What stands out in the Japanese mobile market is the fact that innovation is shifting toward business models and marketing tactics as opposed to technical features and functions.
"The explosion of non-official mobile content Websites is causing the sun to set on the i-mode business model of a dominant mobile carrier selling incremental content and services to its user base," says John du Pre Gauntt, eMarketer senior analyst and the author of the new Japan Wireless: Marketing to a Mobile Society report. "Flat-rate pricing for 3G services and a broadening of the scope of industries with a strong interest in mobile services means that mobile marketing and advertising has become all the more important in Japan."
According to Japan's Ministry of Internal Affairs and Communications (MIC), the number of Japanese mobile subscribers has been inching up only slightly over the past year.
In February 2007, Japan passed the 100 million mark for mobile subscribers. Effectively, that means the country is fully penetrated with advanced wireless services and only the extremes of society (the extremely young, the extremely old, the extremely poor) are not served by mobile services.
More important for marketers, Japan's mobile environment is now fully ramped into 3G services. According to MIC figures, the number of 3G subscribers for all carriers now exceeds 60 million.
With full penetration of mobile — and advanced penetration of 3G — wireless captures much of the Internet-based activity of the Japanese public.
eMarketer estimates that approximately 70% of the Japanese population, or 89 million people, is connected to Internet, usually by high-speed connections.
Of that Internet population, mobile just edges out the PC platform as the preferred access device.
"In a sentence, the good news is that marketing has just about trumped technical features and functionality for reaching Japanese consumers," says Mr. Gauntt.
For example, the best-selling handset in Japan at present is Motorola's Razr, a phone that sports neither a video camera nor a mobile wallet, technical features that are standard on most other Japanese models.
"Instead, consumers are attracted to the cultural fashion statement offered by the Razr's sleek physical design," says Mr. Gauntt. "But the Razr story is not simply one of consumers channeling their function fatigue into a 'retro' product. The marketing of the Razr to the Japanese public was a textbook case of integrating celebrity endorsement, social networking, mass media and targeted messaging."
The classic i-mode business that launched the mobile Internet in Japan is declining. Whereas just two years ago the proportion of official i-mode sites ("official" meaning that the customer bought content and/or services through his or her DoCoMo billing relationship) vs. non-official mobile sites was about 70-30 in favor of the former, the ratio has flipped circa 2007. Now, the prevailing trend for new mobile Websites as well as consumer time and money is for the non-official experience.
"Japan's situation is well advanced compared with mobile markets in North America and many parts of Europe, where the primary value proposition seems to revolve around a singular technical niche, such as the music phone, TV phone or e-mail phone," says Mr. Gauntt. "Yet all major advanced markets seem to be converging toward a kind of maturity beyond novelty features."
Summing up, Mr. Gauntt says, "Being among the first fully converged, fully mature media societies, Japan offers marketers a valuable lens for benchmarking where they are heading."
Look into the future, today — read eMarketer's new Japan Wireless: Marketing to a Mobile Society report.
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