IP: Mixed Signals On 3G Phones

[David Farber <dave () farber net>]

> From: "Reilly, Patrick" <patrick.reilly () intel com>
> To: farber () cis upenn edu
>
> Mixed Signals On 3G Phones: The new generation of Internet-ready mobile
> phones is being tested in Japan
> Are they all they're cracked up to be?
>
> 09/27/2001 Innovation Far Eastern Economic Review
>
>   IT'S HERE. After years of hype surrounding third-generation wireless
> phone systems, real people are using real 3G phones in Tokyo. The
> world's first 3G service, known as Foma, which stands for Freedom of
> Multimedia Access, will be launched by telecoms operator NTT DoCoMo in
> earnest on October 1.
>
>    But since May, Tomoaki Kabe, a self-confessed cellphone e-mail and
> Internet junkie, has been one of the 4,500 monitors using Foma on a
> DoCoMo-subsidized trial. With Foma, Kabe has been able to access
> DoCoMo's popular mobile Internet service, i-mode, more quickly, and read
> 5,000 characters' worth of e-mail in each message. "That's way better
> than the 400 characters on my current phone," says the Tokyo-based
> technology consultant.
>    But 3G's promoters promised far more than longer e-mail messages on
> the phones. So what's the trial verdict? Bearing in mind that for the
> first year, service is limited to Tokyo, expanding nationwide only by
> well into 2002, early users say that if DoCoMo irons out the hardware
> snags, simplifies billing and lowers the cost of data downloads, Foma
> will be good, but by no means earth-shattering.
>
>    "I'd definitely buy the phone if the service was cheaper," says
> Satoshi Ueda, Tokyo-based graphic designer, gadget fiend and fellow Foma
> monitor. Early models are expected to cost around $800 before any
> subsidies from DoCoMo. "But there's nothing new on the service that I
> really feel I must have."
>
>    That's a chilling sentiment for telecoms companies around the world
> that have invested billions of dollars both for similar 3G technology
> and operating licences and want to make money quickly from Foma. These
> companies want "must-have" not "maybe" technology. On the plus side,
> monitors say the handsets are attractive and function well -- though
> early technical hitches still occur.
>
>    While both monitors had plenty of criticism, they agreed on one
> important point: Faster data services meant a more pleasant on-line
> experience, and that meant that they were inclined to spend more time
> on-line. That's a key point, since mobile-phone companies around the
> world are all facing a decline in the average amount of revenue per
> user, in the face of increased competition and more savvy phone usage.
>
>    Three different Foma options are being tested by monitors and will be
> the first to hit the market. The first is the standard phone, built by
> NEC, with fast data service for wireless Internet connections and a
> computer port for connecting a notebook personal computer to the
> Internet. The second is Matsushita Communications Industrial's Panasonic
> brand visual phone, essentially similar to the standard phone but with a
> built-in camera for videoconferencing and taking video and still
> pictures. And the third option is a Panasonic data card, which slots
> into a notebook PC to enable wireless-data communications and Internet
> access.
>
>    Graphic designer Ueda's blue clamshell-design visual Panasonic phone
> is larger than regular Japanese cellphones, but not significantly
> different from the latest models elsewhere in the world. Despite the
> size, it still slips neatly into all but the tightest pockets. To get
> over the critical early-user problem for communications devices --
> nobody else to talk to -- DoCoMo issued Ueda with two handsets. "As a
> regular mobile phone it works well," says Ueda, "and the video
> connection also has been good, but it's an expensive way to call."
>
>    Like Kabe, Ueda complains that battery life for the handsets is
> limited to less than a day's real-world use. DoCoMo claims 35 hours'
> life, if you don't use the phone much, pledging an improvement to 50
> hours by October and 100 hours by next year. But both monitors carry
> spare batteries during the day. They also complain of patchy but
> improving coverage areas and intermittent failure of the phones.
> Sometimes, the phones simply shut themselves off, which is annoying if
> you find 17 messages at the end of the day because you didn't know it
> switched itself off while it was in your briefcase.
>
>    Both monitors pointed out there was a lack of content tailored to
> meet the service's performance abilities. They said the data-connection
> costs -- including those for the video service -- are too high. Service
> area is also still limited; Kabe can't use the phone at home. And until
> next year, users won't be able to share one number with their existing
> handset or buy a dual-mode handset that will work on both older,
> nationwide networks and Foma.
>
>    Another criticism was that services specific to 3G -- such as video
> on demand or music -- were almost nonexistent during the trial. "So far
> DoCoMo hasn't understood what to provide as content," says Ueda. That
> may change soon. DoCoMo has already rolled out its M-Stage video,
> on-line games and digital-music service on another, older digital
> network known as personal handyphone system, or PHS, which has slower
> data speeds than Foma. DoCoMo plans to roll out a video-clip download
> service for Foma this year, and M-Stage for Foma in 2002. DoCoMo's
> hardware roll-out plan also shows the company expects to have personal
> digital assistants, music terminals and improved visual and standard
> phones within a year.
>
>    DoCoMo prepared written answers to the REVIEW's questions about the
> monitors' experiences. The company acknowledges the power cut-outs,
> coverage issues and battery life, and says it has addressed and fixed
> most of the glitches based on the feedback from the monitors. It
> believes that the manufacturers of the handsets will have significantly
> improved their products by the end of the year.
>
>    "We intend to make continued improvements with the aim of achieving
> usage times on a par with those of existing services," the company said
> in a statement.
>
>    The bar is high, since Japanese consumers currently have the lightest
> handsets with the longest battery lives of any systems in the world.
> Most importantly, DoCoMo does appear to have heard the message about
> costs and pricing structures. Many wireless users find existing pricing
> plans complicated and have separate contracts for e-mail and wireless
> Web-surfing and for voice calls. With Foma, DoCoMo is adding a third
> feature, a timed-data connection.
>
>    DoCoMo says it has introduced pricing plans that cover all three
> communications modes. "This eliminates the need for separate agreements
> for each communication mode." Plans start at $35 per month with around
> 20 minutes of free calls to $120 per month with around 150 minutes of
> free calls. The company has slashed its charges for the i-mode-type
> service -- known as packet service, which is based on how much data you
> download -- by 90%, but Kabe and Ueda think that since data downloads
> are getting bigger, it will still prove expensive.
>
>    That may be why DoCoMo is trying to woo corporate customers to Foma
> first, and has begun marketing business-specific services on Foma. One
> option is leased-line connections using Foma so that remote locations
> such as construction sites -- a massive industry in Japan -- could be
> permanently connected to the corporate network. Given that Foma's early
> days include limited service areas, limited battery lives, lack of
> content and few friends to share a video call, most customers may be
> more interested in being seen with the latest technology than actually
> using it. In Japan, however, that initial market may not be too small.
> "When people see me use the phone, everybody wants to know about it,"
> says Ueda.



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