Posts Tagged ‘KDDI’
As we all know the US mobile handset market (and most markets worldwide too), is very heavily subsidized by the carriers. That is what allows us the consumer to buy a $500 phone for $199. The carriers have a vested interest in subsidizing the handset, that’s what keeps the customers (both new and old) coming in and paying higher monthly fees. The handset makers too have an interest in getting their handsets out to the consumers cheaply as it impacts their bottom line directly. But all this is at a cost. In Q3 2008, AT&T had to take nearly $1 billion hit to its bottom line due to iPhone subsidies, and that is just for one phone. Surely, the execs at the carriers would be sorely tempted to get rid of these subsidies to improve their bottom line and also reduce the huge debt they carry (nearly 50 to 70% of their assets).
However, before they do, they need to look at the Japanese mobile industry. That should certainly give them a pause. In January 2007, Softbank introduced its ‘White Plan’ which did away with subsidies for the handset in exchange for lower monthly fees. The other two carriers, DoCoMo and KDDI quickly followed suit. Since then, the handset sales in Japan have been down nearly 30%, according to Jeita, the Japanese electronics association. The average handset lifetime has also increased to 3 years.
Also, the Japanese carriers already have a healthy source of revenue other than fees, namely the charges they collect for allowing users to charge their purchases to the phone. In US, there is already a move towards building an alternate source of revenue, namely the application stores for the smartphones. However, those are primarily owned by the handset maker, not the carriers. Carriers have been slow to adopt this strategy and have had limited success with the stores they have launched.
It has to be very tempting for the US carriers to follow suit as DoCoMo is reported to announce an increase in operating profit by 20% due to reduction in subsidies for the period April-Dec 2008. However, if the US carriers followed their Japanese brethren, I believe the handset sales will be down more than 30%, more likely around 44%.
AT&T grumbling about the $900 million subsidies in its conference calls and report was not just a CEO’s vent, it was a balloon floated to test the waters. While the market and handset makers are not ready to see the subsidies go the way of dodo anytime soon, investors are chomping at the bit for that 10cents per share increase to their portfolio. There is a strong likelihood that US carriers will get rid of the subsidies, especially on the high-end phones in two to three years, if not sooner.
We have talked about the various concept phones that the formidible KDDI au Design Project is working on including the Ply and the musical instrument phones. Today at CEATEC event in Japan, KDDI showed of those phones and a few others including two that look like satellites and have solar panels on them for charging. Take a look at the gallery and keep your fingers crossed that these become reality some day soon.
From the formidable and futuristic KDDI Design Studio that brought phones and musical instruments together, comes another concept phone: Ply. Ply takes the name and inspiration from the multi-layered plywood. The various features on the phone are in the different layers. For example, there is a projector layer for presentations, printer layer for printing, etc. This looks tres cool. Now, if only dreams come true. Photos courtesy of CScout Japan.
The Japanese are known to miniaturize and mobilize things that we here in US like big and bold. Following in that exquisite trend, the AU Mobile Communications unit of KDDI a telecommunications company and Yamaha have brought their powerhouse resources together to design some very interesting and cool stuff. The AU Design Project x Yamaha collaboration has some nifty, futuristic prototypes like Band in my pocket, Trio in your hand, Box to Play, Key to Touch and Sticks in Air. What are these you ask? These are all fun, creative, fusion devices that combine mobile handset with musical instruments. Let’s take a look:
Band in my pocket is a handset to which you can attach various accessories to create different instruments from harmonica to trumpet. The sound is produced by humming, “not mouth positions, so you can effectively play the instrument by making the proper tones yourself” according to Trends in Japan. The remaining controls for the instruments are on the accessories.
Trio in Hand is dual-flip phone that includes a scratch pad and sampler for mobile DJs while Sticks in Air act as two drumsticks that you can play in the air and the sticks recognize the beat through sensors. You just put the two sticks together when you want to use them as a phone. Cool, huh?
Box to play is a fold-able box containing a synthesizer, a scratch pad and other fun instruments as you can see in the picture below. Key to Touch as the name suggests is an electronic keyboard on the phone.