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The i-mode phenomenon

i-mode's popularity has rocketed since its launch in Japan in 1999. CK Mah looks at its success and asks if the same deal can be repeated elsewhere

i-mode has attracted over 28 million subscribers in Japan alone.

i-mode is the new platform for mobile phone communications that has revolutionized the way nearly one-fifth of the people in Japan live and work. Introduced in Feb 1999, this convenient new form of mobile service has attracted over 28 million subscribers in Japan alone.

With i-mode, mobile phone users get easy access to thousands of Internet sites, as well as specialized services such as e-mail, online shopping, mobile banking, ticket reservations, and restaurant reviews. Mobile users can access sites from anywhere in Japan, and at unusually low rates, because their charges are based on the volume of data transmitted, not the amount of time spent connecting. NTT DoCoMo's i-mode network structure not only provides access to i-mode and i-mode-compatible content through the Internet, but also provides access through a dedicated leased-line circuit for added security.

A Unique Business Model
NTT DoCoMo had the foresight to create i-mode at a time when the Japanese market for mobile phones was reaching maturity and users were in need of new services. i-mode did not just generate new revenue for NTT DoCoMo in a saturated mobile marketplace it has redefined the meaning of mobile communications. i-mode has been phenomenally successful in Japan because it is remarkably convenient for mobile users, employs powerful new technology, and relies on NTT DoCoMo's unique i-mode business model.

Underlying this business model is an entirely new approach to the mobile service value chain and to the relationship between wireless service and the Internet. Therefore the key question is: can the same business model be replicated elsewhere for a different culture and market nature?

NTT DoCoMo synchronizes the entire i-mode value chain, in order to develop a complete mobile service for their subscribers. Their close business collaboration with mobile manufacturers, content providers, and other service platforms ensures that mobile technology, content quality, and mobile users' experience evolve at the same optimal pace.

Ultimately, this synchronization guarantees that their customers, business partners and shareholders have their interests aligned with the mobile user's, enabling all parties involved in the value chain to maximize their value. In addition, they encourage continual feedback from all parties (business partners or subscribers) involved in their value chain, including customers. Such candid feedback has enabled their company and business partners to align their interests accordingly, and has helped to continually improve the quality of all products and services connected with i-mode. For instance, open exchange of research and technical data has led to the creation of richer content and lighter, better performing mobile devices that are extremely popular in the Japanese market.

Win-win collaboration
NTT DoCoMo based their development efforts on a unified vision of mobile and Internet technology. In particular, NTT DoCoMo has adopted a mobile communications model utilizing variations of de facto Internet standards such as HTML. By basing their content on iHTML, a subset of HTML, they are able to give their customers mobile access to the existing network of conventional Web servers, and therefore, provide them with seamless Web service. At the same time, their use of iHTML has greatly simplified the creation of i-mode sites for their content providers. Other key standards they have adopted include GIF, Java, MIDI, and HTTP, to name a few.

As mobile services in Japan evolve and data traffic increases, their unique collaborative business approach will give them a major competitive advantage in communications markets around the world. NTT DoCoMo's success is, and will continue to be, due to their ability to create a "win-win" situation for all of their stakeholders, including their customers. Theoretically, this can be re-created around the world, but given the lack of similar business collaboration among the entire value chain, it will be of great challenge to form the same success elsewhere.

Compelling Technology
Users of i ppli, i-mode's newest Java-based enhancement, can download maps to help them reach their business destinations and display charts of daily stock price fluctuations. With Java-based agent applications, mobile users can set their terminals to receive automatic updates on weather, traffic, and other types of information. i ppli also maximizes scheduling efficiency by notifying mobile users instantly whenever appointments are changed on corporate groupware. From remote locations, mobile users can monitor the activities of staff members, check the availability of meeting rooms, etc.

Notably, the i ppli software supports two versions of SSL encryption (40-bit and 128-bit). This added level of available data security should fuel a dramatic surge in the popularity of mobile-based, financial transactions. In the future, i ppli will offer many more conveniences; since Java's open specifications are encouraging the development of more advanced business applications.

Now that NTT DoCoMo has introduced the high-speed multimedia power of FOMA (freedom of mobile multimedia access), 3G mobile services will be on greatly benefited by i-mode's business possibilities. With i ppli, users of compact, Java-compatible i-mode terminals can download advanced software and content from more than 100 websites and then use the downloaded applications or content whenever they want.

Based on the W-CDMA system, which complies with IMT-2000 an international standard for 3G mobile communications, FOMA is fuelling the dramatic evolution of i-mode, other Web-connection services, and innovative applications such as i ppli. It supports full-motion video image transmission, music and game distribution, and other high-speed, large-capacity data communications.

However, the most important challenge is not technology in the growth of mobile technology but rather, in breaking the cultural differences. How do we replicate the success of i-mode elsewhere around the world, in particular, Asia where the maturity of mobile technologies varies from country to country?

The task of getting all the business value chain stakeholders to support a similar business model will not be easy, and even difficult to justify from profitability perspective given the various cost model in each country. Until then, i-mode in Asia will be put on hold.

New i ppli-cation for i-mode
Launched in Jan 2001, i ppli is the result of new advances in Japan mobile technology and NTT DoCoMo's close cooperation in recent years with Sun Microsystems. i ppli uses the Java platform developed by Sun for consumer electronics and built-in devices, as well as i-mode's large extended library, which was developed jointly by the two companies.

Since the data processing power of mobile phones is far less than that of PCs, i-mode uses a version of Java called KVM (K virtual machines). KVM runs on systems with relatively low processing power. A key feature of KVM is that its security functions are superior to those of standard Java.

So, i ppli users do not have to worry about unauthorized viewing of their digital address books and other personal files, or the unintentional placing of calls billable to them. Although KVM i ppli will not directly run standard Java programs, mobile users can easily convert many Java applications for i-mode use with minimal changes in functionality.

Significantly, the overall architecture of the i-mode network remains the same with the advent of i ppli. With i-mode terminals, i ppli users can download Java applications from conventional HTTP Internet sites just as easily as they do HTML documents, and Java programs on i-mode terminals also use the HTTP format for data communications. Best of all, i ppli content is graphically-rich and simple to use, containing the kind of expressive images, text, and sounds that are possible with Java.

CK Mah writes for Network Computing-Asian Edition

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