WW-118 -- 2004 Trend-Watchers Take Note! New Services and Handsets Drive December's Mobile Market

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J@pan Inc presents the Wireless Watch Newsletter:

W I R E L E S S W A T C H

Commentary on Japan's Wireless World
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Wireless Watch Newsletter
Issue No. 118
Wednesday, January 14, 2004
TOKYO

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CONTENTS

@@ Viewpoint: 2004 Trend-Watchers Take Note! New Services and Handsets
Drive December's Mobile Market

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ICA January 15 Event

PRESENTER: Jeff Funk - Professor of Business at the Institute for
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TOPIC: Key Technologies, Applications and Strategies for the
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Complete event details at http://www.icajapan.jp/
Date: Thursday, Jan 15
Time: 6:30 Doors open (sit-down dinner included)
Cost: 3,000 yen (members), 5,500 yen (non-members)
Foreign Correspondents' Club:
http://www.fccj.or.jp/static/aboutus/map.php
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@@ Viewpoint: 2004 Trend-Watchers Take Note! New Services and Handsets
Drive December's Mobile Market

Throughout early 2004 we have been eagerly awaiting the release of
December's subscriber statistics from the three carriers. We were not
disappointed.

As recently reported and published by the Telecommunications Carriers
Association: The Japanese market added 500,000 new subscribers in
December, reaching a grand total of about 80 million mobile subscribers.
In line with our predictions, the carriers that introduced new services
and devices posted the greatest gains.

KDDI topped the ranks for the third month in a row. In December, KDDI
gobbled up 57 percent of the new subscribers and signed on 600,000 new
cdma-1X subscribers. Half of the KDDI customer base has now switched
to cdma-1X phones, which offer super-fast multimedia downloads and
GPS functionality. During the New Year痴 holidays, we observed legions
of Tokyo day-trippers toting KDDI's latest Hitachi 3G handset.

Vodafone could finally improve upon its relatively weak autumn 2003
performance. Due to its aggressive packet-fee discounts and sexy devices,
Vodafone has the potential to grow by more than 100,000 subscribers.
The company recently launched the Sharp V-601SH phone equipped with a
2 Megapixel camera. The camera is impressive, boasting autofocus and
20x zoom. Vodafone also got its first TV-handset in the market --
but we have yet to see many people showing it off.

Although DoCoMo痴 i-mode subscriber base fell slightly during a single
week in December, it may still post growth for the full month.
(Interestingly, weekly i-mode subscriber growth figures are no longer
published on DoCoMo痴 Web site.)

FOMA is finally gaining momentum at the cost of its 2G subscriber base.
There are almost 1.9 million FOMA subscribers now. The new FOMA subscribers
from last month must have felt a little disappointed when DoCoMo announced
the new FOMA 900i-series.

Sharp, Panasonic, Mitsubishi, Fujitsu and NEC will launch 900i devices
from February onwards. Surprisingly, Sony Ericsson and Toshiba were not
among the handset manufacturers mentioned by DoCoMo. The new phones can
handle 500kB Java applications -- and a preview we saw of a J-League
soccer game was very impressive. Production costs of this richer content
are increasing rapidly.

To satisfy content providers, DoCoMo had to raise the maximum subscription
fee from 300 to 500 yen. The i-menu on the phones can be browsed using
Flash. Furthermore, DoCoMo will finally introduce chaku-uta (MP3 downloads)
on its mainstream phones, and the text-based mail function will be
extended with HTML, enabling mail-magazines to add richer content.

DoCoMo痴 prestige is at stake with the introduction of the second generation
FOMA. The FOMA and i-mode teams have joined forces under the supervision of
Natsuno, and together they will battle to regain prime growth numbers in
2004.

We remain eager to see and report upon these monthly statistics as the year
proceeds.

-- Arjen van Blokland

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================ CONFERENCE ====================
Economist Conferences presents:
FOURTH ROUNDTABLE ON HEALTHCARE REFORM IN JAPAN
Taking the pulse of patient-centred reforms
February 10th 2004, Tokyo

Discuss key issues for IT providers

Assess the business opportunities for IT and Internet providers within
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For information:
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STAFF
Written by Arjen van Blokland; Edited by Roland Kelts
(editors@japaninc.com)

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