On Tuesday, June 18, 2002, at 08:44 , Curt Sampson wrote:
>> Discounted - because this situation is different from what I described.
>>
>> In the situation I described there would be a proven i-mode' that was
>> implemented in Japan' where it worked both on GSM' and CDMA' including
>> interoperability from a customer point of view. In that situation AT&T'
>> would be in the position to say, let's adopt i-mode' from Japan' over
>> WAP' from Europe' because what the Japanese' have developed and
>> implemented is already operational and proven to work.
>>
>> On the other hand, in the situation now, there is no operational i-mode
>> other than for PDC and this means customisation if i-mode was to be
>> implemented anywhere else. Customisation is - to say the least - less
>> smooth a process than the roll-out of an already adapted solution.
>
> Uh...no, no, no, no, no. There are certain parts of the model that
> are not so technology related that are very well proven to work. Ring
> tone downloads, for example. JASRAQ makes more every year on ring tone
> royalties alone than AT&T makes on mobile data. Yet what does AT&T do?
> They drop that aspect completely, apparently because they also think
> it's a "toy."
I don't understand what the relevance of this is to the question of
"would Japan' have been able to export i-mode' to AT&T' and others in
the face of having adopted GSM' and CDMA' or whould Japan' have been
constrained by GSM' and CDMA' in a way that would have made i-mode'
impossible for them to develop or deploy".
Also, you are talking about AT&T and indirectly i-mode (parts of the
model), while I was talking about AT&T' and i-mode' which are of course
not identical and it is by no means certain if one can conclude so
easily from AT&T in this world to AT&T' in world'
Finally, it is my understanding that downloadable ring tones have long
been a big success in Europe with GSM. So, should we take your comment
as intended to illustrate that downloadable ring tones would only be
deployed and successful in Japan with its PDC infrastructure, but not in
Japan' with its GSM' and CDMA' and PDC' mixed infrastructure nor in
other countries with GSM or other countries' with GSM' then, the
observation of downloadable ring tones in Europe with GSM (not Europe'
with GSM') would have proven your illustration to be wrong. But then
again, I am not sure if that is what you intended to show.
> And so they don't get widespread adoption, they don't make any
> money, and the whole thing collapses into another WAP fiasco. And
> you still can't get a damn train timetable from a mobile phone in
> the U.S.
I assume that the fact you mention WAP and fiasco together is *not*
meant to suggest that WAP is the reason behind downloadable ring tones
not being available from AT&T. But no matter what the reason for AT&T
not offering this service may be, I dare to suggest that in the parallel
world' where Japan' had adopted a mixed infrastructure where the IPR in
PDC' has been transferred to ARIB' and GSM' and CDMA' coexist with the
de-monopolised PDC', where DoCoMo' came up with i-mode' for PDC', GSM'
and CDMA' and thereby set a de-facto standard worldwide, AT&T' have
implemented downloadable ring tones service' after initial reluctance
when one of their domestic competitors implemented it on their CDMA'
based i-mode' service and made JASRAQ' even richer than JASRAQ.
> I am pointing out that we have the most advanced mobile phone system
> in the world here, at a fairly reasonable price. (In some cases,
> such as e-mail, far, far cheaper than any other mobile phone system
> in the world.)
The only reason why the PDC market in Japan has become more competitive
is because operators locked into PDC got their butts kicked by the new
kid on the block: PHS and eventually two operators (now merged into
KDDI) were allowed and encouraged to go CDMA.
I am saying that this effect would have been significantly amplified if
a) GSM had also been introduced to coexist and compete and b) CDMA had
been introduced to be compatible with CDMA as it is used anywhere else
so that no customisation of handsets and radio gear would have been
necessary.
I am also saying that if PDC had been allowed to remain unchallenged by
any competition from PHS and CDMA, the mess would even be bigger than it
is as it is and you would not be able to claim fairly reasonable prices
for your argument, which is very questionable because those prices are
not thanks to the domination of PDC but thanks to the little competition
there is to PDC in Japan today.
> You are saying this will be bad for us one day.
The domination of PDC has already been bad for us and anybody else. It
has held back the Japanese wireless industry from taking advantage of a
vital opportunity that is traditionally an opportunity in which Japanese
industry excels: exporting value added technology products and shaping
the way in which products elsewhere progress, regardless of where and
how they have originated.
If you look at the history of Japanese industrial successes you will
find that whenever the Japanese were successful in making new leading
edge products, it has always been the following pattern:
a) study the design of foreign products and established standards
b) adopt and copy the above
c) improve the above
d) export the improved
e) shape the further course of products and standards globally
This is the Japanese way and they are better at this process than most
other folks. And the world can be thankful that they are because the
world is richer in improved designs and products wherever the Japanese
take part in the international competition and hence anybody is loosing
out wherever the Japanese keep out of it.
Unfortunately, in the wireless arena, due to the domination of PDC in
Japan, the Japanese have been kept out of the international market. They
have been denied to apply their success formula. The world has been
denied the valuable Japanese contribution it could have expected. And
all in the name of giving DoCoMo a means to cheat in order to stay ahead
of its competitors in the domestic market, the questionable benefit of
which is far overshadowed by the cost of the lost opportunity for market
participants and the economy as a whole.
With the world cup going on right now, I am tempted to present this
analogy...
Imagine the world cup would be held without Brazil and England (and
perhaps Germany?) or whatever may be considered the most competitive
teams in the world because those teams have domestic interests that seem
to be in conflict with attending.
Not only would the world cup be less competitive and less interesting,
but also the quality of world soccer would suffer and the title of world
champion would carry less weight because the best teams are not taking
part.
On the other hand, the teams to keep out are likely to suffer as well,
because they do not get to compete against each other and against other
highly competitive teams and in the process they would themselves become
less competitive. This would then lead to the domestic leagues in those
countries also becoming less competitive and less interesting.
PDC domination in Japan is like forcing the Brazilians to adopt
Australian Rules, suddenly they don't play the same game anymore and so
they can't participate in the world cup. Everybody looses out. Of
course, if you are Australian you may take this assessment as an insult
against Aussie Rules and argue that the Brazilians are better off with
Aussie Rules instead of Soccer.
> Well, I'm working in the realm of the practical, and you're still
> working in the realm of the theoretical here. So maybe a few years
> down the road you can say to me, "I told you so." But I'm willing
> to put some money on this. What odds do you want to give me, and
> what exactly should be the criteria for the bet?
We don't have to wait, the criteria is already there ...
How many networks have adopted PDC worldwide ? How many CDMA ? How many
GSM ?
How many SMS every day ? How many Japanese mobile originated email
messages ?
How big is the economy created by GSM as a percentage of GDP of the
coverage area ? How big is the economy created by CDMA as a percentage
of GDP of the coverage area ? How big is the economy created by PDC as a
percentage of GDP of the coverage area ?
Global average cost/earnings ratio of GSM networks, CDMA networks, PDC
networks.
etc etc etc
See, the Japanese government had their brightest people analyse that
sort of data and they have long established that they should have gone
for GSM. They even tried to convert but found that they had locked
themselves out pretty well. They were scared of cleaning up the spectrum
mess they had created earlier and so they opted for the "little"
solution: CDMA customised to the Swiss Cheese of Japanese spectrum. That
was better than nothing but it is far short of what they could have
done. Just as with the problem of bad loans in the Japanese banking
system, nobody wants to touch the stuff and so little happens, but if
they want to get the economy back on track eventually they will have to
clean up all those bolders that are lying around as obstacles in various
industries that would otherwise be the work horses of the Japanese
economy. Wireless is just one of those.
>> I am not "ignoring", I am disputing that Japanese phones are better
>> overall.
>
> Well, in what way are they not better? In what way that really affects
> us as consumers, I mean? That's really where it starts and ends.
It seems to me you have a pretty antiquated picture of the GSM phone
market. Have you been to GSM markets lately, ie Hong Kong ? Have you
checked out the phones ? You would be surprised how many toy phones
there with fashion dominated features just like those Japanese phones.
And most GSM phones are as light and have as much battery lifetime
(compare city to city and rural to rural usage please) as Japanese PDC
and CDMA phones. And also, you could always witness very innovative
value added products and services that according to your perception of
constraint by the GSM standard should not have been there. In fact there
are many localised value added services available, particularly in Hong
Kong.
If you make an effort you will find that there is not that much
difference in the mainstream phones. However, when it comes to business
tool phones at the high end segment of the market, you have more choice
with GSM phones. Also there are some features that have little to do
with the wireless system but they happen to be associated with GSM, such
as SIM cards, which adds a lot of convenience to the phone, such as
portability of the number and the phone book, roaming onto incompatible
networks and the ability to use two SIM cards in your phone, ie. one for
business and one for private use and switch between them and forward
calls from one to the other etc etc etc Further, there are features
which on the face of it may seem inferior to alternatives on PDC but if
you have actually used it you'll find various aspects superior, such as
is the case with SMS versus email, because SMS is QoS, which opens a
number of other applications, such as catching someone right at the
moment when they become available after having been out of coverage
deliberately or involuntarily and the fact that the number of users you
can reach by SMS is far larger than the number of people you can reach
by email ***while they are out of their office***.
> After
> all, the Mac has been a great consumer experience despite the fact
> that, up through OS 9.x, the internals of the OS were complete rubbish
> compared to Windows NT, and even OS X still has some major problems
> inside (such as the lack of decent internal Unicode support). A lot of
> products overcome problems of technological stupidity and become great
> for the customer to use. And as a customer (though perhaps not as a
I don't think Macs compare well to mobile phones. Besides, we are
talking about branding here, not competitive frameworks for industries
to foster competition between manufacturers.
So, if we are talking about branding, we have to examine how DoCoMo is
doing against similar brands from the GSM and CDMA world. Now, the last
time I checked (last year) I didn't see DoCoMo showing up on
Interbrand's hit list of the world's strongest brands. Orange and
VodaFone were high up there, but Voda doesn't brand its Japanese PDC
based service under the VodaFone brand. In any event, Orange continues
to be the world's strongest mobile brand, with customer loyalty that
matches that of Apple, but Orange is only present in GSM and CDMA
markets.
So, again, looking at it from a branding angle, there too, GSM and CDMA
wins hands down. Another indication that economies of scale do matter.
You may say, but this is unfair. And I would respond YES: "unfair
advantage" is the term used by economists. Being able to leverage from
the huge global market GSM has created while some competitors are not,
that may well suffice the definition of unfair advantage. But that is
what I was talking about all the time.
> programmer), I'll take the great product with the stupid internals over
> the lackluster product with the well-thought-out internals. And so will
> the rest of the world; this has been shown consistently over and over
> again.
"Stupid internals" aside, this seems to be an argument in favour of GSM
and CDMA, at least for the part where "the rest of the world" is
concerned because that's what the rest of the world has been doing:
adopting GSM and CDMA.
When the Europeans were phasing out their old NMT networks, they
typically sold the gear to Eastern Europe and still today there is a
market for old NMT gear in developing regions who have no or little
wireless infrastructure. Now, I wonder, what did IDO do with their old
PDC gear when the moved to CDMA ? It would be interesting to find out if
they tried to dump that on the international market for second and third
hand wireless infrastructure. If they did, they did not seem to have
found any takers, which wouldn't surprise me at all.
It would seem that even when it was brand new, PDC hasn't managed to
find any takers other than the ones who were forced to buy it because
they didn't have any other choice. And at the first occasion when two of
them were given the choice they migrated to CDMA. Now, if you ask me,
that is a pretty bad track record.
>> But even if they did, still PDC and more importantly the way it has
>> been
>> implemented is in a mess that should be sorted out.
>
> I certainly agree with this.
>
>> There is no correlationbetween the phones and that mess. The Japanese
>> manufacturers have learned how to make phones partly ***despite*** the
>> mess,...
>
> Right.
>
>> ...and partly because they don't stand a chance with their products
>> in the international market no matter what.
>
> Woah! This sounds like you're saying that this protectionist mess may
> have helped create the wonderful phones we have here today. Are you sure
> you really meant that? :-)
in part yes, but be careful - this doesn't mean that the very same
manufacturers would not have come up with better products given a
competitive global market that GSM would have opened up to them. There
is of course also the fact that competition from PHS and CDMA (although
customised for the Japanese spectrum) have contributed significantly.
> If they were "liberated" by having to conform to global standards,
> rather than have the ability to speedily change their systems (sometimes
> in response to consumer demand), probably a lot less.
There is no evidence for that. Those layers within GSM which are
difficult to change due to installed base are just as difficult to
change within PDC. For value added products the standard provides a
platform for innovation more than it restrains.
Heck, we have been able to drop in one single box, a new network element
(XLR) which operates at very low levels of GSM (SS7/MAP signaling
layers) into the GSM environment without any changes required to GSM
standards whatsoever, yet the dropped in XLR entirely and fundamentally
changes the way how GSM typically handled sign-on, authentication and
charging before the advent of an XLR. For example, you don't pay your
home network anymore, you pay the network that you choose to visit and
the home network is completely kept out of the process. On the face of
it, this would seem to violate any wireless standard there is, including
GSM, because it turns the established processes upside down, but it was
possible to do this without any changes nor amendments to GSM becoming
necessary.
At no point in the design and development have we felt to be constrained
by the GSM standards even though we had set out to turn the way things
work upside down. To the contrary, the well written and openly available
GSM standard documentation has helped us to focus our effort on the
interfaces we needed to accomplish in a very clean design what we wanted
to do. I am sure that people who have worked on similar projects at
Nokia or Ericsson can report similar positive experiences with ETSI
standards.
Even the fact that you can subscribe to the entrie ETSI documentation on
CD which is then shipped every three months to you, any place, even the
Australian outback ;-) and there is even a hotline for clarifications,
that shows you how committed they are to make the standard work
***for*** you, not against you.
Now, that is not to say that DoCoMo may not do similar things with PDC,
in fact I wouldn't know, but the fact remains that the economies of
scale are missing.
> You ocasionally mention computing standards and such to me, and yes,
> I'm a fan of open standards such as TCP/IP. But when you're talking
> about the telecom world, the IETF and TCP/IP are a lot closer to Docomo
> and PDC than they are to the ITU and GSM. Back when all this started,
> the IETF were the renegades, flouting international standards and
> international standards bodies, and playing with their toy protocol
> that didn't have one tenth the capabilities. If you want to know what
> the computer-industry equivalant of the GSM crowd is, well, it's right
> there: the same folks that created GSM created it. It's called ISO/OSI,
> and I think we all know where that is now.
Wrong, GSM is not an ISO standard and there was never any working group
at ISO doing anything related to GSM. The GSM standard is driven by the
GSM Association (the GSM user group) and supervised by ETSI, the
European Telecommunications Standards Institute, which does nothing else
but supervision of telecom standards.
A notable difference between GSM ETSI standardisation and ISO is that
standards are driven by the users more than the vendors. Go to any ISO
working group and the ratio of vendors to users will be something like
10:1 or even higher (the ISO working group I once participated in had
10:1 ratio, YMMMV). And I doubt that any major operator of data network
services has been sitting in the OSI working group, so there the vendor
to user ratio may have well been 10:0. This is different with GSM. The
GSMA has about 500 members and 400 or so are network operators,
pronounce: users; the rest is regulators and manufacturers, pronounce:
vendors. In terms of voting rights, users have a 4:1 majority. Thus it
is the users of the GSM standard who call the shots not the vendors.
Let me see. How is that with PDC ? There is, oh well, one vendor, which
happens to also be a user, but does any other user have voting rights ?
Do J-Phone have a vote when DoCoMo the vendor wants to change something
in PDC for DoCoMo the user, particularly if that change would mean an
advantage to DoCoMo the user but a disadvantage to J-Phone, the other
user ? Well, I am sorry, this model doesn't seem to be all too different
from the OSI committee.
>> Clearly, if the Japanese cellular system is so superior to anything
>> else
>> that no matter what happened nobody would choose anything different
>> anyway, why would this superior system then be so threatened by the
>> advent of alternatives that you seem to believe it would not only
>> disappear but also none of its properties would survive ?
>
> I don't think it's terribly threatened by the alternatives at all.
> I'm not sure what gave you that idea.
because you had made a number of statements to the effect that you
seemed to dislike the prospect of PDC having to coexist with GSM and
CDMA on equal terms in the Japanese domestic market. You also made
statements to the effect that you seemed to believe that if Japan had
such a mixed environment then Japanese mobile phones would be less to
your liking than they are now, although you claim that they are superior.
Therefore, if you feel that Japanese PDC phones are superior, then
clearly you should not have a problem with PDC competing on equal terms
in a mixed environment for the superior features of all technologies
will set the standards in the competitive environment. If PDC phones are
superior in all aspects, then that would force the GSM and CDMA handsets
into playing catching up, while no features from GSM and CDMA would make
their way into PDC and in the end all handsets would have only the
features from PDC but not of those features they original started out
with.
Of course I don't entirely agree with that scenario, I believe that
***all*** competitors would gain from competing against each other,
because that is the nature of competition.
> It does seem to me that the alternatives show little sign of being
> able to catch up. There's some hope now, but it's the first there's
> been for many years, and who knows where it will really go.
kind regards
benjamin
Received on Wed Jun 19 01:54:11 2002