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Thursday, Nov 26, 2009
A successful assault by Japan on the handset market is by no means assured. For one thing, mMode has a handicap that imode in Japan never had to contend with: a jaded consumer base. WAP (wireless access protocol) services -- the first big push to get Americans using their cellphones for data -- were over-marketed to Americans as fast on-ramps to the Internet, when in fact they were pokey, nearly useless text services displayed on ugly screens in clunky handsets.
"You can't over-advertise something," says Mark Berman, a Tokyo-based analyst for Credit Suisse First Boston. "If you build up expectations and then you disappoint people, it's going to cause irreparable damage, and that's what they did."
It's easy to blame WAP. But WAP is simply a specification for displaying information on handset screens as opposed to Web pages. It's not as common-sense as the cHTML standard used by imode, but a WAP-based service has succeeded -- in Japan. KDDI's imode-like service runs over WAP. It hasn't been a monster hit like imode, but it's been successful nonetheless. Still, the belief that "WAP is crap" has become common wisdom in the U.S. and contributed to a resistance to the very idea of cellphones as being useful for anything other than voice. The fact that mMode is initially being rolled out over WAP certainly doesn't bode well, then.
What does bode well for mMode is the success, so far, of the imode-like services in Europe. Offered in Holland through KPN Mobile and Germany through E-Plus since early April, those services are seeing a larger-than-usual share of revenues from data usage, according to early reports. But the parallels between the U.S. and Europe aren't exact. The European imodes, for one thing, are following the DoCoMo recipe for cellular success more closely, using Japanese handsets and the Access browser, neither of which is yet being used with mMode. And Europe, like Japan, has a viable mass transit alternative, around which a successful cellphone data service has already emerged: SMS (short message service). According to a Gartner study, Europeans use mobile data services at least as much as the Japanese do -- just in the form of text-centric SMS. But the mass-transit environment is the same, encouraging Europeans to fill microniches of time by sending messages, playing games and reading news, weather and sports.
Most Americans don't have such an encouraging mass-transit environment, and it's the U.S. alone, it seems, that is so peculiarly attached to the automobile.
"I think the car issue is huge," says Neil Strother, a senior analyst at In-Stat/MDR. "That's part of the reason it may take a while for mMode to take off. If I'm in an area where there's much better or more widely available mass transit, then it makes sense. But I think a lot of areas in the States are going to struggle with the driving."
Strother sees a formidable challenge in persuading Americans to change their habits. "Getting Americans to see their phones in a new way is a huge hurdle. It takes time to use phones in ways Americans aren't used to. There's a learning curve that has to take place. If AT&T Wireless pulls the plug on mMode in six or eight months, I'm not sure that it will have been given enough time."
But the argument that all of America is so completely car-centric that it could never adopt imode-type phones sounds a bit off, too, says Berman: "If you've ever lived in New York City, you know that's not the case. Or Boston, or Chicago. And besides, people have a lot of downtime no matter where they are."
"There are some behavioral differences, and commuting is one," concedes John Bucher, research analyst at Gerard Klauer Mattison. "But I don't think that means that there's not a market here for it." He says a bigger obstacle might be that Americans tend to have PCs at both ends of their work commute, and they've grown accustomed to using them. He notes that in Japan, both PC and Internet penetration were relatively low when imode exploded.
But debates over mass transit versus car culture may miss the real point. Truth is, Americans just don't have the right tools to go online wirelessly. If imode had been offered in Japan over the kind of inferior handsets offered in the U.S. today, it would have failed miserably. In other words: It's the handsets, stupid.
