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i-mode Strategy
Takeshi Natsuno
Managing Director, i-mode Strategy
NTT DoCoMo, Inc.
Japan
Takeshi Natsuno
Managing Director, i-mode Strategy
NTT DoCoMo, Inc.
Takeshi Natsuno is directly responsible for all of strategy i-mode, the
world’s largest wireless Internet service, with more than 34 million sub-
scribers. After he graduated from Waseda University, he first joined a
leading company in the Japanese energy industry. After gaining exten-
sive experience in real estate development projects there, he entered the
Wharton School at the University of Pennsylvania and earned an MBA.
Before he joined NTT DoCoMo in 1997 to launch the widely i-mode ser-
vice, he was an executive vice president at an Internet start-up company
from 1996 to 1997. He is well known as the founder of i-mode and was
selected as one of the 25 most influential e-business leaders worldwide by
Business Week in 2001. He has also written i-mode á la mode, a sequel
to this volume.
Foreword to the Japanese Edition
all those involved in mobile multimedia. I hope that you will read this
book, learn from it, and go on to toast your own success in this new world.
So now, let it begin – the story of the start of the i-mode develop-
ment saga.
October 2000
Keiichi Enoki
NTT DoCoMo Director, Gateway Business
Foreword to the English-language
Edition
Two years have already passed since I finished writing i-mode Strategy in
Japanese, describing the use of the service that has made specially format-
ted Internet sites and other online content available via NTT DoCoMo’s
mobile phones. Since then, the number of i-mode users has increased
in line with one of my personal theories, which I call the IT Business
Principle – namely, that in the case of information-technology business,
numbers tend to increase far beyond original expectations. When the book
was published, at the end of 2000, there were about 18 million i-mode
users in Japan; as of August 2002 the figure had surged to over 34 million.
This amounts to more than 80% of DoCoMo’s subscribers, and it is more
than a quarter of Japan’s entire population. (For details of the increase,
see Chapter 1.)
For DoCoMo, i-mode has been a major new source of earnings. In the
business year ending March 2002, the company’s i-mode data transmis-
sion (packet transmission) revenues topped ¥700 billion. This consisted
of a tremendous accumulation of tiny amounts – ¥0.3 per packet – and
accounted for more than 10% of total revenues for fiscal 2001.
Along with the sharp increases in the number of users and volume
of revenues, the past two years have seen a dramatic improvement in
the content of i-mode services. In January 2001, just after this book was
published in Japan, DoCoMo launched its i-αppli service for downloading
software applications, allowing users to install additional programs of their
own choice on their mobile phones just as they can do on their personal
xii i-mode Strategy
1 Success 1
1.1 IT Businesses Grow far More Than Expected or do not
Grow at All 1
1.1.1 The Pace Outstripped Our Expectations 1
1.1.1.1 One Million in 20 Days: 50,000 New
Subscribers a Day 2
1.1.1.2 One-Third of All Internet Users 3
1.2 i-mode: Born with a Sense of Crisis 4
1.2.1 A Multidisciplinary Team 4
1.2.2 Towards the Second S-Curve 5
1.2.2.1 From Volume to Value 6
1.3 Evolution of a Text-Based e-Mail Culture 7
1.3.1 From One-Way to Interactive 7
1.4 Beyond Talk 9
1.4.1 Content-Packed: The Virtuous Cycle 9
1.4.2 Active Users: 95% 10
1.4.3 i-mode in Mind When They Sign Up 11
xvi i-mode Strategy
2 Concepts 31
2.1 Why Has Our Success in the IT Business Been
so Overwhelming? 31
2.1.1 It is no Longer a Telecom Age 31
2.2 Differences in Platform are Meaningless 33
2.2.1 Customer Participation Boosts the Attractiveness
of Services 34
2.2.1.1 Customers and Service Providers are in
the Same Team – That is Internet Thinking 35
2.2.2 Alliances Create New Markets 36
2.2.3 Opportunities for Existing Businesses 37
2.3 Why is the Win so Overwhelming? 38
2.4 Life Today: Complex Systems 39
2.4.1 Self-Organization in Geese 39
2.4.2 Evaluating a Service in Terms
of the Service as a Whole 41
2.4.3 One Technology Cannot Lead a New Service 42
2.4.4 DoCoMo’s Role is to Coordinate
the System as a Whole 43
Contents xvii
3 Practice 45
3.1 Most People are Conservative; They Reject
What Seems too New 45
3.1.1 There Will be a ‘Wallet PC’ Someday 45
3.1.1.1 Add-Ons Stimulated the Appetite to Develop 46
3.1.1.2 One Industry Alone Could not do It 47
3.1.2 How to Kick-Start the Process? 48
3.1.2.1 Language Selection: A Keystroke 50
3.1.2.2 Our De Facto Standard Technology
Lures Content 51
3.1.2.3 A Lesson from a US Study 51
3.1.2.4 Kindergarten English? or French? 52
3.1.2.5 Thousands of Ringtones in No Time 53
3.1.2.6 Unusual Phones do not Sell 55
3.1.2.7 It’s a Mobile Phone, Stupid 56
3.1.2.8 Using Existing Web Servers 56
3.1.2.9 Minimizing the Need to Change Systems 57
3.1.3 A Business Concept That Attracts Partners in Droves 58
3.2 DoCoMo’s Role: Two Points Only 59
3.3 Sharing the Revenues Matters 61
3.4 Keep Service Providers Motivated 62
3.4.1 Four Conditions for Attractive Content 63
3.4.2 Nationwide Meetings Help Develop
an Eye for Content 64
3.5 What is Internet-Style Marketing? 65
3.5.1 The Concept Behind the Commercial with Hirosue 65
3.5.2 Who is the Lead Goose? 66
3.6 Finding i-mode Champions 67
4 Alliances 69
4.1 Win–Win Relationships 69
4.1.1 Sharing the Profits with Partners Who Share the Risk 69
4.2 Different Industries, Different Types of Alliances 70
4.2.1 Technology Alliances for the Promotion
of Mobile Phones 71
4.2.1.1 Music and Color Displays 71
4.2.1.2 Openness Enables Personalized Phones 73
4.2.1.3 Java: Continuing Use of De Facto Standards 74
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