MMW-95 -- KDDI Takes On The iPod in Japan

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J@pan Inc Magazine Presents:
M U S I C M E D I A W A T C H
Commentary on Japan's music technology news
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Issue No. 95
Wednesday, March 15, 2006
Tokyo

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CONTENTS
++ FEATURE: KDDI Takes On The iPod in Japan
++ NOTEWORTHY NEWS:
** Kyocera Offers Music Player as Option for New Willcom Phone
** Viacom International adds BMG Artists to EZ Channel Program
** New LISMO Phone Released
** MTI Sells CDs and Tickets on music.jp ringtone site
** Targus Releases Portable Speaker Unit for iPod

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++ FEATURE: KDDI Takes On The iPod in Japan

With the start of KDDI's new LISMO service last January, we
are seeing a new line of music phones come to market together
with a business model that is very similar to that of Apple
Computer's iPod + iTunes combination. KDDI has consolidated
the music player software across its new handsets and
provided PC software for managing music, photos, email and
calendar. It has announced the upcoming opening of its own
online music store. One of the new LISMO phones (the Toshiba
W41T) features a 4GB hard drive.

So is this a direct assault on Apple's domination of Japan's
digital music player market?

In some ways, yes. However, even in Japan mobile phones still
have a long way to go before they can really compete with
high-end dedicated music players. In terms of a point-by-point
comparison, it is beneficial to consider three types of
dedicated music players: high-end (such as a 30GB+ iPod),
mid-range (iPod nano), and low-end (iPod shuffle). Here we
present a direct comparison between LISMO phones and these
three types of players for various music-playing features.

** Storage Capacity
While these phones are still no threat to the high-end iPods,
they are now very comparable to an iPod shuffle in terms of
storage space. The W41T is capable of holding around 2,000
songs, putting it on par with an iPod nano.

Our picks:
High-end: iPod
Mid-range: iPod
Low-end: draw

** Library Management Software

One of the things that first impressed me about iTunes was
the ease with which it finds existing music files on the PC
and transfers them to the player. LISMO phones come with a
software suite called 'au Music Port'. In addition to copying
CDs and managing your song library, this software can also be
used to manage photos, videos, personal data, calendar and
email. However, it is unable to port any type of existing
music files to the phone, and files that are created from CDs
are in HE-AAC format with KDR extension. There is no support
at all for files in MP3, WMA or AAC format. While this is no
doubt the result of heavy DRM requirements, from the
perspective of a user, it is a fairly big drawback.

Our picks:
High-end: iPod
Mid-range: iPod
Low-end: iPod

** Purchasing Songs

While KDDI's online DuoMusic Store will not open until next
month, it has been announced that music purchases will appear
on the monthly phone bill, without the need for a credit card.
Combined with the OTA download capability of KDDI's existing
chaku-uta full service, the wireless carrier has definitely
got the edge here, especially given that credit card use is
still not as common in Japan as elsewhere.

Our picks:
High-end: LISMO
Mid-range: LISMO
Low-end: LISMO

** User Interface

KDDI is the first wireless carrier to consolidate its music
player software, essentially forcing all manufacturers to
conform to the same spec. The result - 'au Music Player' - is
impressive. While I am still a fan of the iPod interface
for navigating songs, the au Music Player is not far behind,
and is in fact easier to use than an iPod shuffle.

Our picks:
High-end: iPod
Mid-range: iPod
Low-end: LISMO

** Playlist Features

I was pleasantly surprised at how easy it was to create
playlists directly on the LISMO phones. At the same time, though,
the player imposes some silly restrictions on these lists. The
maximum number of songs in a list is limited to 30, and
the title of the list must fit within 20 characters.

Our picks:
High-end: iPod
Mid-range: iPod
Low-end: LISMO

** Other Content

With all kinds of video content and a wealth of available
podcasts, the iPod definitely has a leg up here in the high-end
of the market. Still, there is quite a bit available to LISMO users,
including EZ Channel, EZ TV, EZ FM, games, and everything else
that makes up the massive Japanese mobile content market.

Our picks:
High-end: iPod
Mid-range: draw
Low-end: LISMO

** Community Features

With LISMO and its 'uta-tomo' features, KDDI is pulling out all
the stops in viral marketing and 'music-based' social networking.
The au Music Player uses GPS to let you know, for example, what
other people within a vicinity of a few kilometers of you are
listening to. There is even a ranking of songs for your physical
location based on what is being played nearby. You can make public
your own profile, blog and playlists, and you can easily find
others with similar tastes. While I look at a lot of this stuff
and think 'Not exactly something I would do...', the fact is that
there probably are quite a few Japanese teenagers who WILL do it.

Our picks:
High-end: LISMO
Mid-range: LISMO
Low-end: LISMO

So, while the LISMO phones still pose no real threat to the iPod
nano or the high-end music players, there is certainly room for
competition right now at the low-end of the market in Japan.
While most Japanese iPod users in Japan are in their late 20's
and 30's, KDDI seems to be targeting teenagers first, most of
whom are learning about non-ringtone digital music for the first
time, know little of file-sharing, and don't have $300 to spend
on a dedicated music player. Look for KDDI to actively court this
group in its promotional campaigns over the next few months.

++ NOTEWORTHY NEWS

** Kyocera Offers Music Player as Option for new Willcom Phone
In brief: On Feb. 27, Kyocera began selling its new WX310K Willcom
PHS phone. The new model features an optional music player
application that uses JustSystem's 'BeatJam for WX310K' software
to transfer ATRAC3plus, ATRAC3 and MP3 files from the PC. A license
key for the music player costs 840 yen (US$7.30).
Source:
http://www.kyocera.co.jp/prdct/telecom/consumer/wx310k/

** Viacom International adds BMG Artists to EZ Channel Program
In brief: Starting April 5, Viacom International will begin
offering music video and artist video comments from BMG Japan
artists on its 'Flux Yougaku' program for EZ Channel. These
programs are typically a few minutes in length and use SMIL
technology to synchronize video, images and text. A
subscription to program costs 210 yen ($1.80) per month.
Source:
http://plusd.itmedia.co.jp/mobile/articles/0603/09/news110.html

** New LISMO Phone Released
In brief: On March 3, KDDI released another LISMO phone.
Kyocera's W41K features the 'au Music Player' and full support
for the EZ FM radio application and the au Listen Mobile Service.
In addition, the charger for the W41K includes a built-in
woofer speaker for music playback while the phone is charging.
Source:
http://www.kddi.com/corporate/news_release/2006/0302a/index.html

** MTI Sells CDs and Tickets on music.jp ringtone site
In brief: MTI announced last week that it has begun offering CDs,
DVDs and concert tickets for sale through music.jp's mobile sites.
The new service is called 'music.jp shop', and will be featured
first on the 'music.jp torihoudai' site. Soon after, the service
will also be offered through the 'music.jp' mastertone site.
Source:
http://k-tai.impress.co.jp/cda/article/news_toppage/28154.html

** Targus Releases Portable Speaker Unit for iPod
In brief: Targus Japan has announced a portable docking station
for the iPod. The 'Music N Dock' features two 2.5 cm speakers
on each side and a carrying handle. The speaker unit will go
on sale March 18 at a price of 13,000 yen (US$113.00).
Source:
http://www.targus.com/jp/product_details.asp?sku=AEM02JP

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STAFF
Written by: Steve Myers
(steve@thetamusic.com)

(C) Copyright 2006 Japan Inc Communications KK. All Rights Reserved.