(keitai-l) Re: foma gate showrooms

From: Michael Turner <leap_at_gol.com>
Date: 11/22/01
Message-ID: <002101c17355$4da41d60$5c42d8cb@phobos>
From: "Nick May" <nick@kyushu.com>

> Docomo's policy of "showing off'  it's new FOMA phones in areas that will
> not get the service for another 6 months is curious.
> It all considerably reduces the incentive to "upgrade" one's phone until
> then...  Curious strategy.

  In the PC world, this is reminiscent of "Osborning" yourself. STFW,

  Well, OK, capsule summary: Osborning is when a hardware company whose
finances hinge on near- to-mid-term exponential sales growth walks out in
front of the speeding truck by announcing "Oh, but we'll have a new product
ready in 6 months, one that's so-o-o much better than what we have on the
store shelves."  Osborne Computer was one notorious booster-rocket failure;
high-flying 80s CAD startup Daisy Systems also saw Aryeh Feingold shoot his
mouth off (and his  own company down.)

  It still happens on a smaller scale, not killing whole companies, just
setting them back.  IBM's policy is smart: they never pre-announce products.
They probably learned this lesson back when CPUs filled half the room and
sounded like angry beehives with the sound turned up.

  A FOMA phone isn't just a computer, though.  Not hardly. FOMA is a
service. And DoCoMo isn't making handsets anyway.

  DoCoMo is big enough, and even after the KPN debacle, profitable enough,
that it could Osborne some of its handset makers and still recover.  But if
the handset makers are currently running a loss on each phone, and are not
seeing exponential sales growth, even *they* might welcome a sales-dampening
move.  Saturation kills economies of scale.

  And that's the rosier view.  There's also my "ISDN payphone theory" of
FOMA--it's the technology of the future, and always will be, a "catch us if
you can, you Western feebs" technological Potemkin village.  Neither DoCoMo
nor the handset makers may care if FOMA promotion dampens 503i sales now--at
this point, "FOMA" could be, as Vonnegut glossed it, just "lies" after all.
Those showrooms could be there mainly to project an image to the rest of the
world, and build mind-share for foreign equipment sales.  That would be one
way to earn back some of their investment in 3G, which might be the bigger
priority if saturation has nearly been reached.  A devalued yen to the
rescue, soon?

  Still, with conventional i-mode speeds are to triple, as claimed, this
could actually be one of those ugly cannibalization scenarios.  Nick may
have a point to ponder.  What's going on in the bean-counting departments
and in the sales projections at DoCoMo?  Full scale war, for all we know.
"My Excel spreadsheet can beat up your Excel spreadsheet."

  Finally: can we know?  i-Mode itself appears to have been a "curious
strategy"--a way to build a subscriber base rapidly when the keitai race was
suddenly on, purposely foregoing ARPU.  (Search the archives for "Ray
Tsuchiyama"--I've written about his thesis often enough in this forum.)
With shrouded ironies like this in DoCoMo's past, we might not find out what
the real game was until it's mostly over.

  In short: a curious strategy, perhaps, but we're not in Kansas, Toto.

-michael turner

P.S.  There have been rancorous comments here recently about how spat-upon
certain non-Japan-resident keitai-listers feel when told, directly or
otherwise, "This is Japan. We're here, you're not. No wonder you just don't
get it."  I'd like the aggrieved to understand that I don't mean to
condescend to you at all with that bit about Toto.  Only to Nick May ;-]

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Received on Thu Nov 22 15:18:47 2001