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********************************************************** Japan Internet Report No. 23 January 1998 ********************************************************** In this month's issue: - Trend is toward "passive" usage, pursuit of personal interests, says FRI - Japan taking leading role in Internet fax sector - Anything to avoid using a keyboard! - Interview with Akihito Tsukioka of Digitized Information, Inc. - Industry briefs - Coming up on two years ********************************************************** Trend is toward "passive" usage, pursuit of personal interests, says FRI Fujitsu Research Institute (FRI) recently compiled the results of its first survey of Japan's Internet users (www.fri.co.jp/cyber/research/index.html). While the survey featured a fairly small sample size (1,323) and was skewed toward housewife respondents, I like the way FRI segmented Internet users along two continuums: "Purpose of use" and "active/passive orientation." "Purpose of use" proposes to show two opposite types of users: Those who use the Internet primarily for work or study, and those who use it primarily for entertainment or personal interests. The "active/passive orientation" refers to those who actively build their own Web pages and/or submit comments to mailing lists, etc. as opposed to those who simply browse Web pages or subscribe to and read mailing lists, etc. These two continuums can be expressed as follows: Work/study Entertainment/personal interests Passive information receiver Active information generator If these two continuums are set up as an x-y axes, four quadrants are created. FRI came up with the following user segmentation, based on this quadrant conceptualization: Model Japanese Businessman (work/study + passive receiver) 17.7% - High percentage of salaried, corporate employees who are married - Short sessions on entertainment/personal interest sites - Started using Internet at work - Favors commercial Web sites produced by corporations - Frequently accesses business-related Web sites Information Elite (work/study + active generator) 13.8% - Corporate employees who've been using Internet for a relatively long time - Long sessions on work-related sites - Frequently access news, computer-related sites - Large percentage have online shopping experience - Most likely segment to believe in need for using Web Future Mass Market users (entertainment/personal + passive receiver) 42.6% - High percentage of female users - Number of accesses per week is low - Started using Internet because it is trendy - Frequently view travel, giveaway-related Web sites - Generally have few bookmarks in browser Internet Enthusiasts (entertainment/personal + active generator) 26.0% - Many students, full-time housewives, large percent are unmarried - Long sessions on entertainment/personal interest Web sites - Bought computers for the purpose of getting online - Find Internet convenient for exchanging opinions with others - Would use Internet more under fixed-rate fee structure I think FRI's basic point, that the "Future Mass Market" segment of passive, entertainment-oriented users constitutes the mainstay market of the future, makes a lot of sense, though it probably overstates the case for women users. The passive/active measure has particular relevance for software developers and online merchants. An interesting perspective on the market, and one that points out the need for corporations to develop segment-specific marketing strategies and response/fulfillment mechanisms, rather than treating all Internet users as a single market. ********************************************************** Japan taking leading role in Internet fax sector Japan is taking an increasingly important role in the new business of using the Internet to transmit facsimile messages internationally at low cost (see Industry Briefs). This makes sense, since Japan already dominates the world market for conventional facsimile machines. Matsushita's new device, which eliminates the need for access codes, user IDs, and other troublesome procedures that keep Internet faxing out of the mainstream, seems poised to blow the whole market wide open. ********************************************************** Anything to avoid using a keyboard! Its amazing the length to which Japanese companies will go to make use of the Internet possible without PCs or keyboards. Consider the new Internet fax system just announced by Nissin Electric. It enables the user to hand write an URL on plain paper, fax it to a server, then have the content of the requested Web page transmitted back by facsimile. Online searches and e-mail transmission and reception are also possible using the system, according to the two partners. Only in Japan! ********************************************************** Digitized Information is a Tokyo-based information service provider covering the electronics industry. "Diginfo" has provided comprehensive market monitoring services to companies such as Intel, Motorola, and IBM Japan for more than 13 years. This month we enjoyed an e-mail interview with President Akihito Tsukioka. - One MBA marketing text says that the most important "market research" that any company can do is simply to carefully read local newspapers in a consistent and thorough manner. Isn't this a big part of what your service is about? That's precisely what we've been doing since August 1984. We go through more than ten Japanese dailies, including some of the most common papers subscribed to by a large majority of companies in Japan, create abstracts in English, call up companies which are covered by newspaper stories of the day to get extra details such as the right English names and appropriate contacts, and distribute the abstracts by fax and e-mail. In addition to private subscribers, we have a number of corporate subscribers which distribute our information companywide. We don't really know how many people have access to Japanese electronics/computer/telecom information on a daily basis through our service, but they must number in the hundreds. Most corporate subscribers are large U.S. corporations that all your readers would know, and they widely circulate our information. For non-Japanese companies to understand what's really happening in this market, it's Lesson One to start reading local papers. There's no doubt. Of course, you have to establish people-to-people contacts to get real inside stories, but in Japan people don't usually feed you with as much information as you'd like. So, yes, it's certainly the most important, or fundamental, "market research" one can carry out, if possible, on a regular (daily) basis since so many things are happening here, especially in the high-tech fields we cover. Although reading papers is something anyone can do, the problem is so much information is available in Japanese here but so little in English. That's why services like what we offer are such a help for non-Japanese companies. We cover an average of 25-35 stories a day for our corporate subscribers, which may not sound a lot, but the number is substantially large and thorough since we restrict our monitoring to electronics, semi- conductors, LCDs, computer hardware and software, network, telecom, the Internet/intranets/extranets. In fact, we did a little research a couple of years ago to estimate the total number of stories in those fields reported on a daily basis. Including "fluff" and PR pieces but excluding repeats covered by more than one paper, there were about 70-80 stories a day, far more than an average Japanese businessman working for a company in one of those fields can digest. And we plan to increase coverage once our Internet-based service is launched. We got our first Internet address back in 1987 when we started sending daily reports via e-mail. At that time, we didn't completely foresee the full impact of the Net, but since work with translators who help us create English abstracts is maximized by fully taking advantage of the Internet, I really think we're lucky to be able to use the technology. Today, we have translator staff in seven different time zones in four different countries. - You've worked with managers at top firms such as Intel, Motorola and IBM Japan for more than 13 years. What common problems do these folks face in the Japan market, and how have these changed over the years? I'm best qualified to comment on the problems they face in terms of local information accessibility. We see a lot more foreign businessmen working for U.S.-based companies in Tokyo who are competent in Japanese today than, say, 10-15 years ago. Though many speak Japanese, few can read Japanese quickly enough to absorb what their Japanese competitors read. Can you imagine U.S. businessmen who don't read the Wall Street Journal or some major local papers like the New York Times or watch CNN? But, here in Japan, most foreign businessmen are placed in that sort of situation. Their access to local information in the field they're doing business in is limited by the language barrier, which many would probably agree is by far the highest protective wall Japan has maintained, whether we like it or not. Large companies such as those just mentioned have very competent bilingual Japanese staff, so daily activities on the part of expatriate personnel may not be greatly hindered simply because they don't read Japanese. But the language barrier is certainly one of the major problems foreign businessmen assigned to Japan struggle with, though as I mentioned there's a greater number of them with very decent linguistic competence today compared toa decade ago or so. - How do you see the Internet impacting the operations of foreign firms in Japan? Foreign firms have certainly been more involved in using the Internet technology than Japanese firms. There's no doubt. It's simply amazing how slow Japanese companies are to take advantage of the technology. Of course, we see a number of Japanese companies that have created their own homepages, but there are not enough of them. As we cover the daily papers, we see more reports on foreign firms doing something with the Internet or Japanese companies forming alliances with foreign companies with Internet expertise to start new ventures or offer lower rates for telecom services. It may be somewhat of an exaggeration to say this, but the Internet may be intimidating many Japanese companies, including leading high-tech firms, not only because most Internet technologies come from the U.S., but because they're advancing so quickly. Japan or Japanese companies have never been good at taking the initiative in setting global standards, but many must be feeling that with the Internet they will have to walk a step behind from now on. - Why did you start Digitized Information and what vision or mission has sustained you in this exhausting work over the years? I started the daily English monitoring service more than 13 years ago because when I looked at what I had from the viewpoint of marketing myself as a resource, I realized my English skill and interest in information technology were the best things I could offer. I had also been interested in "getting Japan out" by translating things from Japanese into English. The Japanese are good at bringing foreign things and ideas into Japan, but we're not really trained to bring things out of here. So, my interest was going against the general stream, but that was where I saw my niche. Doing something on a daily basis was another thing few were doing. There were many weekly, monthly, semi-annual, and annual publications covering the high-tech industry I was interested in, but there was no daily report coming out of the vast information source which Japan was and has been. I thought it was going to be very risky to get myself into a kind of work that I would have to do every day until God knows when, but I was interested in the possibility of spreading Japanese industrial information in English so that more people would be able to know what is happening here. Over those years, not a day has been missed, though we close at the end and the beginning of each year and during Golden Week (late April through early May). But we cover those holidays, too, after we get back from the break. The bottom line is my interest in "getting Japan out" is the drive that's sustained me over the years, and thanks to the many translators I work with in different time zones, we've been able to offer consistent servicefor this long. - I understand you're offering a free sample subscription to JIR subscribers. How does that work and what does somebody need to do to sign up? We're offering a free ten-day subscription to JIR readers (due to an e-mail glitch, in the past we might not have responded to all the people who made an inquiry, so if you never heard from us, please forgive us for not getting back to you and send another inquiry ). We start sending a daily report as soon as we receive an inquiry. You just have to say that you're a JIR reader and interested in a free trial. Aki TsukiokaDigitized Information, Inc.COXY Yoyogi Bldg. 2FYoyogi 5-38-6Shibuya-ku, Tokyo 151, JapanPhone: +81-3-3465-7069Fax: +81-3-3465-7079E-mail: diginfo@gol.com ********************************************************** Industry briefs MPT wants Japanese version of global information infrastructure The MPT plans to develop technologies for a "Japanese version" of the Global Information Infrastructure (GII) first proposed by U.S. Vice President Gore in March 1994. The ministry will invest approximately 200 million yen ($1.5 mil) to start developing technologies for interconnecting LANs, cable television and other kinds of networks, starting in April of this year. An MPT spokesman said the move has been made out of concern over U.S. and European dominance of the GII concept, which may provide the West with strategic economic advantages if the resulting standards favor Western infrastructure providers. MITI looking to create Asian version of ISO Japan's Ministry of International Trade and Industry (MITI) plans to sponsor an Asia-Pacific Standards Network that would function much like the ISO and IEC in setting international standards for industrial products. The ISO and IEC are led by the nations of Europe, and as a result developing nations in Asia are effectively excluded from the standards-setting process, according to a MITI spokesman. The ministry will propose the establishment of a new organization of 22 nations including ASEAN members, the U.S. and China, and hopes to set up an Internet-based system for sharing data and polling members on various issues. MITI personnel will start sounding out potential participants next week and present a formal proposal at a PASC meeting to be held in Malaysia in February. New organization will provide interoperability evaluations for Internet gear Tokyo-based INTERNET RESEARCH INSTITUTE and Keio University Professor Jun Murai, who is often referred to as the father of the Internet in Japan, will cooperatively establish a new organization that will strive to provide unbiased evaluations of the interoperability and functionality of Internet-related equipment, including routers, servers and other devices. The new organization, called Network Operational Engineering Laboratory (NOEL), will attempt to address the growing need from both users and manufacturers for objective tests of network interoperability and compatibility. The new group expects to initially attract 50 corporate members and start operations with a staff of approximately 20. DC CARD to adopt SET 1.0 DC CARD, the consumer credit card firm of TOKYO MITSUBISHI BANK, has formed a consortium with NTT DATA, IBM JAPAN and CYBERTRUST and plans in March 1998 to start offering Internet-based credit card settlement services using the SET 1.0 protocol. The consortium will soon start forging links with virtual malls across Japan under a plan to win approximately 60,000 consumer users and 200 online merchants the first year. DC CARD is already involved in field trials whose participants are primarily employees of MITSUBISHI Group companies. HONDA to sell used cars online HONDA MOTOR will start an Internet-based used car auction in April. The company will display online images of used cars being offered by dealers and other commercial sellers, enabling visitors to bid online. A number of used car dealers have already started offering inventory information via the Internet, but HONDA will reportedly be the first manufacturer to start using the Web to conduct auctions. HONDA, which currently is enjoying brisk sales of its new models, foresees a greater number of used cars coming on the market shortly, and hopes to put into place a low-cost system for facilitating transactions in the used auto market. IBM JAPAN to unveil travel Web site IBM JAPAN will on December 18 unveil Tabi Can, a travel Web site whereby visitors can search for tours and make reservations online. The site, which will be operated in cooperation with discount travel giant HIS, JET TOUR and other agencies, will feature information on packaged tours, airline tickets, and the ability to make queries based on destination, price, departure and arrival times, and other factors, according to IBM JAPAN. AT&T JENS to set up voice message chat room that uses Internet phones Tokyo-based Internet connectivity service provider AT&T JENS will in April start offering a voice message "chat room" that uses Internet telephones. Most ISPs offer chat functions whereby participants can submit text messages, but the new service will be the first in Japan to offer voice message chat functions, according to an AT&T JENS spokesman. The low cost of calling via Internet phone should largely eliminate participate concerns about time spent online, according to the spokesman, who said that marketing efforts for the new service would be directed at current dialup subscribers. AT&T JENS hopes the new voice-based chat service will help it win new dialup subscribers and boost telephone traffic. Internet fax services to get boost with ITU's adoption of Japan standard, says MPT The Internet facsimile service market may get into full swing as early as June, according to the MPT, which on January 7 disclosed that it expects the ITU to accept Japanese technology as the international standard for Internet-based facsimile transmission services. If the MPT's prediction proves correct, it won't be long before faxes can be transmitted anywhere in the world for close to the 10 yen ($.08) per 3 minute cost of a local telephone call, according to a ministry spokesman. MATSUSHITA DENSO has already developed a dedicated Internet facsimile machine that functions as a PC printer and can be assigned its own e-mail address, just like a PC. JCB to distribute software that enables SET protocol transactions online JCB, Japan's largest consumer credit card firm with approximately 37 million members, will distribute to its cardholders software that enables them to make secure electronic transactions (SET) protocol transactions on its J-Mall Web site, slated to be unveiled within the month. The company will mail CD-ROMs equipped with the software to cardholders on request, free of charge. J-Mall will open with two to three merchants, including a PC software seller, according to a JCB spokesman. With Japan's largest credit card firm moving to secure online transactions, other firms that are still experimenting with online sales are likely to quickly make the transition to actual services, say industry watchers. Buy a car online, have it delivered Newspaper publisher SANKEI SHIMBUN has teamed up with G1 SHOP, an automobile seller that makes use of catalog merchandising, to start a new service whereby new cars from domestic manufacturers are offered for sale at a discount via the Internet. The two firms claim that the new service offers prices 50,000-100,000 yen ($388-775) lower compared to prices that consumers ultimately negotiate with dealers at conventional showrooms. It is the first Internet-based service for selling new domestically-produced cars in Japan, according to the partners. The service includes delivery of the car to the home. The partners currently have only 20-30 models online, but say they plan to boost this number to about 200 next month. Good news for folks calling home MITSUBISHI ELECTRIC, Japan's third largest comprehensive electronics manufacturer, will enter the international telephone services market, possibly as early as February. The company will lease dedicated lines from KDD, connect them to the public telephone service network in Japan and the U.S., and offer rates that it says will undercut KDD by half. Currently KDD charges 450 yen ($3.49) for a three minute, weekday daytime call from Japan to the U.S., but MITSUBISHI says it will offer the same service for 190 yen ($1.47). Ordinarily steeply discounted international rates are offered only to businesses, but a spokesman said MITSUBISHI will also serve individual customers. A number of foreign firms including a British telecom subsidiary have already announced plans to offer similar services is the first major electronics manufacturer to throw its hat in the ring, say industry watchers. ********************************************************** Coming up on two years Hard to believe that next month will mark the second anniversary of Japan Internet Report (JIR). Please send comments and criticism to info@tkai.com, anytime. ********************************************************** Tim Clark Editor Copyright 1998 by TKAI and Digitized Information, Inc. All rights reserved NOTE: Some JIR industry briefs appear later in Computing Japan magazine under modified titles. JIR is co-sponsored by Digitized Information, Inc. of Tokyo, a leader in providing daily English language coverage of electronics industry developments in Japan. For more information on monitoring electronics industry developments in Japan, or to receive a free e-mail sample of service offerings, please contact Digitized Information at diginfo@gol.com
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