********************************************************** Japan Internet Report No. 34 January 1999 ********************************************************** In this month's issue: - Internet in the home - iMac as furniture - Cell phone as fashion statement: Part Deux - Industry Briefs - NTT wants to rule world of Japanese Internet - Wall Street Journal covers TKAI ********************************************************** Internet in the home At some point in the future, our homes will likely be equipped with high-speed IP ports rather than telephone jacks - the concept that Sprint made such a splash with last year. These ports will accept a variety of appliances - and the types of appliances that are becoming Internet-enabled get more interesting all the time. You read about the Internet-enabled refrigerator in Japan Internet Report No. 24 last year (http://www.tkai.com/jir/jir3_98.html). Now Matsushita Electric Industrial has produced a model home-of-the-future that includes CPU-equipped refrigerator, microwave oven, and bathtub, all of which allow for remote operation and control. There's even a toilet that automatically measures body weight and performs a simple urinalysis with each use, transmitting the data to the central home server for storage and reference over time. Matsushita is only one of many Japanese companies seriously looking to integrate Internet and computer technology with the average home. Shikoku Electric Power and the EcoNet Consortium are developing a system that uses a home's existing electrical wiring to enable control of air conditioners and other appliances via the Internet or mobile telephones. The core technology, which Shikoku Electric Power has dubbed "OpenPlanet," involves attaching single-chip CPUs to air conditioners and other appliances. A mini-server residing in the meter box transmits signals to the appliances via existing wiring, and itself is controlled by transmissions from the Internet or a PHS handset. Meanwhile, condominium developer Haseko Corporation has announced that it will cooperate with NTT (who else) to build and maintain Internet-friendly "mansions," or condominiums in Japan. Haseko will be responsible for planning and designing condominiums that offer residents built-in Internet access, and NTT will handle the actual installation and maintenance of the infrastructure, in addition to providing support services to residents. Haseko plans to market its "Internet mansion" to other condominium developers around the country, and hopes to connect as many as 3,000 condos to the Internet by the end of March 2000. Because each complex will be connected to the Internet via a dedicated line, Haseko says residents will only need to pay about 2,500 yen ($22) in monthly access fees. Clearly Haseko sees strong consumer demand for Internet connectivity, while NTT sees its monopoly telephone business eventually going the way of the dinosaur. That's why the phone giant is falling all over itself to replace that $20 per month local phone service annuity with a $20 per month Internet service annuity. ********************************************************** iMac as furniture It's about time someone thought about how boring and ugly computers are, yet how much space they take up and how apparent they are as items of furniture, especially in smaller Japanese homes. Think about it: in a small home, the computer is as much a piece of furniture as a TV set or portable heater. And the iMac is modern furniture - sleek and transparent, innovative, and - most important - compact and available in a choice of colors. The someone who finally figured out that computers are actually boring and ugly pieces of furniture, of course, is Apple Computer. And the main reason the iMac is selling in Japan is fashion (and compact design) - rather than performance. Finally people can have a computer that takes up less space, is tasteful, can be a conversation piece, and most of all, says to everybody "the person who owns me is cool." Design is the real secret behind the iMac's success in Japan. ********************************************************** Cell phone as fashion statement: Part Deux The latest twist in the evolution of the cellular telephone as a fashion accessory in Japan is the addition of music. Now you can have music, rather than a boring ring tone, play when someone calls you. The really hip can program their own melodies into their handsets - the ultimate in a customized fashion statement. Maybe soon we'll see handsets with sophisticated sound sources, capable of accommodating .wav rather than just MIDI files. If that happens, there'll be no limit to the kinds of sounds that come out of a cellular telephone. In any case, this year we're sure to see other new ways in which cellular telephones will "accessorize" people's lives in Japan - and more new ways in which cell phones can connect them to the Internet. ********************************************************** Industry Briefs Keyboard allergy dangerous to financial health... White-collar workers in Japan who are able to use personal computers earn 19% more than their PC-illiterate counterparts, according to a study by an MPT research laboratory. The study found that workers with PC skills are able to perform more sophisticated data analysis and other work, and therefore earn higher wages. Meanwhile, even among less- skilled workers, those who can operate PCs can accomplish routine work more efficiently, resulting in a trend toward hiring younger workers, according to the study. The study was the first of its kind to be conducted in Japan, according to an MPT spokesman. CBA to imitate Amazon.com... The Cyber Business Association (CBA) plans to start offering in July 1999 a service whereby residents of Japan can buy books directly from U.S. sources online using InternetCash, a form of electronic currency. The CBA says it will work with a number of undisclosed U.S. booksellers and provide them with software that automatically handles yen-to-dollar conversion/settlement at the time books are purchased. A spokesman said the CBA will start an InternetCash experiment in April with about 10, 000 participants in Japan, and plans to shepherd this user base into the new book-buying application. A service whereby residents of the U.S. can buy products from Japan in the same way may also be forthcoming, the spokesman said. Japanese cars to drive themselves by 2003? The MPT on January 5 revealed that it will cooperate with the Ministries of Construction and Transport to develop by the year 2003 a wireless system that will enable automobiles to automatically "drive themselves."The ministries plan to install the system, dubbed Smart Way, along a stretch of a second Tomei Expressway, which is currently under construction, by setting up an optical fiber network and radio towers that will communicate directly with an advanced car navigation system to guide the automobile along the road. The three government ministries estimate that the project will spark a ten-year economic ripple effect worth several trillion yen. The move will throw Japan, the U.S., and several European countries into direct competition for a global car navigation standard. Another Japanese company to sell mutual funds over the Internet... NOMURA ASSET MANAGEMENT plans in the first half of 1999 to start selling over the Internet no-load investment trust funds, Japan's equivalent of mutual funds. The company is currently marketing such funds directly over the telephone and by conventional mail, and expects to win more than 8,000 new accounts by the end of the year. With the addition of Internet marketing, the company hopes to win 30,000 new accounts over the next two to three years, according to a spokesman. NTT getting fingers into another Internet pie... NTT DOCOMO has purchased an 8% stake in INTERNET RESEARCH INSTITUTE (IRI), a Tokyo-based firm that provides Internet-related R&D and consulting services. The company purchased 250 shares of IRI stock for an undisclosed amount, making it the next largest shareholder to CANON, which ranks second. DOCOMO decided that acquiring core Internet technologies is critical to enable it to develop new demand for data communications services that make use of mobile telephones. Another mission-critical application from the nation's phone monopoly... NTT will on January 20 start offering a commercial information service on an experimental basis via its "goo" search engine. One feature of the service will enable Internet users to purchase information on nearly 13,000 entertainers, including their blood types, hobbies, and birthdays. For each purchase, users will pay between 100 yen (85 cents) and 1,000 yen ($8.55). NTT hopes eventually to develop the new "information distribution" business into one of the group's mainstay services, according to a spokesman. ********************************************************** NTT wants to rule world of Japanese Internet NTT, Japan's local telephone monopoly which is majority-owned by the Japanese government, does its best to come off as the benevolent caretaker of Japan's Internet market, but in fact it is the greatest destroyer of innovation and dynamic development in this critical sector. While stifling consumer Internet usage through its metered-rate telephone system, NTT is working to dominate the 1) dedicated business and tier 2 ISP connectivity market through its Open Computer Network (OCN), 2) the search engine market through its "goo" service, 3) the banner advertising market through its joint venture with DoubleClick (through NTT Ad), 4) mobile access through NTT Docomo, its cellular provider, 5) the Internet television business through subsidiary NTT OffTalk Communications, 6) the satellite-based Internet connectivity sector through NTT Satellite Communications. etc., etc. Don't even get me started... Now our favorite monopoly appears to be moving into the broadcast sector through a deal with Japan Digital Broadcast Service, operator of the SkyPerfecTV digital satellite television service. No question about it: NTT (i.e. the Japanese government) is by far the biggest and most powerful player in Japan's Internet sector, and it wants to continue to rule that world. ********************************************************** Wall Street Journal covers TKAI The Wall Street Journal wrote about TKAI on December 30 of last year, featuring innovative employee work/life balance strategies. Maybe next time they'll talk about JIR... ********************************************************** Tim Clark Editor To subscribe or unsubscribe to JIR, send any message to: subscribejir@tkai.com unsubscribejir@tkai.com Copyright 2002 by Ion Global and Digitized Information, Inc. All rights reserved. ------------------------------------------------------------ Ion Global (USA) Japanese e-business specialists http://www.tkai.com/ Tel. (503) 235-4433 Fax (503) 235-4422 ------------------------------------------------------------

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