate an ecosystem of worldclass Android applications last month Docomo hosted an Android Developers Workshop in Palo Alto which I attended and helped organize The event united Docomo39s top technical brass with leading mobile content and application developers like Getty Images Reuters MySpace Foursquare Shazam and 15 othersAt the workshop Minoru Etoh Managing Director of Docomo39s Service and Solution Development Department promised support for Western developers and a slice of Docomo39s annual 1 billion RampampD budget This support includes the followingLinguistic translationApplication portingAdaptation for Japanese cultureQA testingIntroductions to experts for quotJapanizationquot of applicationsOperator specific API39s in Q3 2010According to Mr Etoh quotSo far Android in Japan has been calm Though I believe we will see another avalanche to Smartphones when looking at the US Smartphone market share ie 30 and popularity of iPhone among the innovator segment urban 2030 year olds To prepare a new ecosystem with Android Docomo is supporting the Android developer community Our support includes network API39s operator charging systems localization and federation of developersquotEtoh39s view aligns with forecasts from research firm Infinita that Smartphone penetration in Japan will double from 15 to 30 in the next two years In this scenario Android attains 5 million cumulative sales by 2011 catching up to iPhone which has already sold more than 2 million units The process kicks into high gear next month with the world launch of the Sony Ericsson Xperia X10 on DocomoGoogle launched support in Japan for paid Android applications in October 2009 However only a handful of the 30000 Android applications have been ported to Japanese A Google spokesperson chose to view this particular sake cup as half full saying quotJapan has been a strong source of applications on the Android Market and we39re excited to see continued innovation and Android development from Japanquot Docomo recognizes that a robust ecosystem of worldclass applications will not occur without proactive support from the carriersInternational Android developer outreach efforts are being coordinated by Docomo USA President Masaaki Maeda and Adrian Van Meerbeeck VP Research ampamp Strategy Maeda emphasizes that quotIn addition to promoting Docomo39s Android strategy in Japan we have put in place resources and are actively cooperating with local developers to make their Japan launch successful We plan to hold our second Android Developers Workshop in New York in JunequotOne developer working toward implementation with Docomo is Israeli mobile startup Waze DiAnn Eisnor VP Community Geographer for the crowdsourced adsupported community navigation tool says quotwe39re thrilled to be part of a partnership with Docomo a large company partnering with the disruptive startup to break new ground new revenue opportunities and new business modelsquotScott Goldberg Director of Mobile Business Development for MySpace sees Android as a means to gain ground on 1 Japanese social network Mixi quotAndroid is such a flexible platform and provides so many cool features things like desktop widgets live wallpapers quick search box etc You can design and build a frontend on Android that comes at 1100th the timetomarket as building your own platform Android is perfectly tailored to small agile developer shops and large giants like DocomoquotOf course Docomo is not the only market for Android in Japan Number two carrier KDDI will launch the Sharp ISO1 mobile internet device MID in June and link their quotAu One Marketquot to the Google Android Market Integration to KDDI39s billing platform will begin in late August Number three player Softbank will also launch the HTC Android smartphone quotDesirequot later this monthCombined these efforts may create the critical mass needed to support an advertisingbased revenue model Google is betting that giving away its operating system for free to carriers and handset manufacturers will create the userbase needed to expand the Japanese mobile advertising industry beyond the 800 million it generated in 2009Mike Dehm is Vice President of Mobile Business Development for Thomson Reuters quotI personally believe there is room in the Japanese market for multiple business models including advertising Although you need a large audience for advertisers to be interested we have shown you can make money long before 10M users In fact even within one application you can look at multiple business modelsquotAndroid represents a rare opportunity for Western content owners in the Land of the Rising Sun Savvy developers should seriously consider support programs from Docomo and other carriers This could be your chance to become quotBig in JapanquotLevi Shapiro is a Partner at TMT Strategic Advisors a research and strategy firm focusing on the technology media and telecom sectors He can be reached at levishapirotmtstratcom or via twitter levshapiroRead all Levi39s MediaBizBloggers commentaries at Unleavened Media MediaBizBloggersFollow our Twitter updates MediaBizBlogger

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