On Sunday, June 16, 2002, at 11:31 , Nick May wrote:
> clearly. "Matters to the consumer" - not always - no.
>
> If not, demonstrate.
demonstrated already. see example of multi service KDDI - keyword
economies of scale.
> (enthymematic?) conclusions. CDMA was a success because it brought
> something new to the party (decent voice).
The reason why CDMA was there for IDO to choose in the first place comes
down to its openness.
>> PHS
> See above. It does nothing of the sort.
PHS does nothing of what sort ? Sorry I can't figure out what you mean
to say.
> The fact that you admit it has had setbacks in Japan
Well, setback is very much relative, because PHS is still on target when
you look at the original projections. It went well over those
projections in the beginning and then came down to meet projections
eventually. Now it is on target (Yes, I was surprised by that too). But
let's have a look why that was the case ...
PHS did well over target (peak at about 8m) because it was competitively
priced against PDC services. PDC was overpriced due to lack of
competition. PHS was competitively priced due to its economic design.
Then PDC services reduced prices further and further until churn came
under control. This is how consumers benefit from competition. PDC
prices didn't come down on their own - they were forced to come down in
the face of competition by PHS. In the process PDC services became
competitive enough to regain customers that had churned to PHS before
and PHS "suffered" a "relative setback" meeting its target of 6m (down
from 8m).
So, as far as I can tell, everything went beautifully. Fostering of
competition worked just as you would find it in an economics text book.
>> You would find that there is a very steep curve with increasing age in
>> favour of international roaming ability, starting at about age 24, 25.
>
> "ask the people you meet" - well -for a Japan living keitai-l list
> member,
> I suspect this is not a representative sample.
I didn't claim to present any samples. I merely encouraged a personal
experiment. The point is that if you look out for alternative features
that are not presently there and check out if people actually find them
interesting you will find a surprising number of people who do.
The point was that the measurement of "hottest feature" or "this is cute
but this is not" is *arguable* and *not certain*, because you don't
actually know what features will be appreciated before they haven't been
seriously tested in the market. Curt said things like colour screens are
*certainly* hotter than stuff that people in Europe take for granted
which is missing in Japan. I didn't claim to know what can be called
hottest or cutest. I merely said that it is *arguable* and in order to
illustrate this, I offered a process by which you can find out for
yourself that there are a significant number of people who might like
things that are not at present available.
> By "toy phones" I guess you mean one's that can't do roaming?
Not necessarily. When I use the term toy phones I refer to phones which
have mostly features which are falling into the entertainment and play
category as opposed to features which are falling into more traditional
uses or tool category.
The reason why I mention roaming is because that is where my core
knowledge is. But also, I am using phones as business tools and I meet
many people who use phones as business tools. This doesn't mean that I
do not appreciate that there are people who use them for entertainment
and playing. But likewise it doesn't mean that the needs of people who
are not interested in using phones for entertainment and playing are to
be rated less important.
Maybe this is a misunderstanding, but I read your and Curt's comments
such that the needs of people who are interested to use their phones for
entertainment are cool or more important while people who don't are
boring and their needs don't count. All I said was that this view is
arguable.
I have no problem with plenty of toy phones on the market and plenty of
people using them playfully - it's good for the industry, sure. What I
do have a problem with is that people who are different are being
discriminated against and there are very few phones for them. In fact, I
have a problem when *either* group being discriminated against.
I resent the EU keeping PHS out as much as I resent Japan having
crippled CDMA and having shut out GSM. I welcome i-mode on top of GSM in
Europe as much as I would welcome Japan setting up interoperability with
SMS or the introduction of compatible SIM cards.
> Youth has driven the market. But if you look on the shelves now, you
> will
> see phones aimed at the partially sighted and the elderly, with huge
> fonts. Hardly looks like a market sector that is being ignored.
How old are you if I may ask ? You know, not everybody above 30 is
partially sighted or elderly.
>> But that doesn't mean they wouldn't buy differently if what they like
>> was on offer.
>
> Very true - but that is not an earth shattering conclusion. We have
> established that Japanese phones cannot roam easily because of design
> decisions that were taken at an early stage. You claim that those design
> decsions were brain dead and protectionist. This is Japan, I would be
> surprised if they were anything else. But THEN you claim that an open
> source solution would have been beneficial from the start AND YOU HAVE
> SIMPLY NOT DEMONSTRATED THAT.
>
> It is not enough to point out areas where tradeoffs have been made that.
> You have to demonstrate that we would have an equal or superior system
> in
> Japan (from the consumer's point of view) had we taken the European
> route.
In case you still haven't got the message ...
Nick, I am ***not*** propagating that Japan should have taken or should
take "the European route" for Europe has its own protectionism; nor the
US route for consolidation has taken too long in the US. Instead Japan
could have been ahead of both, a driving force as they sure are in other
electronics industry segments and as they need to be given their
reliance on exports.
BTW, speaking of open source, it was but an analogy and all analogies
have their limits - so take it with a grain of salt. However, GSM comes
close to the world of open standards in the sense that it is the only
system with an open standard interface between MSC and BTS/BSC, which
fosters competition between suppliers because operators do not get
locked in to a particular vendor, they can buy switches from any vendor,
even multiple vendors, and choose any other vendor, or multiple vendors,
for the radio gear. Other systems lock operators in (including ANSI-41).
That has resulted in a major reduction of cost both in roll-out and
maintenance and it was a major driver for US operators to adopt GSM. In
this particular aspect GSM had an effect on the mobile industry that is
similar to the effect Unix had on the hardware sector in the IT
industry. In this sense the analogy makes sense. As you can see, this
one has nothing to do with roaming.
As far as "from the start" is concerned, no, that is your
interpretation, I never said that.
Considering when NTT developed PDC, they deserve the benefit of doubt as
they couldn't have known which standard would become dominant. But then
they missed plenty of opportunity to get back on track.
Besides, I think I have described what kind of route I propagate quite
clearly and also, why and where benefits are for customers,
manufacturers and operators. This route could have been taken at various
points and it would have been quite different from Europe:
CDMA in the US 800 MHz band, GSM in the 900 MHz band, PDC in the 1.5 GHz
band and PHS at 1.9 GHz. DoCoMo to hand over the PDC IPR to ARIB.
Regulation demanding standard SIM card and local number portability, so
that end users could easily switch between technologies and handsets and
even operators. In a way this combines the European philosophy (let's
agree on a common platform) with the American philosophy (let the market
sort out which technology is best) and Japan would have been the ideal
place to go that route. For a value added export based economy this
would have been ***the*** model and it would even have paid some tribute
to Japanese philosophy (let's not take any unforeseeable risks here -
let's play save).
> This describes a move FROM a proprietary world to a mixed proprietory
> open
> source one. Yes - beneficial.
Absolutely. And a CDMA-800/GSM-900/PDC-1500/PHS-1900 mixed market would
of course not have started with a bang. It would have taken some effort
to free enough spectrum to make space for CDMA then GSM and migrate
anybody else up to 1.5G, but it could have been done in 1997 when the
government clearly wanted to move away from PDC.
I have been working on the migration scenarios - I know it could have
been done. And the decision to go CDMA was the only choice at that point
because there wasn't enough spectrum for GSM. Trouble was that this
destroyed European PHS, because the decision to withdraw promises for
PHS licenses in Europe (particularly in Germany) came as a European
retaliation against the Japanese for choosing CDMA over GSM. But there
was no way to go GSM first. However, CDMA migration towards 800 MHz
would have gradually freed up spectrum in the 900 MHz to eventually gain
enough paired spectrum in the GSM 900 band. The Japanese lacked the
determination and probably it was torpedoed by NTT. But if such a plan
had been put in place and communicated to the Europeans, NTT would have
got their PHS trial in Germany, so there was a potential bargain.
This could have worked out well both for the Europeans and the Japanese.
PHS would likely have replaced DECT and consumers in Europe could choose
from cheap and plentiful cordless PHS handsets instead of overpriced few
DECT ones. The Japanese manufacturers would have increased their PHS
export market tremendously. The Japanese consumers would have the best
choice of any place. Japanese manufacturers would be strong in the GSM
and CDMA handset export business, possibly even suppliers of radio and
switching gear worlwide (no one else would have a combined homegrown
expertise of both GSM and CDMA). Consumers worldwide would benefit from
Japanese manufacturers being part of the game. Japanese innovations
would have driven the GSM and CDMA standards forward - the scenario that
those standards would have slowed down the Japanese is very unlikely:
first adherence to European or American standards has never stopped the
Japanese to bring innovative products to Europe and America (The limits
of the Compact Cassette standard didn't stop Sony from inventing the
Walkman) and second because there would still be the domestic PDC system
on 1.5G to offer a playground for the Japanese manufacturers, which if
any such innovation was successful would have forced the GSM and CDMA
services to adopt it, setting the precedence for a new addition to the
GSM and CDMA standards.
Sure, this is a bit closer to Utopia than the environment we have today,
but it was by no means out of reach, nor would it be out of reach if the
Japanese government was determined to go for it now. Depending how 3G is
doing, they may yet go that route. But the likelihood of scenarios
wasn't the subject of the discussion. My point was that such an
environment (or even only part of it) would have benefits for consumers,
market participants and the economy as a whole.
> With regards to your Houdini escape act in regards to using a Mac
Just because you assumed that I had different reasons for using a Mac
than I did, doesn't make my motives an escape act. I worked with
mainframes and minis long before there were PCs and even before there
was a Mac. The only reason why I moved away from my BSD Unix workstation
was that I became a perpetual traveller (trust me, it is kind of
difficult to carry a MIPS workstation with a 19" CRT around all the
time). Naturally I was looking for a portable Unix solution but *back
then* (not today) there was no such thing and the only choice was a
*misappropriated* PowerBook with Unix running on top of Apple's
proprietary OS.
Granted, that this is a very untypical reason to choose Mac and I have
at times been criticised by die hard users for not fitting in -
particularly now where there is a Unix based OS from Apple, thus no
reason to run their old outdated and BAD legacy stuff anymore yet I show
no attachment nor nostalgia nor any respect to/for their old OS. I feel
nostalgic about my old BSD MIPS WS which I still have (but don't travel
with) - but not about any Mac I have ever owned.
This is no escape act. These were *my* motives. Other people have other
motives.
> (previous email), it was entertaining enough in itself, but that fact
> that
> one can run multiple operating systems on a Mac does not make it "open"
> and the fact that Darwin is open-source does not make MacOS X open. Or
> do
> you use Darwin from the command line to access your mac.com account and
> read keitai-l?
Ever thought of the fact that the subsystem being open is a huge
benefit ?
What about i-mode on GSM. Once built on top of GSM, it will be less
effort to roll out into other GSM environments. And while GSM is in many
aspects comparable to what open standards are in the world of IT, there
is no reason not to use i-mode on top of it, particularly in the face of
WAP having failed in the market.
The point is to go with product life cycles. And as Gorbachev used to
say "Those who are late will be punished by history".
Today, in the world of IT, operating systems have by and large become a
commodity. In the world of mobile telecomms wireless operating systems
such as GSM or ANSI-41 have by and large become commodities, too.
Once something has become a commodity, it is time to stop messing
around, agree upon standards and harmonise, then let those who deal in
those commodities make them. Don't waste your time re-inventing the
wheel, unless you are in the wheel commodities business.
Instead, it is then time to move on and focus on value added products
and services on top of the commodity building blocks. Japan is an
economy that relies more than anyone else on exporting value added
products and thus for Japan it is essential that market players
understand those business cycles in order not to waste their time in the
commodities business but move on to the next cycle of value added
products.
Yet in the world of mobile telecommunications, Japan has handicapped
itself significantly because they have missed the cycle a few times.
They should have adopted the established commodity of wireless systems
and instead focus entirely on making value added products on top of it.
Apple is a good example of a company who has missed the commodity cycle
for ages and they almost went bankrupt over it. They believed that
making operating systems was still a value added product while it had
long become a commodity. Only very recently have they figured it out and
consequently they abandoned making operating systems, instead used an
off the shelf one and then went about what they are good at: making a
value added product (user friendly ease of use GUI) on top of the
commodity product (BSD).
As time moves on and technology further develops, products that are
leading edge today will become commodities and companies who don't want
to believe that they have lost their leading edge will go bust or be
swallowed by others. Other companies will have planned ahead and keep
their leading edge by making new products that will be the value added
in the future, before those products will eventually become commodities
too. Of course some companies make the commodities, but commodities is a
low margin high volume business - not for everyone. In any event the
whole cycle is perpetual and so it is a constant struggle.
Anyway, 'nuff said. I think you get the idea where I am coming from and
that this is not about roaming nor about copying blindly from Europe or
elsewhere ...
regards
benjamin
Received on Sun Jun 16 21:41:12 2002