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Top Stories
Suica smarts cards to integrate into i-mode handsets
Tomi comments on our BIG 5 predictions for 2005 and calls i-mode the "shining example"
Which i-mode handsets will emerge in Australia?
Far Eastone expects to grow faster than market
Batteries get a boost
1. Suica smarts cards to integrate into i-mode handsets
East Japan Railway Company (JR East), DoCoMo, and Sony Corporation announced that they will offer a new service combining DoCoMo's i-mode® FeliCa® smart-card handset and Suica, JR East's smart-card train ticket, from January 2006.
The Mobile Suica® service will enable i-mode FeliCa handsets to be used as Suica cards. A test of the service will begin March 2005 using pilot i-mode FeliCa handsets. Passengers will be able to pass through the ticket gate with the i-mode FeliCa handset.
Until now, more than 10 million Suica cards have been issued. The cards can be used not only to ride trains, but also to make purchases at selected restaurants, convenience stores and other shops inside and outside JR stations.
The significance of the announcement is that the previously released Felica technology is now considered robust and fast and reliable enough to take over from Suica - one of the world's most demanding smart-card applications. Several million people have to get through ticket gates very fast every day using Suica, and few other systems in the world can cope with this pressure. Felica is now considered ready, along with i-mode.
DoCoMo's i-mode FeliCa service combines two advanced platforms: DoCoMo's i-mode mobile internet data service and Sony's FeliCa smart-card platform.
As of February 12 more than 2 million i-mode FeliCa handsets have been sold. FeliCa Networks, Inc., a joint venture established by the three companies, will develop IC chips for the Mobile Suica service and service applications.
FeliCa Networks, set up in January 2004, is capitalized at about Y6.5 billion. Sony holds a 57% stake in the joint venture, NTT DoCoMo has a 38% stake and East Japan Railway Co. holds 5%.
At its launch in January 2006, Mobile Suica customers, in addition to enjoying all current Suica features, are expected to be able to use their handsets to do the following:
- recharge the stored fare and;
- purchase commuter passes anytime and anywhere;
- check the balance of stored fare usage on the screen of the handsets.
JR East is also considering offering the following Mobile Suica services after the launch:
- online shopping with Suica electronic money by the second half of fiscal 2006; and,
- purchase of reserved Shinkansen tickets in fiscal 2007.
Last week Vodafone also announced a deal with Felica Networks to embed a smart-card into their handsets. Vodafone will aim to introduce handsets in Japan with embedded IC chips in October, and ship more than one million such handsets at an early stage, it said. Vodafone has found it difficult to attract new customers due to delays in responding to price competition, releasing new handset models, and expanding network coverage areas and suffered a net loss of 58,700 subscribers in January 2005.
- see the DoCoMo official press announcement.
Comment
2. Tomi comments on our BIG 5 predictions for 2005 and calls i-mode the "shining example"
We were pleased to see Tomi Ahonen pick up on one of our BIG 5 Predictions for 2005, and also finish his comment with a plug for the i-mode alliance.
Our fifth prediction was to expect a major shift in the industry forces and consumer behaviours when "open" dual-mode handsets start to reach the consumer public, rather than being locked away in corporate walls. This will have a massive impact on industry competition and structure, and in relation to consumers they will start to cross-play and group and exchange new information in a clustering location-related and presencing behaviour which kind of makes the "community" become the brand.
Tomi remarked that he and his fellow author of their new book Communities Dominate Brands were constantly bumping into the phenomena of the digitally connected and empowered communities, from bloggers to MMOG gamers to of course the mobile phone "smart mobs."
"...very soon community power will overwhelm corporate marketing departments. Advertising, branding etc will no longer be the same.
We see early examples from Kryptonite to Mazda to Verizon etc. And wonderful successes from OhMyNews in Korea to the Boeing design team etc."
The book will be out in March, and there will be previews, excerpts etc at the publisher website at www.futuretext.com and also Tomi's website of course.
"As to i-mode, it is still the shining example for the whole mobile telecoms industry. If the rest of the world would follow the Japanese model closely, they would attract the best content, the best-paying customers, and build a win-win-win system. Lets hope more of the i-mode wisdom will prevail in the world."
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3. Which i-mode handsets will emerge in Australia?
Since Tesltra's Cyrus Allen said that four of the five of the top-tier brands will be represented in the i-mode line-up for Australia the speculation has been running hot.
The top five are Nokia (33.1%), Motorola (15.9%), Samsung (10.6%), LG (7%) and Sony Ericsson (6.3%). Analysts expect about 800 million handsets to be sold globally in 2005.

As we mentioned in last week's newsletter Nokia has a dominate market share in Australia and it would be loath to put that at risk, even for such a small market. Recent speculation is that Nokia may introduce high-end business-oriented i-mode handsets in Australia.
Motorola just launched its first i-mode handset - the E378i - aimed at consumers. They are also working with DoCoMo, with DoCoMo's investment, to produce business i-mode handsets for the Japanese market.
Samsung has a range of i-mode handsets, encouraged by Bouygues Telecom in France, and also from France we have Sagem which is now promoting itself heavily in the Australian market.
LG has a handset with Cosmote (the LG341i), and leads global 3G phone shipments (22% of 20 million in 2004). Sony Ericsson has a range of MOVA i-mode handsets available in Japan.
The biggest surprise will be the entry of Nokia, and the best surprise would be an up-market model from Sony Ericsson.
Comment
4. Far Eastone expects to grow faster than market
Far EasTone Telecommunications Co Taiwan's No.2 wireless service provider and an i-mode alliance partner, said net income may grow 5% this year due to more stringent cost reductions and synergies following a merger (Far EasTone absorbed KG Telecommunications, previously the local partner to DoCoMo, in a NT$29.7 billion deal in late 2003).
Far EasTone, which has a one-third share of Taiwan's mobile services market, said net income would grow to NT$14.7 billion, or NT$3.79 a share, this year, from NT$14 billion last year.
Revenue will also climb by 5% to NT$68.78 billion, faster than the 2% expansion expected for the overall telecom market here, company president Jan Nilsson told reporters during an annual press gathering.
"Five percent is already respectable growth for stable telecom operators as it is increasingly difficult to count on an expansion in revenue to boost profits in a saturated market like Taiwan," said Stevie Chou a senior analyst with SinoPac Securities Corp.
DoCoMo is providing 3G consulting services to Far Eastone ahead of a 3G rollout this year in which Far Eastone hopes to increase ARPU with the new data services.
5. Batteries get a boost
Always high on the "most wanted" list of handset improvements is battery life. Sony said it has developed a hybrid lithium-ion rechargeable battery having 30 percent more capacity per volume than conventional products.
At the same time NTT (the parent of DoCoMo) announced a prototype polymer electrolyte fuel cell (PEFC) measuring 42 millimeters by 80 millimeters with a thickness of 13 millimeters and a weight of 104 grams. It allows nine hours of conversations on a mobile phone.
Until now, a different type of fuel cell called DMFC, or a direct-methanol fuel cell, has been attracting attention as a possible alternative to lithium-ion batteries, and several companies have been working to develop that type of cell. But the DMFC, which uses methanol as its fuel, has several problems, such as its emission of carbon dioxide during the electricity generation process and its low power density, which makes it difficult to reduce the cell size.
On the other hand, the PEFC, which uses hydrogen as its fuel, does not emit carbon dioxide and can be made small enough for use in mobile phones while maintaining sufficient levels of power, NTT said.
At this same time, the Wall Street Journal is reporting [paid subscription req.] that Nokia has killed its fuel cell battery project.
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