Oh, goody, goody! A chance to disagree with *everybody*!
Gerhard Fasol:
> "This is an astonishing email: it's the first and only time sofar I
> have heard anybody call imode a "failure". Considering that imode is at
> the heart of a new multi-billion dollar industry with more than
> 1000 companies participating as well as providing many new jobs,
> it's astonishing to call this new industry a failure, and I am not
> sure you'll find many people agreeing with your judgment."
Spawning new companies and creating jobs is, I suppose, one
measure of success, but it's not necessarily a good one. As
James points out, it can be just the pot boiling over.
And sometimes quiet simmering is good.
Some segments of the supposedly-moribund U.S. manufacturing
industry are phenomenally successful by the simple measure
of productivity: they make 10 times more stuff than they used to,
with the same or lower headcount. And dozens of their competitors
got run out of business in the process. Now, if you're a politician
with one of those erstwhile competitors in your district, this is,
of course, an economic catastrophe. But only for you and your
constituents. Didn't everybody else win?
As economist Paul Krugman points out: a country or industry has
become good at something when it doesn't need to employ very
many people, or much more capital investment, to do that thing.
(Talking domestic industry here, not import.)
And, of course, bubbles happen.
Is i-mode all bubble, though?
From: "James Governor" <jgovernor@illuminata.com>
> Multi-billion dollar industry. More than 1000 companies. Many new jobs.
>
> Ummmmm.... sounds a bit like the Internet, doesn't it Gerhard? I
> personally wouldn't say the web was a "failure", but by late 1999/early
> 2000 it was certainly ready for a shakeout.... [snip]
Yes, the web is clearly NOT a failure from the point of view that counts:
consumers. B2C e-commerce software may be a VC deathspace now,
but the survivors in that arena are processing a hefty increase of web
orders over last year. Lots of people like this technology.
(For consumers seen as investors, and as employees of dot-coms,
it's a different story, I agree. A tiny minority got some of the
public's retirement money by being energetic, very upbeat, and
talking fast. I don't claim to know what the bottom line is, here
but I don't think it's good.)
> I have still not seen any good hard evidence on this list or anywhere
> else about the majority of imode businesses and whether they earn
> revenues/make profits and/or are still in VC or corporate-funded capital
> investment mode.
Well, we've weighed in on this topic in the past (search keitai-l archives
for postings on Daniel Scuka's "Dirty Little Secret" op-ed piece
in J@pan's Inc's Wireless Watch newsletter.) There's room for
skepticism about whether there's been net stockholder wealth
creation, or net consumer value, for the funding that's been ventured
to date for i-mode.
At the same time, however, I've tried to make the point that profitability
of the funded concerns is not the whole story, nor even a compelling
issue, in i-mode.
Because....IT investment in general isn't about profit.
Wanna argue? Read this first:
http://www.appelsiini.net/keitai-l/archives/2001-09/0158.html
(Note 1: "Strassman" is spelled wrong, should be "Strassmann".)
(Note 2: first few paragraphs cover some in-joke territory; ignore.)
(Note 3: I'm not selling a book, nor a 425-page report. This is
is just my stinking opinion, offered for what it's worth.)
> Imode is of course a huge success, as is Yahoo or AOL Time Warner. Does
> that mean *every* imode or Net-based business is or will be a success?
> This is surely confusing the branded service offering from the ecosystem
> supporting it.
>
> Ecosystem is really a key word here.
Argh. Victor Pikula came up with a perfectly good one: "Industrial
Organization." No e-word, please.
> ....In Europe (or the US) we could not
> replicate the exact set of circumstances that led to imode's success any
> more than we could replicate Japan itself. Even if we wanted to exactly
> replicate imode, Europe has different infrastructures, regulatory
> environments, investment climates, cultural differences, "free time"
> distribution and so on, which would make such a goal impossible. The
> idea [that] imode could come along and somehow throw out everything
> that had gone before is absurd to point of surreality. Whether walled
> garden or no, this is no "green field". There are realities to attend to
in
> business, as the Internet lobby recently discovered.
My understanding of the Strand comment is that i-mode is a "failure"
from an ideological perspective: you basically need a near-monopoly
walled garden to make it work. Which is considered evil, evil. And that
might just be for starters.
There are other aspects of i-mode that don't seem to have much
to do with these supposed preconditions, however. One is simply
billing for packets rather than time on-line. Another is the idea of
billing for products and services on the phone bill itself. For that
matter, what's so bad about walled gardens, as long as there is
competition among several of them, and a "wilderness" as well?
(With "wilderness areas" like Japan railroad operators, who needs
"civilization"?)
It seems premature to define "failure" as "can't be replicated
exactly", or as "hasn't yet swept the field of all opposition."
> All that can be done in Europe and the US is learn from imode, and try
> and build viable economic models for success for businesses based on
> "handies" (I still think the German term for mobile of keitai is the
> best I have heard! It's handy geddit?) that can work given local
> circumstances and conditions.
I VIOLENTLY AGREE WITH YOU HERE, JAMES!
On to the next point:
Gerhard:
> "One such point of misunderstanding is the assumption that the imode
> industry consists of content-providers only. That is just plain wrong.
> For example, some major content providers in Japan are video chain
> stores,
> or the railway companies. A railway company with millions customer
> does not need an official site on DoCoMo's menu, and they don't need
> to make a stand-alone profit from their imode site."
James Governor:
> I can only assume that I have missed something. You first state that the
> imode industry does not only consist of content providers. You then
> define video stores and railway companies as content providers. Then say
> one of these "content providers" doesn't need an official imode menu
> option and don't need to make a standalone profit. Then continue as if
> an argument were actually being made about walled gardens. Umm. Just
> what is the argument being made if you don't mind me asking?
I think what Gerhard meant by "content-providers only" was "businesses
that rely entirely upon the sales of content." The amazing thing about
i-mode is that it has enabled this so ... well, I hate the word
"seamlessly",
but there you have it.
For non-content-sellers ("NCSs"?).....Obviously, JR already sells
train tickets. If they can offer more customer convenience than, say,
one of the other transit operators here, they might win riders. I-mode
offerings can be a way to do this, and yet be a cost center. If JR
doesn't, however, offer all convenience possible through i-mode, and
the other operators DO, JR can lose riders. So there's a business
case here that has only to do with opportunity costs vs. costs of capital
and operations, for a new IT initiative: an i-mode site. Profit per
se does not enter in. Loss of business does, though.
This is a point Paul Strassmann makes quite well (though not original
with him): the arms-race model of IT. If Gore Vidal said "It's not
enough to win--others must lose," in his Veblenesque biliousness
he missed something about how red in tooth & claw capitalism is,
with ITSELF. "Losing can be OK, as long as your competition
loses more." IT investment doesn't have to pay off on the
bottom line, as long as it's hurting someone else's bottom line,
and isn't killing you in the process.
Of course, no real competitor is going to sit there and lose more,
if they can help it. Everybody will pony up for a similar IT strategy,
and take a charge against earnings or simply raise prices to cover it.
The only real profits go to the war profiteers: the IT people "selling
guns to both sides." They'll be in trouble when the war dies down,
but in the long run, there's a chance of real consumer benefit.
Jack Tramiel was simplistic when he said "business is war," but that
doesn't mean that business isn't like war in some respects. IT is
a very mercenary, arms-trade-like arena. It doesn't like to think
of itself that way, of course, but arms dealers have often had their
own apologies, and suffered from denial as well (from "onward
Christian Soldiers", in the case of the Bannermans, to "arise ye
prisoners of starvation" in the case of the USSR--even, somehow,
when they were selling to apartheid South Africa. Don't even get
me started about the U.S.)
It's ugly, but at least in the IT arena, nobody's getting killed.
> To really clear up some misunderstandings perhaps you should try and get
> beyond your own knee-jerk reactions to other people's comments and
> input.
WHOA HEY! I hold no brief for Gerhard, generally, but I'm sure
in this case the stimulus went much further up his spinal column
than that.
(To just beneath the corpus collosum, to what's known as "the money
center" of the brain. But that's for another day.)
[snip]
> Sorry to be so personal. This is not really intended as a flame, so much
> as a call for more clarity.
Smell gas and light a match to find the leak? Better to curse the darkness,
guy. Even flatulence can pack a punch if there's too much of it in one
place.
> ....After all, I can think of few people better
> qualified to explain how to do imode right than you, Mr. Fasol, after
> your successes of the last 2 years.
Now wait a minute, calm down. I think you'd understand the situation
much better if you read my 425-page report on "Progress and Prospects
at Eurotechnology" .... order now so I can clear my 2001 inventory ;-)
> On the other hand your parochial attitude may harm Eurotechnology's
> future prospects. Showing a clear understanding of both the Japanese and
> European markets would demonstrate a very clear value proposition.
> Claiming there is only one way to skin a cat on the other hand, is
> canonical, patronizing, and in my humble opinion, just plain wrong.
Did he? Where?
-michael turner
leap@gol.com
Received on Fri Dec 28 13:31:35 2001