Yoshiaki Maeda on how Docomo plans to tackle Japan’s smartphone app market



See the original story in Japanese.

This is a part of our coverage of B Dash Camp Fukuoka 2013.

You can’t discuss the history of the Japanese mobile business without talking about i-mode. This is the featurephone content platform from NTT Docomo, which many content providers used to achieve significant growth and revenue.

Of course in recent years, the market need has shifted to smartphones, especially the iPhone, and not many people have their their eyes on i-mode these days. But many of the ideas developed in i-mode live on. For example, Docomo’s competitor KDDI has had much success with SmartPass, a flat rate app subscription program similar to i-mode in terms of its subscription model.

How exactly will Docomo respond to KDDI’s smartphone success so far? At B Dash Camp 2013 in Fukuoka yesterday, Yoshiaki Maeda, the managing director of smart communication services at NTT Docomo, explained a little about the company’s upcoming strategy, revealing a few interesting figures in the process.

Docomo’s smartphone content sales generates $180 million a month

To date, Docomo has acquired 18 million smartphone users. The figure is expected to reach 40 million by the end of 2014. Their smartphone content sales grew to a market worth of $180 million, and that’s continuously on the rise each month.

Conversely, the i-mode content market is shrinking.

The growth of Docomo’s smartphone subscribers
The growth of revenue from smartphone content sales

On-the-spot purchase needs surpasses that of monthly subscription model

In the era of featurephones, monthly subscription models were very strong but it’s shifted to an ‘on-the-spot’ purchase model as our more subscribers move to smartphone users.

Monthly subscription sales vs. on-the-spot purchase sales
in the last three years

For us, by bringing the subscription user base from the featurephone market (i-mode) to the smartphone content market, we expect monthly revenue to increase to $300 million.

Partnering with new content providers

Some content providers brought conventional (featurephone optimized) content to the smartphone app marketplace, and that will never attract our subscribers.

We value our providers though, but we further expect to get new providers involved to cultivate the market. We also have our Docomo Innovation Ventures as a touch point for new companies or startups. We’ve exploring ways to work with brand new people.

When will Docomo start ‘Sugotoku’, its monthly flat-rate subscription program for smartphone apps?

We’re preparing for it to be launched very soon. It would be similar to our competitor KDDI’s strategy, but we’re still in talks with partner content providers (and/or app developers). We aspire to make it comfortable enough so that our customers will be happy to use it.