Executive Summary

The size and rapid growth rate of Japan's Internet-enabled cellular telephone market are unmatched elsewhere in the world. This white paper, a follow up to the research report we produced on this subject last year, presents an overview of the factors leading to this remarkable success. It also examines the current state of the market, lists popular applications, and casts an eye towards NTT DoCoMo's upcoming launch of 3G cellular services.

Targeting consumers leads to success
NTT DoCoMo's focus on average consumers, rather than tech-savvy PC users, provided the boost that Internet-enabled cellular services needed to become popular in Japan. Moreover, the fast pace of Japanese society makes the convenience of Internet access via easily portable cellular handsets especially attractive to Japanese consumers.

DoCoMo is dominant
NTT DoCoMo was first to market, and its i-mode service continues to dominate the Internet-enabled cellular space. Because users tend to upgrade to their existing carrier's data service rather than switch carriers, NTT DoCoMo, with the lion's share of the voice cellular market, looks set to maintain its lead in the data market as well.

3G services: will they sell?
DoCoMo will launch FOMA, its 3G voice and data service, in October 2001. The high-speed FOMA network will enable users to receive multimedia content on their handsets, but consumers' willingness to pay for these services is an open question. Pricing and reliability will make or break FOMA and the competing services from J-Sky and au.

TABLE OF CONTENTS:

• Market Background.... 1
• Competitive Outlook.... 7
• Popular Applications.... 9
• Leaders of a New Mobile Commerce Paradigm.... 19
• Future Trends.... 23

APPENDIX

• Figure 1: Internet-enabled cellular services especially popular among young
  
• Figure 2: i-mode user population overshadows competitors
  
• Figure 3: Service overview: i-mode (NTT DoCoMo)
  
• Figure 4: Service overview: EZweb (KDDI au)
  
• Figure 5: Service overview: J-Sky (J-Phone)
  

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