Japan Offers Key Lessons for Wireless Market Innovation in the U.S.

Survey of Japan's mobile phone consumers reveals potential product strategies for the U.S. market . Japanese wireless subscribers demonstrate a higher level of usage of, and interest in, advanced mobile phone features than do consumers in the United States, . The Japan Consumer Wireless Study draws key conclusions about the similarities and differences between the two markets, while also providing information to correlate the current state of wireless offerings in Japan with their potential for adoption in the U.S.

Japanese consumers are the world’s early adopters of the latest mobile technologies and features. The market is therefore seen as a key test bed for innovation, which is why industry professionals around the world look to Japan to understand what’s next” in wireless. Even so, it’s a common myth that Japan is two to three years ahead of the U.S. in the development of its wireless market.

While there is certainly some basis for the notion that Japan is years ahead of the U.S., NPD’s research found that it’s really not that simple. Japanese consumers are using wireless services today that will find their way to U.S. shores in the future, but they also use their mobile phones differently than Americans.”

Among the mobile phone features used more often by Japanese consumers than their U.S. counterparts were wireless Web browsing, mobile email, ringtone downloads, PDA functions, graphics and screensaver downloads, mobile gaming, picture messaging, digital music listening, video messaging, and mobile TV and video. Most notably, 76 percent of Japanese consumers use their phones for Web browsing, compared to just 12 percent in the U.S. market.

Emerging features currently available in Japan, but less ubiquitous here, also display a strong growth potential for the consumer wireless market in the U.S. These features include the following:

• Barcode reader (used by 27 percent of Japanese consumers)

• GPS (26 percent)

• FM radio (22 percent)

• Voice recorder (18 percent)

• Analog TV tuner (18 percent)

• Mobile Commerce and e-money capabilities (16 percent)

When it comes to mobile phones, Japanese consumers are always on the lookout for the latest technology trends. Japanese carriers are falling over each other to provide the most advanced features to remain competitive. While the U.S. market lags a bit in this regard, given the fact that Americans are also highly susceptible to coveting the latest and greatest communications gadgets, we can expect the domestic mobile phone market to react in a similar way to new leading-edge features.”

NPD’s research also found that the impending introduction of Wireless Local Number Portability (WLNP) is likely to create a competitive shake-up in Japan’s mobile market. Fifty-five percent of survey respondents stated that they would be more likely to switch carriers if they could take their numbers with them. TU-KA and Vodafone are the most vulnerable of the carriers, whereas KDDI (au) and NTT DoCoMo appear to be the best insulated from churns associated with WLNP.

Consumer Wireless Study Publ 20060201