Internet A La I-Mode

  • In Japan they are speaking in thumbs. Everywhere you look--in restaurants and in movie theaters, on crowded trains and in taxicabs, in baseball stadiums and in university lecture halls--the New Man and New Woman of Japan walk and sit with head down, arm extended and one thumb feverishly tapping buttons on a new kind of cell phone, one that lets you surf the Web using a technology called i-mode.

    For 19 million Japanese, i-mode is the preferred mode of communication. Kids are e-mailing one another pictures of Hello Kitty, the cloyingly ubiquitous national feline. Teenagers are building networks of i-friends that they e-mail but never see. Office workers are trolling online, looking for love. During the recent Coming of Age Day holiday, which honors young people turning 20, mayors in several villages walked out of celebrations because students in the audience couldn't stop their thumbs from wagging. "Forget my phone at home?" Takumi Ebina, 16, asks incredulously. "I would never do that. I can't imagine getting through the day without i-mode."

    I-mode isn't just a fancy cell-phone service. It's the vanguard of Japan's hottest company, NTT DoCoMo Inc., which is making inroads and investments all over the globe, including a 16% piece of AT&T; Wireless, which it bought for $9.8 billion. DoCoMo plans to wage the next great wireless war based on the idea that you will no longer need to carry an assortment of Palm Pilots, Blackberrys, Discmen, pagers and phones to keep in touch or keep in tunes. In DoCoMo's world, you'll carry only a single broadband phone to e-mail friends, download and listen to music, read magazine articles and log on to thousands of i-mode websites for anything from menus to dating services to medical help. You might even use the phone to call somebody.

    And while i-mode operates at only a poky 9.6 kbps, the company promises that when its service moves to third-generation wireless technology, 3G, it will blow away anything on your desktop PC. DoCoMo will introduce 3G in Japan this spring and then begin a global rollout in Europe, first using a somewhat slower interim technology. AT&T; Wireless plans to offer a version of i-mode later this year.

    To Web-surfing Americans, i-mode may seem like a step backward. Their PCs can do and see a whole lot more than the i-mode-loving Japanese can find on their little phones. But i-mode isn't designed to compete with the desk-bound Web. "With a mobile phone, people don't have much time to read through a lot of data," says DoCoMo's Keiichi Enoki, one of i-mode's creators. "We thought people would want bursts of information while they are on the move."

    And what are those info bursts? There are already some 40,000 sites designed specifically for cell phones, many of them truncated versions of regular Web portals, so there isn't a shortage of content. Much of that content is about sex, sports, sex, astrology, sex, animation and sex. Some of the most popular sites offer downloadable screen savers or animated avatars to attach to e-mail. Others offer a wide selection of ringing tones, including such preselected jingles as It's a Small World.

    There are plenty of practical applications too--sites that navigate train routes, make concert reservations, find restaurants and follow the stock market, all on the fly. Says Kirk Boodry, a senior analyst at Dresdner Kleinwort Wasserstein, in Tokyo: "These are different animals. The fixed-line Internet is about richness of content. The mobile Internet is about reach of content."

    DoCoMo figured that out early, in part because it's a radical company for Japan. Run by a collection of castoffs and misfits from parent company Nippon Telephone & Telegraph (think of the old AT&T;, only slower), DoCoMo isn't bogged down by Japan's sclerotic management style. The company's $175 billion market cap now dwarfs NTT's, and it is projected to earn $3 billion on sales of $39 billion for the fiscal year ending March 31.

    DoCoMo's phenomenal success came in large part because of Enoki's shrewd strategy: make it easy to use, easy to pay for and loaded with gimmicky content to dazzle and entertain Web novices. "The Internet scared Japanese people," says Yukiko Takahashi, a manager at Bandai Networks, a subsidiary of the toy company that gave the world the Tamagotchi virtual pet and created rudimentary games that have been big hits on i-mode. "It made people think about connecting a PC, using a keyboard, modems, ISDN lines, stuff they didn't understand and stuff that cost too much. The smartest thing DoCoMo did was not to use the word Internet in any of its promotions."

    Indeed, Japan and the Internet have gone together like sushi and ketchup. It's still surprising that tech-savvy, gadget-happy Japan sat on the sidelines during the boisterous dotcom boom. (Remember that?) Even today, in Japan, the world's second largest economy, only 625,000 homes have high-speed Internet access, out of a population of 126 million people. PCs never caught on, in part because the first models were ugly and bulky and used keyboards the Japanese aren't comfortable with. "We're keypad people," says DoCoMo's president, Keiji Tachikawa.

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