18.8 I-Mode: Wireless Internet Phenomenon

In 1999, Japanese NTT DoCoMo launched the i-mode, which is today considered the first wireless Internet service on the way to the 3G mobile systems. i-mode began as a "WAP-like," text-based mobile information service provided by NTT DoCoMo. By 2001, there were over 1600 DoCoMo endorsed i-mode sites; some were free, others charged up to $2.50 per month. DoCoMo handles the billing for the official sites and keeps 9 percent of their revenues. In addition, as of 2001 there were over 40,000 "unofficial" i-mode sites. i-mode is a brand, not a technology. The technology is packet-switched overlay, as opposed to circuit-switched digital voice, and offers "always-on" and "on-demand" access to the Internet without users having to dial up. The technology offers high-speed transmission of data at a reasonable cost. The transmission rate is currently only 9.6 kbps, but i-mode already offers multimedia applications, well-suited 3G devices with color displays, sound, and other multimedia-supporting features, and a common billing system for all service subscribers.

The i-mode mobile Internet access service has enjoyed phenomenal success in Japan, winning more than 12 million subscribers in a year and a half after its launch and reaching an unbelievable 23 million subscribers by mid-2001, surpassing the number of fixed line subscribers.

i-mode wireless Internet service offers a broad variety of consumer services, including entertainment (games, download of music and ring tones, horoscopes, karaoke), multimedia messaging, information (news, weather, market quotes, transportation schedules), financial services (bank statements, money transfers, bill paying), database queries (phonebooks, dictionaries, restaurant guides, city information), and M-commerce (movie tickets, shopping, video rentals). i-mode has attracted 700 partner and 30,000 nonaffiliated content/applications providers to its platform, equally to as many as WAP content providers throughout the world. Contrary to popular misconceptions, i-mode does not attract the youth market only; a mere 7 percent of subscribers are teenagers, although their revenue per subscriber is higher. E-mail, messaging, and voice are still the driving applications for i-mode.

Several factors, including i-mode's design, content strategy, business model, and technology, have contributed to its success. Simple and functional handsets with easy-to-read screens, easy navigation through content, ability to prioritize and personalize most-popular content gave users easy access to wireless data and services. Flexible billing systems did not stop end users from using the services, and i-mode in return capitalized on the transaction service fees. Content providers were encouraged also to provide more services. There were no slotting fees, and anyone could become a partner, but only the most-attractive content providers were bound to receive premium placement.

i-mode is evolving and getting ready to jump into the next 3G stage. There are speculations that it will make its way into the U.S. market, but as things stand now, there are many cultural and technological differences between the U.S. and Japanese markets that will have negative effects on i-mode implementation in the United States.