New messed up phone
Although I'm strongly against the Japanese cell phone business model, I bought a new cutting-edge model from au in order to try the new digital TV for mobile devices. 
In a sense, it's really amazingly advanced; it has 3inch 800x480 pixel beautiful LCD, bluetooth, a digital TV function, with which you can watch about 8 broadcasts in metropolitan areas in Japan now, 3M pixel camera with AF and shake reduction, 1GB memory, 2.4Mbps internet access with a flat rate connection service, GPS system with a capability of 3D display etc. In short, it's a milestone of the Japanese state-of-the-art technologies.
I changed from the old one to this new one for about USD250. Way too cheap.
Japanese cell phone business is completely messed up. No matter how advanced the devices look, it will demise sooner or later.
There has been a lot of argument going around this issue. The biggest and almost the only problem is the vertically integrated business model. We cannot choose any services, devices and connection services on our own. You choose either NTT DoCoMo, au or Softbank, the 3 big players in the market. And, there are a bunch of devices for each carriers, all of which you cannot use for a different carrier than you originally signed up for. Your device can only connect to your carrier since they make the SIM card not reusable. And the services like GPS, news, online music, are all specific for your carrier. This is ridiculous.
I will have to pay about USD60-80 each month, 20-25% of which goes to the device manufacturer. Sellers get a hefty payback for each device they sell from a carrier. This is why we can buy a device so cheap. Old models are for free, well at least it apears to be 0 yen in retailers.
This model has ensured manufactures and application providers a certain income. They invested a lot and developped quite advanced devices and services, which no users in other countries would be intereted in, and unable to use.
Japanese are good at making small devices, but the world wide market share of cell phone is less than 1%. Japanese market itself is huge, but it looks to me that sometime in the future, this business model will not hold.
Oh, my cell phone can record a TV program even though I cannot do a reservation-record(why??) and with the recorde movie, a bluetoogh headset does not work(why???). It plays online music, but I cannot play like MP3, OGG, AAC, WMA, anything popular in the outer world(why???). It's a really messed device.
posted by ken @ 5:48 AM
4 Comments:
Just imagine the prices that Docomo and Au would have continued to charge customers but for Softbank's purchase of Vodafone. You got a bargain because that phone could very well have been more expensive. Often times, healthy competition in the marketplace leads to reasonable prices for goods and services. If only governmental regulators understood this simple and most basic concept, consumers would not pay exorbitant prices for consumer goods such as electronic products.
Yeah, competition is one of the key elements necessary for capitalism. That's the theory, but there are a couple of ways to compete. Vertical integration works sometimes much better. Look at Toyota. They do control from the smallest parts to retailers. So, I think it's not as simple.
You forget that Toyota in the 80's compelled U.S. car makers to lower prices on vehicles. Competition is good for the economy if rules are applied consistently. The latter not being the case in Japan. Horie will probably agree while the management at Nikko Cordial is laughing. Incidentally, KDDI is offering lower prices to certain customers. Another result of Softbank's entry into the cell phone market.
Oh, it was confusing. When I said Toyota, I was talking about cometition within the Japanese auto industry. As you know, Toyota has been in control of all the smaller companies and factories involved in the industry. So, there's no market place where small makers compete to sell their products. They either have contract with Toyota, or not. But, Toyota still gained so much competitive power over the American auto industry. In a sense, the wireless phone industry has an identical structure with the auto industry. DoCoMo takes control.
Sometimes, it works fine, and sometime it fails big time. There are many possible competion environments. Free market is just one of these.
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