WW-69

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J@pan Inc presents the Wireless Watch Japan Newsmagazine:

W I R E L E S S W A T C H J A P A N LITE

Commentary on the Business of Wireless in Japan
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Issue No. 69 (Lite Version)
Monday, August 26, 2002
Tokyo

+++ Noteworthy News
--> Softbank to Expand Wireless Links in Food Chains
--> Access to Provide Major Chinese Cell-Phone Service Provider with
Browser Software
--> Toshiba to Offer Location Information Service for KDDI GPS Phones
--> Japan's Mobile Phone Shipments Increase Again, Thanks to
Camera-Mounted Models

+++ Subscriber Statistics, Corrections, Credits, Administrivia

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

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

--> Softbank to Expand Wireless Links in Food Chains
http://sg.biz.yahoo.com/020823/15/31xp8.html
Source: Nikkei on Yahoo, 24 August

EXTRACT: Softbank will increase the number of relay stations for
wireless LANs (local area networks) to 3,000 by the end of March,
company sources said in the Saturday edition of The Nikkei. Those
stations would offer high-speed Internet access services at
restaurants and other places outside the home and office.

COMMENTARY: In May, Softbank tied up with McDonald's Japan for
in-store WLAN service, and later expanded its web of WLAN alliances to
include Doutor Coffee and Daiei subsidiary Orange Food Court. At least
one McDonald's restaurant (the one in Shibuya beside Bic Camera) is
already up and running with WLAN access under the Yahoo BB Mobile
brand (you can see shots of the restaurant in today's Wireless Watch
Japan Video Newsmagazine). The Doutor deal saw a three-month trial
begin last Friday at six Doutor coffee shops; both partners say they
intend on placing WLAN access points in some 1,600 Doutor outlets
nationwide after the trial. The partnership with Orange Food Court
also got off the ground last week at three locations.

Softbank also has signed deals with Starbucks Japan, Denny's Japan
and others, and is planning to establish more partnerships in the
future. While we applaud all this activity -- and we admire Yahoo BB
for taking on some serious competition in the form of NTT East, West
and Communications (who are all also building 802.11b networks) -- we
still don't think anyone's paid much attention to what the success of
i-mode has taught. Namely, you've got to build a robust, reliable,
cheap network with a solid billing model, roaming and security
well-established. If you lack these, you will fail to attract any
compelling content and your network will end up as a pipeline (if it
succeeds at all) providing connectivity on a commodity basis.
Unfortunately, there is no such thing as data roaming in the cellular
world in Japan, so there's no instructive model on which to base
non-licensed-spectrum data roaming. We wonder who will get it right
first?

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--> Access to Provide Major Chinese Cell-Phone Service Provider with
Browser Software
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=onair/asabt/news/2026
93
Source: Nikkei AsiaBizTech, 23 August

EXTRACT: Access announced that it has agreed with China Unicom, a
major cell-phone service provider in China, to implement its suite of
software products in handsets used for China Unicom's service. Access
will provide the NetFront browser software for viewing contents on the
Internet, as well as email software based on the Internet Message
Access Protocol (IMAP). The software products will be shipped to
several makers in charge of producing and delivering cellular phones
to China Unicom, so that the software will be implemented in handsets
by those makers. The specifications of those cell phones conform to
cdma2000 1x developed by US-based Qualcomm.

COMMENTARY: More interesting news from the little i-mode browser
software developer that could! China Unicom is reported to be China's
No. 2 mobile carrier, and provides services for approximately 50
million subscribers; this deal could be worth quite a lot and help
boost the company's terminal market sales. Despite being the original
i-mode browser supplier to NTT DoCoMo (and still is), Access
reportedly never made a lot of money from i-mode. The terms of the
China Unicom deal look sweeter, since they include additional email
software (Access's Compact NetFront browser has been completely
rebuilt and extended since the early days of i-mode) and the market is
much larger than Japan's.
Bravo for Access!

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

--> Toshiba to Offer Location Information Service for KDDI GPS Phones
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=onair/asabt/cover/202
213
Source: Nikkei AsiaBizTech, 21 August

EXTRACT: Toshiba Corp. and Toshiba Location Information Co., Ltd.
(TLI) announced August 13 that they will begin offering a location
information service for KDDI's au mobile phone service with GPS
capabilities in October. Already, the two companies are providing a
service package of the location information service for PHS phones of
KDDI Group's DDI Pocket Inc.

COMMENTARY: The system will comprise a location information service
(for corporate users to obtain location data via the Internet and
locate salespeople on maps), an e-daily reporting service (for smaller
firms and sole proprietors to discover the location and current status
of their workers such as 'on the road' and 'at a meeting') and an
e-Location service (for individual and family users to locate a
GPS-phone user via PC and Net-enabled cell phone). Notably, the system
will expand the existing au GPS service area nationwide.

One private survey that we saw this spring found that a majority of
respondents, when asked what sort of additional mobile Internet
features they desired in addition to regular mail and Web browsing,
stated "location information" and "maps" to be their first choice.

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

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

--> Japan's Mobile Phone Shipments Increase Again, Thanks to
Camera-Mounted Models
http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=onair/asabt/news/2017
65
Source: Nikkei AsiaBizTech, 19 August

EXTRACT: The Japan Electronic and Information Technology Industries
Association (JEITA) announced the number of mobile phones (cellular
phones, in-car phones and personal handy phones) shipped in June
2002. According to the announcement, the number rebounded to the 4
million mark for the first time in nine months. It was 93.5 percent of
the previous year's level for the same month, though the shipments
registered a year-on-year decline for the 13th consecutive month. With
the 93.5-percent level, the shipment volume can be said to have been a
good result, while new subscribers are decreasing in number.

COMMENTARY: Each time a new technology comes along, the carriers can
give subscribers new excuses for upgrading. In summer 1999, it was
color screens. Later, better sound chips had the carriers competing
based on ring-tone quality. Starting in January 2001, the first
versions of Java gave terminal sales a boost and when DoCoMo's 504i
models came out in June this year (with an enhanced Java environment
and 28.8Kbps download speed), handset sales (for those models) again
jumped.

Cameras are just the latest boost, but are interesting in that you
don't have to be a technophile to appreciate having an onboard cam
that allows snaps to be sent to friends (compared, say, to Java --
where you have to be somewhat of a propeller-head to care that DoCoMo
boosted the scratchpad memory to 100KB). Also, Java and ring tone
technologies depend on content providers (which vary at least somewhat
between the Big Three wireless webs) to deploy cool content, whereas
camera phone users generate their own -- and so it makes sense that
once all three carriers had camera phones, handset sales overall would
rise.
JEITA said celly sales registered a rise for the fourth straight
month, up 126.1 percent from May and estimates that in the three-month
April-June shipment period, camera phones accounted for 30 percent of
the total (most would have been sold by J-Phone, we guess).

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+++ Subscriber Statistics, Corrections, Credits, Administrivia

CLARIFICATION

In the August 13 newsletter, we stated that cellphone subscribers now
number 71.23 million, while there are 5.67 million PHS users. This
report also said that DoCoMo, KDDI/au and J-Phone have 58.6 percent,
17.97 percent, and 17.96 percent subscriber shares, respectively. The
market share of KDDI/au refers only to au users who use the cdmaOne
and cdma2000 systems, and does not include those accessing via Tu-Ka.

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STAFF

WWJ video newsmagazine researched, edited and hosted and email
newsletter researched and written by:
Daniel Scuka (daniel@wirelesswatchjapan.com)
Email newsletter edited by:
J@pan Inc Editors (editors@japaninc.com)

WWJ video newsmagazine produced and edited by:
Lawrence Cosh-Ishii (video@wirelesswatchjapan.com)
in cooperation with Video-Link.com, helloNetworkAsia
(www.hellonetwork.co.jp) and Stellent (www.stellent.com)

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