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Will Video Be the W-CDMA Dark Horse App?

Will Video Be the W-CDMA Dark Horse App?

There have been no eye-catching marketing events or even any anecdotal evidence to suggest that NTT DoCoMo's FOMA - the world's first third-generation wideband CDMA service - is yet on its way to becoming a Japanese social phenomenon to rival the once sensational i-mode, DoCoMo's existing mobile Internet service.

Having already suffered a barrage of jeers for the delay in rolling out FOMA (Freedom Of Mobile multimedia Access) from May to October, DoCoMo wanted to carefully manage the start of its commercial 3G service with a limited rollout both in terms of the number of handsets available and the service area covered.

"It makes sense for DoCoMo to tightly manage the service just to ensure that there aren't any problems in terms of overloading the network," says Kirk Boodry, telecoms analyst at Dresdner Kleinwort Wasserstein (DKW) in Tokyo. "Better safe than sorry," he says.

By all accounts, given the complexity of the W-CDMA technology, the enormous amount of software, and the fact that it is a completely new system, a limited rollout may be all that DoCoMo and its suppliers could manage at this point.

Only 30,000 handsets were released in the market, of which 11,000 had sold in the first month - a very small number of handsets for one of the most technology-hungry markets in the world.

Sold Out in Three Days
Although many analysts believe the initial killer app will be mobile access to the corporate network - "This is a corporate product," says DKW's Boodry - one dark horse application is turning out to be the video. Despite the high price (about $480), the initial batch of 4,000 units sold out in the first three days.

Takeharu Mita, a 37-year-old freelance writer, who almost didn't get his FOMA video phone because he overslept on the day that DoCoMo launched the service, is fascinated by the whole new world he's discovered with his video phone, which he finds less of a convenient tool than a social and cultural phenomenon.

"It will probably create a completely new code of etiquette and a new culture," he believes. Since he didn't know anyone else who owned a video phone, the people he has exchanged video phone calls with are strangers he met through the Internet. Their behavior has surprised him. For example, "everybody bows before hanging up, because this is Japan," he points out. Some people have even asked him if they could smoke while on the phone!

Although the voice quality of FOMA is much better than that of other DoCoMo phones and it offers much higher speeds of data access, the only data that can really be accessed so far is basically words, so speed doesn't really matter that much. For example, FOMA can accept e-mails and Web information that's up to 5,000 Japanese characters long - a huge improvement from the 250-character maximum on 2.5G phones. But there's no way to scroll through that information on the screen, so it's time-consuming and frustrating to read messages of that length, not to mention costly.

Applications such as music and video downloading, which would have taken advantage of the high speed offered by 3G, weren't included in the initial service offering. The service still has technical problems and limitations that make it far less reliable than a 2.5G phone; even in Tokyo there are many places where connection is impossible and access to i-mode is frequently interrupted.

Too Heavy?
People who use FOMA phones need to be extremely tolerant, since the battery life is so short that users tend to keep the handset in the recharging cradle whenever they can. Their weight is also an issue, with 150g for a video phone considered to be too heavy.

"For anyone who's knowledgeable about the technology, it's no surprise that there are some problems," says Heikki Tenhunen, vice president of Nokia mobile phones in Japan. "Customers compare it with existing technology and expect it to be better, which eventually it will be, but it will take some time," he says.

Next month will take FOMA one step further, with the expansion of coverage to a larger area around Tokyo as well as two other major cities, Osaka and Nagoya. And a new service to offer video clips, known as i-motion, will be launched. This will be the first service that will really be able to take advantage of FOMA's fast speeds of a maximum 384Kbps for the downlink and 64Kbps for the uplink.

DoCoMo expects corporate users to start signing up for the ser-vice toward the end of the year, providing a boost to subscriber numbers. "Corporate demand is not something that explodes just because the service is available," says Keiji Tachikawa, president of DoCoMo. "So, there may be strong demand at the end of the year, and we are prepared for this. We believe it's quite possible to achieve our goal."

DoCoMo is relying on corporate demand to drive the initial service and bring costs down to levels that will be more acceptable to retail users. But if users continue turning out to be as taken by video phones as they have been by camera phones, retail usage could take off much earlier than expected.

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