********************************************************** Japan Internet Report No. 35  February 1999 ********************************************************** In this month's issue: -  Cell phone ads to replace e-mail ads? -  More on iMac -  Industry Briefs -  My Favorite Monopoly in the kitchen ********************************************************** Cell phone ads to replace e-mail ads? With more than 40 million subscribers, Japan's mobile telephone user population dwarfs its Internet user population. Maybe that's why one Japanese firm has its eye on cellular handsets, rather than e-mail newsletters, as a potentially powerful new advertising medium. Tokyo-based Super Stage says it will start offering a free, advertising- supported voice mailbox service for cellular phone users.  After submitting an application with detailed personal information, subscribers will be assigned their own voice mailboxes to which demographically-targeted audio advertisements will be distributed.  The service will be free to cell phone users; corporate advertisers will pay 10 to 60 yen ($0.08-$0.50) for each ad played. Super Stage decided that a voice mail service would be more effective than e-mail advertising in reaching young consumers, according to a spokesman.  Will cellular companies start giving away handsets just to develop audiences for advertising-supported voice services?  Maybe someday everything will be free, and we'll just pay for it all by having to view or hear advertising every time we use it... ********************************************************** More on iMac Responding to last month's blurb on iMacs, Dave McCombs of Bloomberg wrote: "The iMac compact? It's got a footprint the size of a Sasquatch..." Dave also notes that "Apple's strategy must be to go for younger females, who, as you know, are about the only demographic in Japan with discretionary income left..." Maybe you saw this on CNET: Japanese retailers are bent out of shape because Apple requires them to buy the same number of machines in each color, rather than allowing them to stock only the more popular colors, which include "blueberry" and "grape."  Being forced to bear inventory risk doesn't strike these dealers as "user-friendly" policy... ********************************************************** Industry Briefs Japanese Internet commerce to be worth $126 billion, says ECOM Commerce conducted over the Internet in Japan will be worth some 15 trillion yen ($126.05 bil) three years from now, according to the Electronic Commerce Promotion Council of Japan (ECOM).  The figure would be equivalent to 1% of all commercial transactions in Japan, according to ECOM, and will rise to 63 trillion yen ($529.41 bil) ten years from now. ECOM compiled the results of its study February 17, using the "total impact of e-commerce on Japan's economy and society" as the basis for calculating the figures, according to a spokesman. Intelligent transport systems will also be multi-billion dollar market, says MPT The MPT's Telecommunications Technology Council has estimated that the Intelligent Transport System (ITS) market will generate 60 billion yen ($491.80 bil) of goods and services between fiscal 2000 and 2015.  The newly emerging industry will create 1.07 million new jobs and have an aggregate economic impact reaching 100 trillion yen ($819.67 bil) during the period.  The council forecasts that car navigation system-equipped vehicles will number 42 million in 2015, more than a tenfold increase from today. The ITS market represents a solid opportunity for Internet technology and service providers, say industry watchers. When it comes to insurance, government knows best... MITI plans by April 2000 to develop an electronic insurance transaction system.  The ministry says a government-led development effort is necessary "in order to provide an industry standard that will enhance security, reduce costs, and pave the way for the development of a full- fledged Internet-based insurance sales and service sector."  Two government-affiliated associations, the Information Technology Promotion Agency, Japan (IPA) and the Japan Information Processing Development Center (JIPDEC), will solicit bids from subcontractors to work on the system. New sewer "pipes" being laid by telecom carriers The city of Yokohama will open its sewers to use by telecommunications carriers from April this year.  Telecom firms generally string optical fiber cables along freeways or railways, but are showing growing interest in using sewers for base station and trunk circuitry.  Japan's metropolitan area sewers are increasingly being recognized as precious information infrastructure, and cable television operators are starting to look into their use as well, say industry watchers.  Yokohama will follow Tokyo to become the second city in Japan to open its sewers to telecom firms. Cell phones may turn into screaming Web terminals, videophones, says MPT The MPT has launched an initiative to develop a Multimedia Mobile Access (MMAC) system that would enable wireless telephones to receive maps or even full-motion video at speeds ranging from 20-30Mbps, some 2,000 times current PHS transmission speeds.  MMAC would be a successor to the IMT-2000 wireless telephone standard slated for implementation in 2000. MMAC system cellular or PHS handsets would be equipped with tiny monitors, enabling users to surf the Internet or transmit and receive full-motion video imagery, according to an MPT spokesman.  Such handsets could easily be used as portable videophones, the spokesman said. BOOK SERVICE's online sales growing Tokyo-based book delivery company BOOK SERVICE, a subsidiary of YAMATO TRANSPORT, recently announced that it has been receiving an increasingly large number of online book orders since last year.  Although online orders in 1996 accounted for only 7% of the company's total orders, the ratio grew to 10% in 1997, and then climbed to 22% in 1998, according to a spokesman.  The company expects this figure to rise to between 30%-50% during 1999.  One company executive attributed the growth to the Internet's recent popularity and to customers becoming accustomed to ordering books online.  Now if they would only disclose actual sales and give us some REAL news... Free online medical, health information service to go commercial Tokyo-based INTERACTIVE CABLE COMMUNICATIONS, a MARUBENI subsidiary, will from April commercialize its online medical and health information service, which it currently provides to cable Internet subscribers.  The company plans to develop its "Virtual Clinic" Web site into a medical Internet portal site that will rely primarily on advertising revenue in order to leverage its strong viewer ratings.  Virtual Clinic is a non- commercial site that enables registered members to receive free medical advice from 150 doctors via an electronic bulletin board. Independent Web rating service to debut Tokyo-based Internet software developer IST will team up with market research firm NIPPON RESEARCH CENTER (NRC) to sell Japan Access Rating, a service that will provide Web site viewer ratings and other market data to corporate users.  The two partners plan to launch the service in March.  Industry watchers say that objective viewer rating data provided by neutral third-party services could have a profound effect on Internet advertising prices in the future.  Companies will initially pay between 35,000-100,000 yen ($310-885) in monthly subscription fees. NRC hopes to sign up 1,000 corporate subscribers and take in approximately 300 million yen ($2.7 mil) in sales during the first year. Another dedicated Web terminal to debut... KOMATSU will release a desktop intranet terminal as early as April.  The new WebLight device, which features an LCD touch screen, is the first dedicated, non-PC terminal device that KOMATSU has developed specifically for Web browsing.  The new device, which KOMATSU says will be useful in applications ranging from convenience stores to manufacturing settings to libraries, will be displayed by KOMATSU and KOMATSU SOFT at a distribution information systems show to be held at the Tokyo Big Sight starting March 2. Do we see a trend developing here? SEIKO-EPSON has developed a portable touch-panel network terminal loaded with a dedicated Web browser, Netfront 2.0, and will begin sales in April.  The Intergate is equipped with a 32bit SH7709 processor, 16Mbytes of main memory, 4Mbytes of flash memory, a 10.4-inch TFT LCD, the company's proprietary QA-2000 audio-visual chip, and a 10BASE-T Ethernet port.  The terminal runs microITRON, a realtime operating system.  The terminal is likely to sell for about 200,000 yen ($1,709). The company plans to ship 10,000 units the first year. ********************************************************** My Favorite Monopoly in the kitchen You've got to hand it to NTT -  while they may be one of the most consumer-unfriendly companies in the world, they've got their finger on the pulse of the Japanese consumer.  Now they're working earnestly to get their hands deeper into the pocketbooks of Japan's homemakers. NTT's latest effort is Telesse, an "almighty" telephone/fax/Internet terminal designed specifically for use in the kitchen or dining room by Japanese housewives.  Its touch-screen, menu-driven interface enables the user to make telephone calls, check and send e-mail, surf the Web, send faxes, or listen to answering machine messages, all without using the integrated keyboard.  Users can even enter text by touching the screen rather than the keyboard.  A major selling point is the ability to "use the Internet without a PC."  Of course, Telesse comes bundled with NTT's ISDN and/or OCN services.  Wonder how you would fare if you tried to buy it for standalone usage with another ISP... I first saw Telesse in a double full-page ad in a woman's magazine, and was struck by the very direct focus on women using this device in their kitchens.  Marketers take note. And hey gals!  Telesse is "even simple enough for women and children to use."  Send orders and complaints to: http://ced.nttca.com/telesse/ ********************************************************** 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 ------------------------------------------------------------