Mobile Phones In Japan With Paul Papadimitriou

SEASON 1 EPISODE 6

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  • On this show, Anthony talks to his former co-host of Bangkok Podcast Greg Jorgensen about the floods in several parts of Thailand. Greg gives a local perspective on how the floods are affecting life in Bangkok.
  • He also talks to Paul Papadimitriou who runs a website covering the mobile phone industry in Japan. They talk about the release of the Apple iPhone 4S in which two companies are now marketing. Previously, only SoftBank had the monopoly of selling iPhones but news that au by KDDI would also be offering it caused quite a stir in the Japanese mobile market.

Flooding in Thailand

Bangkok Podcast host Greg Jorgensen is on the show to give updates about the flooding situation in Bangkok. Many areas located in the central plains of Thailand were hit hard and an economic fall-out is possible because of this. Industrial estates where international companies built their factories were filled with water. Some of these were Japanese companies that had relocated to Thailand after the 2011 Tohoku earthquake. Hundreds of people lost their jobs and the damages is worth millions. While there has also been unusual heavy rain in Bangkok and most people were aware of what has been happening, it was just business as usual at Thailand’s financial and transportation hub.

It seemed that the government is unsure what to do, prompting people to make crazy suggestions just to get rid of the excess water. For more information about the Thailand floods, the hosts recommend following Richard Barrow’s social media accounts. One can also type #thailandfloodeng on Twitter and Facebook to view information and photos about the flood.

Mobile Phones in Japan

The main guest for the show’s topic is Paul Papadimitriou who runs a website Mobile in Japan. He is also the Vice President and Principal Analyst at the tech consulting firm Constellation Research. Paul started writing about Japan’s mobile industry in 2008 after visiting a SoftBank store to buy the iPhone 3G. Back then, there was no instruction in English, clerks did not speak English and his Japanese was very poor. He also did not know what kind of papers to bring. After almost 2 hours in the shop, he finally got the unit and blogged about the process and requirements to get the iPhone as well as what people should expect.

Paul explained that there are 3 mobile carriers in Japan. There is Docomo whose network is considered to be the best all over Japan. This is followed by KDDI and SoftBank respectively. KDDI is said to have a better network than SoftBank, but SoftBank was the first to offer iPhones. With both operators now carrying the unit among its products, will people switch to KDDI? Paul says the speed of SoftBank is very good and that he has no problem with it. But with more smartphones emerging, it would become hard for any carrier to get full data speed.

Anthony then asked Paul which mobile operator is more gaijin or foreigner-friendly and Paul points out SoftBank. It has instructions in English detailing the steps and papers needed to get a mobile phone. While KDDI now also offers the iPhone, their information to get an iPhone is not in English. The SoftBank shop in Omotesando where Anthony ordered his iPhone attracts those in foreign communities.

As for the KDDI and SoftBank’s pricing of iPhones, Paul states that the two do not have a huge difference. It does not also differ from the time when only SoftBank was offering Apple phones. Au by KDDI gives a discount for people to switch from another operator but looking closely at their numbers, SoftBank is a little bit cheaper than KDDI.

The mobile phone operator Docomo still has the biggest network with almost 50 million subscribers. But Paul noted that there are more subscribers than the actual number of people in Japan because some people have 2 phones.

Smart Phones vs Feature Phones

When the iPhone was released in Japan, it was viewed as a foreign phone. It was a great phone with a completely different experience but not completely adapted to the Japanese market. People bought iPhones but held on to their keitai. The normal Japanese phone called keitai has similar features to the iPhone long before it arrived in Japan (hence they were also called feature phones). These keitai or feature phones had access to portals created by Japanese carriers and companies and were solely used in Japan. This set-up enabled mobile carriers to have all the power in shaping Japan’s mobile industry for years. They controlled everything from the specs to the design of the phone, effectively keeping everyone else at bay. Mobile operators created their own systems and rules so they were able to control what kind of phones came out.

While Japan had more advanced phones compared to the rest of the world, these only work in within the country. Feature phones were always ahead: it could pay for items just by touch; cameras and TV were already in high definition. But still, the experience from these phones was not great and largely confined in Japan. Because of this, along with the excitement for the iPhone and gaijins very much willing to buy it, the iPhone gained a market in Japan.

In the beginning, though, some regular services like the train service or weather systems could not be accessed. Systems such as social virtual networks, casual gaming, QR codes were not available on iPhone. The older generation hesitated to take these but the younger generation bought it. The keyboard was also an issue. iPhone needed to invent a keyboard and it was different from the traditional keitai. There were also some legal hurdles and sales numbers were not precise for each country or area. These numbers came in slow also because of loyalty to another carrier and even preference for other phone units such as Samsung. However, these units have also started to look like the iPhone.

Some people still have a hard time switching because it is not Docomo. Docomo meanwhile does not have the same pressure to be successful because the Android iOS still has a market and it also performs well. Some are admittedly anti-Apple or would rather have a phone from Docomo in which they find their process to be easy.

If not a Japanese or resident, it can be very difficult to get data. In Narita airport, a phone and a sim for voice calls are priced low at ¥ 100 per day. If you activate it for data, it can cost up to ¥ 150 per day. There are also many free Wi-Fi spots in Tokyo but one must be a resident before registration. But when one finally gets a phone plan in Japan, data is fast and unlimited. It still quite expensive compared to other countries, indicating that the competition among the carriers is not amplified to bring down the costs. Paul recommends using a small portable WiFi called emobile or borrowing one from friends if one has recently arrived in Japan. He also used his roaming international number for voice calls.

The future of the mobile industry in Japan

Paul expects pure smartphone will take over in 2015, although the keitai may still be around. iPhone was the 1st one to disrupt everything including the traditional model of mobile operators controlling everything. It also breached into Japan’s Galapagos syndrome in which the mobile industry’s development and services differ from the rest of the world.

Still, Japan is good at adapting to these changes, even carrying out its products and culture to influence other countries. It also has a lot to offer in terms of software and content. They might take their time to develop international hits like the iPhone but it will still have a huge market in Japan due to its language. Japan will still be an outlier and its companies understand that it is a very different culture and market. Indeed, the hardware aspect of phones has been disrupted, giving more options for consumers. Hopefully, these would translate to more price wars to bring down the costs in some parts of the world including Japan.

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