WW-54 -- Wi-Fi and LBS

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J@pan Inc Magazine Presents:
W I R E L E S S W A T C H
Commentary on the business of wireless in Japan
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Issue No. 54
Wednesday, May 1, 2002
Tokyo

INDEX

+++ Viewpoint: Wi-Fi and LBS

+++ Noteworthy News
--> Japan's J-Phone to Postpone 3G Service Launch to December
--> J-Phone Puts Off 3G Service to Dec
--> Japan Slow to Accept New Phones
--> KDDI's 3G Mobile Phone Puts Feasibility First
--> DoCoMo Begins 3G Video Streaming Trial

+++ Events (Advertisements)

+++ Sign of the Times
--> J-Phone mail domains
--> German Star Trek i-mode site
--> Activists Urge DoCoMo Boycott

+++ Subscriber Statistics, Corrections, Credits, Administrivia

===========================ADVERTISEMENT=============================
3G Wireless Special

J@pan Inc magazine invites you to promote your company in our July
2002 issue, which will feature a special advertising section focusing
on wireless technology and 3G.

This year, we're teaming up with Wireless Japan -- the only
exhibition in Japan exclusively focused on wireless technology. The
event had more than 26,000 participants last year and is an excellent
opportunity for your company to promote its business to people who
matter.

For more information, call Fabien Brogard Cipriani on 03 3499 2099 or
email: fabien@japaninc.com
=====================================================================

+++ Viewpoint: Wi-Fi and LBS

Today's Viewpoint will touch on two stories: wireless LAN and
location-based services.

After reading last week's news item concerning Wi-Fi (see "More Static
for 3G" in WW No. 53), Jordan Millar, from the strategic projects
office at AXA Life Insurance Japan, commented that short-range
wireless LAN (otherwise known as Wi-Fi) was "never intended to replace
3G." This raises the question of how 3G wireless (W-CDMA and cdma2000)
-- comprising licensed spectra, public networks and big-money cellular
carriers -- has become mixed with wireless LAN-based services
(802.11(b)) -- comprising unlicensed spectra and new possibilities for
all sorts of non-traditional "carriers" to enter the biz.

Clearly, the two are different. But 3G's higher-than-expected spectrum
costs in Europe, the lack of a killer-app (i.e. a guaranteed
money-maker requiring 3G bandwidth), and the lethargy demonstrated by
US carriers in moving to 3G (the only-just-now-getting-started
cdma2000 1X networks notwithstanding) has meant that 3G has largely
been an Asian show so far.

And wireless LAN has a chance as an alternative bandwidth provider
technology. Wireless LAN appears to offer really good prospects in the
short-term for speedy Net access using the hotspot model -- you can
install a chain of low-cost base stations in high-traffic areas, set
up user accounts for access, and then sell time to laptop and PDA
owners who use Compact Flash- and PC Card-format wireless modem cards
to logon in airports, hotels, coffee shops, shopping malls and
elsewhere. In fact, this is precisely what Boingo is trying to do in
the US, and several Japanese players have announced similar plans for
this country.

One really big fly in the ointment, however, is the difficulty, cost
and time required to install the base stations. Sure, the base
stations themselves are cheap, but Boingo and, we suspect, similar
would-be 802.11(b) network operators here are finding and will find
that negotiating with the hotspot landlord (the airport facilities
manager, the hotel chief, the train station guy) takes a lot of time
and requires splitting the already-low revenues.

One of the Boingo guys we spoke with at the CTIA 2002 show in Florida
in March said such negotiations were "time-consuming," but he was
still optimistic. (For more on how the hotspot model can work, see
"Japan Wireless Rocks," J@pan Inc's interview with wireless guru
Richard Siber, in the April issue.)

Further, Millar points out that wireless LAN -- as its name implies --
was primarily designed for home and small office networks; he adds
that, "the 11 Mbps [speed] is a shared connection rate, meaning the
more [users] that are on it, the slower it will be." In other words,
it may not stand up to real-life multi-user demands.

But while the jury may still be out on the business model, adoption of
wireless LAN could be a really interesting paradigm shift from
licensed-spectrum, engineering-centric, telco-controlled wireless to
free-spectrum, low-tech, open-to-any-would-be-provider wireless -- and
Japan will be an interesting test bed for public-access services.

Sure, the more users, the slower the bit rate, but the same problem
applies to cdma2000 and W-CDMA. Besides, no one needs 300 Kbps; all
you really need is bandwidth in the 50-100 Kbps range for mail and Web
surfing. (See this week's Wireless Watch video interview with Indosuez
WI Carr Securities analyst Keiran Calder on how mail is still -- even
after three years of mobile Web hype and the creation of over 50,000
i-mode sites -- the killer app for wireless in Japan.)

As for location-based services, we've been hearing a lot lately on how
the KDDI GPS-enabled phones -- launched in December 2001 -- are
gaining enterprise interest. One source close to KDDI pointed to the
new Tr@Box enterprise-targeted service, to which individual handsets
report their location in real time to a central dispatch tracking
application. The system allows a dispatcher, for example, to input a
customer's phone number, which is used to obtain destination details
and a map from a database; these are then sent to the (closest)
driver. The handset can report its location at arbitrary intervals --
say, every 60 or 300 seconds. Tr@Box provides its service for about
1,000 yen per terminal per month, which is fairly cheap.

And while it only costs about 0.05 yen to obtain a single GPS fix,
frequent fixes can add up, and it can cost up to 6,000 or 7,000 yen
per month in usage fees (payable to KDDI, thank you very much); GPS
access fees on the cdma2000 1X EV-DO system (due to start next year)
should fall to only one-tenth this amount.

Interestingly, the Tra@Box system employs a small Java applet on the
handset (made by Toshiba), which the central dispatcher controls. The
update interval and other parameters can be adjusted remotely by the
dispatcher! The system can also send the driver -- some of whom are
apparently somewhat old-school -- a road atlas page reference and the
grid coordinates if a larger, analog (i.e. paper) map is preferred.

With the trouble 3G is having (see news items below), we wonder who's
working on a combo 802.11(b)-and-GPS system -- now that would be
interesting! Here's a hint: watch for our May 13 Wireless Watch Video
Newsmagazine -- and think "Omron" (definitely a non-traditional
wireless player).

--Daniel Scuka
daniel@japaninc.com

PS. Our apologies for issuing a little late this week due to the
Golden Week holidays. Just try finding a JI editor when you need one!!

PPS. As you'll have noted by now, we're back to good 'ol ASCII text
format. Opinion against the HTML version was approx. 7-to-5 against.
While your opinions are important, the deciding factor was the
(excessive) time required to create and format the HTML version. We
hope to get an HTML version going in the future and will provide a
suitable sign-up, opt-in page when we do so.

===========================ADVERTISEMENT=============================
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EXCLUSIVE ADVERTISING OFFER from ONLY 6,250 yen per month!
The ULTIMATE business resource you cannot afford to miss.
For more information:
http://www.japaninc.com/directory
Fabien Brogard at fabien@japaninc.com, +813-3499-2175 x1709
=====================================================================

+++ Noteworthy News
(Long URLs may break across two lines so copy and paste to your browser.)

--> Japan's J-Phone to Postpone 3G Service Launch to December
http://money.iwon.com/jsp/nw/nwdt_rt.jsp?cat=USMARKET&src=201&feed=
reu§ion=news&news_id=reu-n23201186&date=20020423&alias=/alias/
money/cm/nw
Source: Reuters on iWon, April 23

++also

--> J-Phone Puts Off 3G Service to Dec
http://www.nikkeibp.asiabiztech.com/wcs/frm/leaf?CID=onair/asabt/moren/1...
Source: NikkeiBP AsiaBizTech, April 24

EXTRACT: J-Phone will postpone the launch of third generation cellular
phone service from June to December, The Nihon Keizai Shimbun
reported.

COMMENTARY: This confirms rumors we've been hearing for some time.
Keep in mind that while the reason may rightly be attributable to
technical problems and a delay in confirming the latest W-CDMA
standards, NTT DoCoMo's current experience with FOMA is probably also
not an insignificant factor. Big D is having a tough time getting
people to switch to 3G, and so far, there's no killer app (see news
item below).

J-Phone will, however, launch a test service in June, similar to
DoCoMo's that ran from May though September last year. The company
will sign up 2,000 monitors and provide the handsets for free. All in
all, we couldn't find anyone who was that excited by this news. It
sounds worse than it is, and considering that Vodafone is under
pressure to coordinate the J-Phone W-CDMA system with other pending
W-CDMA rollouts elsewhere, the move is probably prudent. In the
meantime, there's lots of cash rolling in from Sha Mail and Movie Sha
Mail.

--> Japan Slow to Accept New Phones
http://www.nytimes.com/2002/04/22/technology/ebusiness/
22PHON.html?ex=1020139200&en=94fdc87653a4467c&ei=5040
Source: New York Times, April 22

EXTRACT: Instead of running out to buy the latest handset packed with
high-speed video and audio functions, Mr. Fukai, a salesman for Compaq
Computer in Tokyo, is staying with his 2G i-mode phone from DoCoMo.
Although intrigued by a [3G] handset that is part personal digital
assistant, part portable entertainment center, he is satisfied doing
what most cellphone users do: talk and send occasional e-mail. Across
town, Yukiko Asaoka is just as fussy. The small technology company
where she works bought two DoCoMo videophones. But as an office
worker, she finds little that has persuaded her to buy her own
handset. The videoconferencing is fun, she says, but the novelty wears
off. Besides, she is unwilling to spend 65,000 yen for a new handset
when older phones provide many of the same functions. "It's out of the
question," Ms. Asaoka said.

COMMENTARY: Give it time, give it time. There's no doubt: The
applications aren't there; the consumers don't know what to do with
the phones even if they do buy them; and the handsets are still clunky
(some of the 2G i-mode Java models are selling for **more** than 3G
FOMA handsets). But the services and applications won't ever develop
if no one builds the network first, and DoCoMo is probably the only
carrier in the world at this stage that can do it. Big D faces a
compliant investor base, has lots of market sway, can tell the handset
makers what to do, and has plenty of spare staff hanging around to
develop 3G services and products that people will (eventually) buy.

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=====================================================================

--> KDDI's 3G Mobile Phone Puts Feasibility First
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=onair/asabt/fw/181521
Source: NikkeiBP AsiaBizTech, April 22

EXTRACT: On April 1, KDDI launched its 3G service, CDMA2000 1x. The
company aims at gaining popularity by keeping down the prices of
terminals, but not by making users conscious of 3G and the
capabilities it has to offer, but by pursuing a different strategy
from the preceding FOMA of NTT DoCoMo. Nevertheless, technically
speaking, FOMA is not the real rival of 1x. Rather, KDDI is more
conscious of J-Phone, which is fast catching users with its Sha-Mail
service, which can send and receive e-mails with pictures. The most
significant feature of the 1x service is the data communications speed
being doubled from the conventional speed to a maximum of 144 Kbps,
using the existing network of the cdmaOne mobile phone service. While
NTT DoCoMo put much emphasis on FOMA to be a completely different
service from the preceding ones, KDDI employed a totally different
strategy. The 1x is being promoted as an enhanced version of the
ordinary cdmaOne without making much fanfare on the 3G factors it is
embracing. Therefore, the present rival of 1x is not FOMA, but the
PDC mobile phones on the market.

COMMENTARY: KDDI has also launched a camera phone, the A3012CA
(Casio), and a service similar to J-Phone's Movie Sha Mail will be
started this summer. We spoke to a sales staffer at one suburban
KDDI/au sales shop who said the new 3G phones were selling well,
despite the higher cost. Customers were attracted by the data speed,
the cheaper email (EZweb has the cheapest mail of the three big
networks) and the cool handsets. The sales guy was well aware that
KDDI/au had fallen to third place in the wireless Web race, but he was
optimistic that the carrier's better 3G technology -- combined with
GPS and cheaper data costs -- would help turn the tide. Time will
tell.

--> DoCoMo Begins 3G Video Streaming Trials
http://www.bwcs.com/BWCS-News805.html
Source: BWCS, April 25

EXTRACT: DoCoMo has begun trials of a point-to-multipoint video
streaming service called V-Live. The new service will be offered on a
trial basis to registered subscribers to DoCoMo's 3G network FOMA and
to PDA users connected to its PHS network. The company has been
developing the V-Live platform, which uses Real-Time Transport
Protocol and MPEG4 data encoding, since September 2001.

COMMENTARY: The company will offer both open content services
(non-premium live and archived video available from May 15) and
closed content (targeted at corporate users and including items such
as internal training videos, corporate presentations and remote
monitoring); closed content providers will pay to use the system. This
is the first concrete proposal we've seen for launching some sort of
corporate video services. DoCoMo is also running a video content
contest(submissions must be in FOMA-sized 176x144/176x132 dpi format)
to encourage video producers to showcase their ontent and start
thinking about mobile (see http://www.nttdocomo.co.jp/p_s/mstage/).
Grand prize is a not-to-be-sneezed-at 3 million yen! Maybe Wireless
Watch Video should enter...?

===========================ANNOUNCEMENT==============================

WIRELESS WATCH STREAMS!

We now produce a weekly streaming video version of the Wireless Watch
newsletter, courtesy of the media gurus at Video-link.com.
Here's the current program line-up:

Apr. 29 -- Tango Town -- a recently launched J-Sky
wireless Web site -- works as well with Japanese fonts,
characters and data encodings as with English. Is this
a model for multilingual mobile sites on the babble of
baby i-modes in the European multilanguage market?

May 6 -- We speak with a contrarian telecoms analyst who
de-hypes wireless data and wonders, while email is still
the killer app for mobile data , where's the 3G sweet
spot?

We'll post the latest webcast in various streaming formats each
Monday evening, around 17:00 JST.
http://www.video-link.com/wireless/index.asp
=====================================================================

+++ Events (Advertisements)

The International Computer Association (ICA) and the Japan-America
Society are pleased to announce a major joint networking and business
development roundtable event to be held at 6:30PM on Tuesday May 21
at the FCCJ in Yurakucho.

"The Future of Mobile Data Communication Part III"

The event will include an executive networking cocktail party, a
gourmet stand-up buffet and a roundtable expert discussion with some
of Japan and America's top mobile communication specialists.

More information on their agenda is here:
http://www.us-japan.org/jassw/programs/delegations-2002briefings.htm

Tuesday, May 21, 2002
6:15 Doors open, drinks start
7:00 Stand-up buffet
7:45 Round Table starts
8:45 Q&A
9:00 Finish

Yurakucho Denki Building, Foreign Correspondents' Club
http://www.fccj.or.jp/general/map.htm
Cost: 5,000 (yen) members, 7,000 (yen) non-members
Stand up buffet with one drink ticket included, then cash bar.

----

+++ Sign of the Times

--> J-Phone mail domains

Why is spam less of a problem on J-Phone than on i-mode? Well
for one thing, they talk about it less. Another reason is
that J-Sky mail domains are divided according to sales area.
If you are registered in, say, Tokyo, your mail will be sent
from username@jp-t.ne.jp, while folks in the Kansai region
will have an address like username@jp-k.ne.jp. On DoCoMo,
all 32-some-odd-million i-moders use username@docomo.ne.jp,
so i-mode is a bigger and easier target for spammers.

--> At http://i.trekonline.de, you can find a German Star Trek
i-mode site (cool mini-graphic!).

--> And finally:

Activists Urge DoCoMo Boycott
http://www.asahi.com/english/national/K2002042300387.html
Livid over what they term "discriminatory" treatment of non-
Japanese by DoCoMo, two foreigners' rights groups are
calling for a boycott of the mobile phone titan. United for
a Multicultural Japan (UMJ) and Internet-based activist group
The Community are urging people to cancel their DoCoMo
subscriptions until the company stops demanding a 30,000 yen
deposit from new customers who are non-permanent residents.
A DoCoMo spokeswoman said the company was unaware of the
boycott calls, but that its position will not change.

======================================================================
+++ Subscriber Statistics, Corrections, Credits, Administrivia

WIRELESS WATCH EMAIL NEWSLETTER SUBSCRIBERS
2,298 as of April 30, 2002

WIRELESS WATCH VIDEO
Feb 1-28, 2002: 3,796 streams (908 mins/day); 3.2 views/unique
Mar 1-30, 2002: 4,621 streams (1,557 mins/day); 1.75 views/unique
Apr 1-28, 2002: 4,500 streams (1,286 mins/day); 1.5 views/unique

Sample of recent accessing domains:
motorola.com
bellsouth.net
verizon.net
mindspring.com
ericsson.se
philips.com
ameritech.net
swbell.net
nokia.com
mit.edu
telia.com

STAFF
Wireless Watch newsletter and Wireless Watch Video Newsletter
researched and hosted by:
Daniel Scuka ( daniel@japaninc.com )

Edited by:
J@pan Inc editors ( editors@japaninc.com )

Wireless Watch Video Newsletter produced and edited by:
Lawrence Cosh-Ishii ( video@japaninc.com )
in cooperation with www.video-link.com

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Text copyright 2002 Japan Inc Communications KK. All Rights Reserved.
Video copyright 2002 Video-Link.com. All Rights Reserved.