On Friday, June 14, 2002, at 06:21 , Nick May wrote:
> First thing is - thanks for your long reply.
>
> Keitai-l@appelsiini.net writes:
>> It means that NTT DoCoMo will not get the newest handsets exclusively
>> first and for some time before competitors will also be able to offer
>> them on their networks and thus it would improve competition.
>
> Japanese companies are selling a service (i-mode, for example) - of
> which
> the handset is just one component. That is why they basically do quite
> well - they take responsibility for the user experience from start to
> finish. I have just spent a fair few hours messing around with the
> latest
> sha-mail handsets and the latest 504 handsets - and if Docomo gets the
> latest and greatest handsets it is really not noticeable. They may be
> "technically as handsets" superior, but the "look and feel" is no
> better -
> and often worse. But the handset it just the thing that gets you to the
> content. If that is not compelling, and integrated with the capabilities
> of the handset, the handsets will not sell.
>
>
> Part of Docomo`s PROBLEM of late is that they have focussed on getting
> the
> latest and greatest technology out of the door without creating a
> compelling service to make use of it. FOMA being a prime example of
> this.
> So now they are playing catchup with an OK bit not compelling sha-mail
> handset - and charge a minimum of 2.5 times what J-phone charge to
> send a
> sha-mail. J-Phone concentrates on the basics (add on flash, for example)
> and does it well and cheaply. J-Phone have sha-mail, AU have voice
> quality
> - but what does Docomo have that is compelling? 3D polygon capable
> handsets? Possibly - but that is not exactly setting the world on fire
> yet.
I am not saying that other companies stand no chance in competing with
DoCoMo. But certainly DoCoMo have got an unfair advantage that they do
not deserve, created deliberately by the government. This is a
distortion of the market.
Instead, governments should regulate the market in order to foster
competition, not to help out a formerly government run monopoly.
> So let's talk about competition. Competition is good if it benefits the
> consumer. I bit of competition is excellent - too much, badly handled,
> often leads to an inferior experience for the consumer.
I take the liberty to interpret what you refer to as "too much
competition" as one or few market participants eliminating competition
by whatever means they can find in a given market. In a market where
there is apparent danger of this happening and spinning out of control
fast, government should set a clear regulatory frame work to define the
rules by which all market players have to play so that the market stays
competitive and noone can use their elbows to eliminate competition.
Again, the goal of regulation should be to *foster* competition.
For as long as there are some rules in place by which everybody has to
play, more competition is better.
> The UK rail network privatisation with its splintering of routes and
> carriers springs
> to mind here...
UK rail *operator* privatisation is a very good example that
privatisation does not necessarily mean competition. The UK government
may have had good intentions, but all they have done was to split one
nationwide monopoly into many regional monopolies. The rail operators
are not really competing.
What went wrong there can easily be examined when you compare the UK
system with the Japanese system. In Japan, rail operators are in most
places competing with at least one other operator serving the same end
points. Thus, in Japan, as a rail user I can often choose between two
different companies between the same end points. In the UK, most of the
time I have no choice for a given destination, unless I am willing to
travel along a large diversion which takes longer and due to the longer
distance probably costs more.
I am also not so sure if I like the fact that RailTrack is a monopoly. I
tend to think that allowing companies to build and run their own tracks
would have done a lot of good.
>> Although, admittedly the deeper problem is PDC itself, because it is
>> owned by NTT DoCoMo. Manufacturers have to dance to DoCoMo's music or
>> risk being shut out.
>
> YUP - and as long as that means the user has a better experience of the
> SERVICE - long may it continue.
Have you got anything that would back up your claim ? Why would it
improve the user experience that DoCoMo owns the air interface ? Could
the Japanese not have privatised NTT DoCoMo while at the same time
handing over PDC to ARIB or an NGO. They did so with PHS and had a
tremendous success with that formula. PHS has outperformed the European
DECT virtually anywhere other than the EU and Korea. The EU keeps PHS
out by law (which I dislike and resent just as much as the Japanese
having kept out GSM or CDMA) and the Koreans are probably staying away
from PHS simply because its Japanese.
PHS is a real world example of how Japanese manufacturers can excel in
an international open market if they are allowed to compete with open
standards.
> You have an address at mac.com. You may
> well believe (if not, many other people do) that the mac user experience
> is more compelling - and you can work more quickly, on a mac - even
> though
> other "handsets" (intel boxes) may have faster CPU's. (Let's not get
> into
> powerpc and intel comparisons - the point is that even if intel chips
> were
> always faster, many people would still use a mac because they WORK
> faster
> on a mac.)
The reason why I went to get a Mac has all to do with open standards.
Long before OSX I used Tenon's MachTen OS (a BSD Unix system) on the
Mac. At the time, the only other Unix portable would have cost in excess
of 10000 GBP - remember Tadpole?
These days I have more choice but Apple seem to have sensed that they
were in danger of loosing me as a customer and so they made a new OS and
based it on BSD Unix and open standards, just for me, imagine that :-)
Speed has never been any factor for I don't consider bragging rights
worth paying for.
As far as I am concerned, GSM is the Unix of the mobile phone world.
Although far less proliferated, PDC is somewhat akin to Windoze. And
CDMA, with its Qualcomm controlled air interface is a bit of a hybrid.
Before that background, it would be beneficial for consumers,
manufacturers and the industry as a whole, if Japanese manufacturers
contributed their genuity to one of the "Unix pools" rather than to the
"Windoze pool". ;-)
> I do not give a tinker's curse about whose tune the
> manufacturers are dancing to - but I DO want a decent SERVICE - and that
> is Docomo's, J-Phone, AU's responsibility.
J-Phone would hardly be a serious contender if not backed by VodaFone's
GSM earned cash and experience. And KDDI is rather an example that
speaks in favour of open standards, with CDMA and PHS being the two work
horses there.
>> The example of GSM shows that a standard which is equally accessible to
>> all market participants - service providers and manufacturers alike -
>> benefits the entire industry and end-users through economies of scale
>> and competition.
>
> Er - is this a theoretical statement about what SHOULD happen according
> to
> economic theory - are a statement of what HAS happened - a description
> of
> the market? I have heard these kind of statements before - oh - about
> 12
> years ago - when Mad Maggie and her minions were playing fast and loose
> with British Rail.
dealt with BR further up
> As CJS pointed out - if what you say is true, how come
> we have better handsets in Japan a more compelling and more useful user
> experience?
Do we ? All I can see is toys. Never mind, its probably an age thing. ;-)
>> If the Japanese government had been as wise as the Korean government in
>> the mid 90s when they not only allowed but encouraged the predecessors
>> of KDDI to migrate from PDC to CDMA, they would have forced the entire
>> industry to migrate to CDMA and to do so in a manner that it was
>> compatible with CDMA as it is used anywhere else.
>
> As a consumer, I do not care.
Which doesn not mean that there is no connection between competitive
markets and consumer benefits.
> A blessing for the economy? The Japanese economy needs far more than a
> blessing - it needs an outright miracle. (There is an old joke "What is
> the secret of the Japanese Economic Miracle?" Answer "There is no
> secret -
> it was a genuine bloody miracle. Praise the Lord! (and beg Him for
> another...)") . I am not sure the economic effect would have been all
> that
> great
As they say ... many light hands do a great deal of work.
When there is a so called economic miracle, people always look for the
one big thing that made it possible. Instead, it is the many many little
things, all or most of which went right and in the process created what
may look like a miracle.
Likewise, when the economy is in dire straits, there is no one big thing
that if fixed will turn everything around. Again, it is many many little
things that need fixing. Thus, the more contributing factors (or
blessings) there are, the more of a noticeable effect on the whole there
will be. The argument "This is so insignificant, this won't help us" is
part of the problem, not part of a solution.
> We seem to have gone from discussing SIM cards to whether or not there
> would be benefits from using CDMA. I go back to the main point - as a
> consumer I DO care about the quality of service I am being offered - I
> do
> NOT care about how many handset makers there are if the material I can
> see
> with those phones is not compelling. It is the old "Which is best - two
> channels of BBC broadcasting or 9876 American cable TV shopping
> channels.?" Real choice is the former, not the latter.
You make it look like the quality of BBC programming is a function of
limiting the number of channels. I would disagree with that. If anything
at all, the BBC example would speak in favour of economies of scale,
thus GSM or CDMA.
> So - if there was the kind of competition that you envisage - would the
> user experience and content on Japanese keitai be as compelling? I think
> the answer is no.
There is no reason to assume that a service like i-mode could not have
emerged in a Japan which had adopted CDMA or GSM. In any event, even
DoCoMo admitted that i-mode happened by accident and its success hit
them with surprise.
It would rather seem that i-mode happened despite of PDC, not because of
it. But if it had been build on top of one of the two world standards
the effects would have been more far reaching. Sure, they're building
i-mode on top of GSM in Europe now, but what a waste of resources and
lost time having to do this all over again, the added cost of which is
paid for by whom ? consumers.
> 1) Such a competitive model would imply low or no handset subsidies.
> That
> is a BAD THING. It is bad because it implies lower handset churn. High
> handset churn means getting new tech into users hands quite quickly. not
> just AVAILABLE to users, but actually in the hands of a decent number of
> them. It also gets new users onto the service quickly - with a 1 yen
> phone
> of necessary.
This is fine for as long as an industry is its beginnings. At some point
however subsidies do more harm than they do good. With this line of
argument almost any technology item could be continuously subsidised
from cars to TV sets, even computers.
> So in the long run it costs more - but as a consumer I would rather "pay
> as I go along". Whether that is economically rational or not is moot - I
> place an economic value on being able to do so, and the economists can
> go
> jump.
You may excuse me if I trash this into the hypo-bucket (/dev/null
equivalent labelled "hypocrisy"). Mostly because many times I have heard
this or similar arguments from those who will be the first to get mad at
governments when things don't go in their favour anymore.
There is after all a cost to the economy, not just to the individual.
> You keep making these bald statements. HOW would the be better off? They
> would be paying less for a crappier service? That is not "better off".
Just one example that I remember to have read about simply because it
relates to the field I am working in: roaming. I can't find a reference,
but there was a study about the cost of lost opportunity to the Japanese
economy because Japanese business men can't as easily make use of their
phones overseas as business men from other countries they compete with.
Some people smile at athletes who seem to be on to wishful thinking when
they do such things as a swimmer shaving his head in order to become
more streamlined. How little effect could this possibly have, we'd ask,
but the point is that many light hands do a great deal of work.
A GSM compatible SIM card may seem at first sight like the swimmer
shaving his head, but there are quite a number of benefits that to many
people may surely be far more significant than a color screen on a
phone. For example, the ability to walk into a phone shop and buy any
phone without having to wait for transferring one's old number and phone
book onto the new phone. This is convenient and certainly will be a
contributing factor when purchasing a new phone, at the very least it
would be the removal of an obstacle that is easily removable.
Further, the ability to roam internationally, by simply placing one's
SIM card into a GSM or CDMA handset (GSM compatible SIMs starting to
show up in CDMA handsets). Again, convenient for consumers, as there are
many Japanese who travel overseas. But also a removal of a disadvantage
for Japanese business travellers overseas. Last but not least an
additional service through which Japanese operators can earn incremental
revenue.
Finally, to get back to the roots of this thread, the ability to deploy
software using SIM toolkit or Java SIMcard technologies would certainly
be a significant step to rolling out new services.
It is not like there was no demand and I am trying to find excuses for
an out of the blue idea. Remember, I brought up the SIM card as a
possible solution in direct response to demand out of this forum for a
slot in each phone for software deployment through smart cards.
> I am a bad tempered, skeptical Englishman. I regard nothing as
> perfect -
> starting with the works of Lord God Almighty and working down. The
> Japanese mobile environment is less crappy than the European environment
> from the consumers point of view. Do we pay more for what we have ? -
> probably - but then we HAVE more.
No issues with bad temper (occasional member myself), even less so with
skepticism (always very welcome), but references to the smelly stuff,
like beauty are in the eye of the beholder.
> Well - that is true enough in itself - but 1) in the long term we are
> all
> dead
So why bother with mobile phones - Go to the beach and enjoy the sun or
given that sun is a rare commodity in the country of bad tempered
Englishmen, go to the pub and have a pint of Guinness, then ;-)
regards
benjamin
Received on Fri Jun 14 17:35:46 2002