Osaka - Sunday, January 30, 2011
Nikkei, Japan’s leading newspaper specialized in business and economy reported today that worldwide demand increase of new mobile terminals such as smart phones is positively impacting revenue of Japanese companies. Toshiba’s consolidated operating profit for 2010 April – December is expected to be the greatest in history. Revenue of many other companies engaged in mobile terminal businesses (manufacturing, services) are expected to drastically increase from previous year. Worldwide smart phone sales is expected to overcome those of PC and the positive effects of mobile market growth on company financial performance is likely to further increase.
However, in the future, competition with global companies as well as among Japanese companies would become tough and it would be a challenge for Japanese companies to improve their competitive edge.
1. How is the recent worldwide trend of mobile terminal market?
It is clear that new mobile terminals including smart phones (e.g. iPhone, Android) and tablets (e.g. iPad) are driving BtoC IT market growth. This is starting to positively impact content industries as well.
According to IDC, a research company based in the U.S., number of smart phone shipped to worldwide market in 2010 reached approximately 298 million, an increase by over 70% from 2009. Number of PC shipped to worldwide market in 2010 reached 300 million, an increase by over 10% from 2009. In 2011 smart phone market is expected to further grow by around 40% and is high probable that more smart phones than PC will be shipped to worldwide market.
2. How is BtoC IT market growth positively impacting financial performance of Japanese IT companies?
Examples of Positive Effects on Japanese IT companies
(Source: Nikkei, translated and edited by the author)
Company Name / Operating Profit (billion yen) / Operating Profit (Increase vs 2009/Effect) / Area of High Performance
Toshiba / 140.0 / 10 folds / Semi conductors, small and mid-sized LCD panels
Fuji Film* / 12.2 / Back to black / Components for LCD panels
Lintec / 17.0 / Double / Equipment for semiconductor production
Taiyo Holdings / 5.0 / 40% / Ink to preserve IC
Anritsu* / 4.3 / 130% / Measuring equipments used in terminal production processes
Soft Bank / 470.0 / 30% / Increase in mobile phone subscriptions attributing to popularity of iPhone
NTT DoCoMo / 758.5 / 8% / Terminal sales growth with new product launches
* Financial announcement for 2010 complete.
GAAP is applied to Toshiba, Fuji Film and NTT DoCoMo.
Examples of Positive Effects on Some Non-Japanese Companies
(Source: Nikkei, translated and edited by the author)
Company Name / Operating Profit (billion yen) / Operating Increase vs. 2009 / Area of High Performance
Apple (U.S.) / 7.8 billion USD (2010 Oct-Dec) / 66% / Worldwide hit of iPhone 4
Samsung (Korea) / 17.3 trillion won (2010) / 58% / IC, mobile phone terminal
1) Electronics (Toshiba)
Flash memories of semiconductors and small and mid-sized LCD panels trade with companies such as Apple was very strong. Consolidated operating profit (GAAP) for April – Dec 2010 is assumed to reach 140 billion yen, which is a drastic increase from April – Dec 2009 which was 12.9 billion yen, and is the greatest since 2002 when they started quarterly financial announcements. With increase in demand, they decided to construct a new LCD component factory in Ishikawa prefecture.
2) Components, Equipments
(1) Fuji Film
Inventory adjustment of components such as polarizer preservation film has been a challenge with more than expected orders but managed it.
(2) Lintec
Consolidated operating profit for April – Dec 2010 marked the greatest in history with strong business in equipments that are used in semiconductor production.
3) Telecommunications (Soft Bank)
Consolidated operating profit for April – Dec 2010 reached 470 billion yen, increase by 30% from previous year and greatest ever, because of revenue increase in data communication.
4) Mobile Content (MTI)
Members paying fees to benefit from music distribution site for smart phones drastically increased. The top executive commented that it is now possible for their smart phone content business to generate revenue similarly to their current mobile content business.
2010年8月14日土曜日
Japan Enters and Expands Mobile Content Business in China
Osaka – Saturday, August 14, 2010
Nikkei, Japanese newspaper specialized in business and economy, reported on August 12 in its evening paper that Japanese mobile content developers/suppliers are starting to provide contents to Chinese online customers. Since the start of “I-mode” mobile service in 1997, mobile content companies developed and provided variety of mobile contents and services and were successful
The Japanese web content companies are to leverage know-now and systems they have acquired and established through their business in Japan in expanding their business, first in China, for their further growth and sustainability.
1. What is the background of Japanese mobile content developers/suppliers entering Chinese market?
1) China’s mobile content market has an enormous potential
China has become (one of the) largest mobile phone market, and it is expected that 3G mobile phones and smart phones will drastically become popular. This means that it is quite possible for the China’s mobile content market to drastically grow, and China’s mobile content market potential is huge.
2) Japanese mobile content developers have abundant know-how
Japan is ahead of China in 3G, and mobile content developers have already been successful in their businesses in Japan. They could leverage know-how and systems they already possess in entering and penetrating Chinese mobile content market for their further growth, expanding their business globally.
3) Growth of Japan’s mobile content business slows down
Japanese mobile content companies have been successful in developing and providing such contents as fortune telling and decoration mails; however, Japan domestic market for that kind of business is no longer to growth much as it has been. Therefore, Japanese mobile content companies need to create and/or seek for other markets or start new businesses for growth and sustainability.
2. What kind of content businesses are being started in China?
1) Weather information
A mobile content company called Weathernews Inc http://weathernews.com/global.html decided to start providing mobile paid contents on weather, for China Mobile. It has already started providing mobile web service from April 2010 in which subscribers in China can participate in, and post weather information around the nation.
The company first started the service free of charge to maximize their subscribers, and after a certain period plans to upgrade the services with high added value and navigate the subscribers to continue enjoying the paid contents. This is the strategy they used in Japan and was successful.
2) Fortune telling
Another mobile content company called Zappallas http://www.zappallas.com/en/ started providing service of fortune telling by tarot reading in the end of July 2010. The company has made alliance with a Chinese motile content distributor called Vogins, and receives revenue from the online customers via mobile terminal that can use mobile web site managed by Vogins. The fee is 2 RBM (approximately 25 yen) for utilizing the service 15 times.
The top management of Zappallas comments that with slowing down growth rate of Japan domestic mobile content business it is urgent for them to start and establish new businesses. It is for this reason that the company is speeding up penetrating the Chinese mobile content market.
3) Online comics
Nihon Enterprise http://www.nihon-e.co.jp/, a Japanese printing/publishing company started providing Japanese comics on mobile to 3 mobile-server provider including China Mobile. They first plan to provide total of 50 titles such as comics on golf, and aim to expand their overseas content business, starting with China.
The company has been providing online comic contents free of charge and is to switch to paid content in the beginning of November, 2010. The company has signed with approximately 50 China local comic writers. Their China business has been in the red until the fiscal quarter ending May 2010 but hopes that in annual base it turns to black. In addition, they are thinking of providing comics by Japanese writers in the future.
Nikkei, Japanese newspaper specialized in business and economy, reported on August 12 in its evening paper that Japanese mobile content developers/suppliers are starting to provide contents to Chinese online customers. Since the start of “I-mode” mobile service in 1997, mobile content companies developed and provided variety of mobile contents and services and were successful
The Japanese web content companies are to leverage know-now and systems they have acquired and established through their business in Japan in expanding their business, first in China, for their further growth and sustainability.
1. What is the background of Japanese mobile content developers/suppliers entering Chinese market?
1) China’s mobile content market has an enormous potential
China has become (one of the) largest mobile phone market, and it is expected that 3G mobile phones and smart phones will drastically become popular. This means that it is quite possible for the China’s mobile content market to drastically grow, and China’s mobile content market potential is huge.
2) Japanese mobile content developers have abundant know-how
Japan is ahead of China in 3G, and mobile content developers have already been successful in their businesses in Japan. They could leverage know-how and systems they already possess in entering and penetrating Chinese mobile content market for their further growth, expanding their business globally.
3) Growth of Japan’s mobile content business slows down
Japanese mobile content companies have been successful in developing and providing such contents as fortune telling and decoration mails; however, Japan domestic market for that kind of business is no longer to growth much as it has been. Therefore, Japanese mobile content companies need to create and/or seek for other markets or start new businesses for growth and sustainability.
2. What kind of content businesses are being started in China?
1) Weather information
A mobile content company called Weathernews Inc http://weathernews.com/global.html decided to start providing mobile paid contents on weather, for China Mobile. It has already started providing mobile web service from April 2010 in which subscribers in China can participate in, and post weather information around the nation.
The company first started the service free of charge to maximize their subscribers, and after a certain period plans to upgrade the services with high added value and navigate the subscribers to continue enjoying the paid contents. This is the strategy they used in Japan and was successful.
2) Fortune telling
Another mobile content company called Zappallas http://www.zappallas.com/en/ started providing service of fortune telling by tarot reading in the end of July 2010. The company has made alliance with a Chinese motile content distributor called Vogins, and receives revenue from the online customers via mobile terminal that can use mobile web site managed by Vogins. The fee is 2 RBM (approximately 25 yen) for utilizing the service 15 times.
The top management of Zappallas comments that with slowing down growth rate of Japan domestic mobile content business it is urgent for them to start and establish new businesses. It is for this reason that the company is speeding up penetrating the Chinese mobile content market.
3) Online comics
Nihon Enterprise http://www.nihon-e.co.jp/, a Japanese printing/publishing company started providing Japanese comics on mobile to 3 mobile-server provider including China Mobile. They first plan to provide total of 50 titles such as comics on golf, and aim to expand their overseas content business, starting with China.
The company has been providing online comic contents free of charge and is to switch to paid content in the beginning of November, 2010. The company has signed with approximately 50 China local comic writers. Their China business has been in the red until the fiscal quarter ending May 2010 but hopes that in annual base it turns to black. In addition, they are thinking of providing comics by Japanese writers in the future.
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