Japanese Mobile Market — a Brief History

Japan is an odd land where things are so advanced yet it can be backwards. Several times, I’ve been asked to fax my e-mail address, which sums up how ass backwards this country can be.

Back when Americans thought the Nokia 8890 was a status symbol, Japanese users were flashing their fancy flip phones (feature phones, as we call them here) with stunning color screens, amazing motion graphics and incredible audio speakers. Aside from basic phone functions, people browsed the Internet. Listened to music. Played games. Even watched TV on flip phones. I remember each Tokyo visit in the late 90’s-early 2000’s, looking down at my pixelated turtle-colored Nokia screen and thinking: wow, Japan is the future.

Fast forward to 2013 and that’s no longer the case. At least with mobile phones.

If you think Google is evil and Apple is too Draconian, they have nothing on Japanese telecoms. Japan is dominated by three major mobile carriers: NTT Docomo the Japanese equivalent of Verizon. au/KDDI which is closest to AT&T and SoftBank that would be T-Mobile, since they are the newest player in Japanese telecom.

Docomo and KDDI dictated the mobile landscape for years. I say that lightly but in a country that is mobile-centric, controlling mobile is controlling most of Japanese tech. Telecoms maintained closed market places, ensured software was proprietary, steered hardware movement, had a grip on the content space eg: ringtones, wallpapers, video, music, and even managed email.

When the iPhone arrived to Japan in 2008, it basically turned the market upside down.

SoftBank — the youngest carrier of the three — took a gamble and was the only telecom in Japan to carry the iPhone. au/KDDI woke up three years later following SoftBank’s lead in 2011. Docomo, the most dominant carrier in Japan, refused to carry the iPhone until the 5s. Yes, the 5s in September of this year. They tried to sustain their old world order. They ignored the iPhone. They pretended a market shift wasn’t happening and refused to accept the change of consumer needs until the last possible minute.

Docomo’s stubbornness didn’t seem too tragic in 2008, yet five years later, their dominance of Japanese marketshare isn’t as prominent as it once was. At a total of 62 million subscribers, they are still the leading carrier but SoftBank’s growth rate is incredible.

In only five years, they doubled their subscribers, a 78.69% subscriber difference. This number is insane.[source]

This is only the beginning for the Japanese mobile industry and boy, am I glad I am here.

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