iFad's deliberate marketing blur - Naver / Livedoor

With 700,000 units sold on launch day including pre-orders (according to Gene Munster, Piper Jaffray), iPad already found its spot on the market. Apple hypists fueled this early success, but other segments may follow, including technophobe seniors who are neither interested in computing nor in exotic web browsing.

Other players targeted this segment, but the Orange Hello and Orange Tabbee proposition, for instance, is clear a deterrent for hypists (see "Orange Hello, is it me you're looking for ?"). Why ? Because it is marketed around functionality-segment duos that mirror the very classic engineer-marketer binome.

The smartest thing about the iFad is the deliberate marketing blur : Apple refuses to build artificial segmentations and prefers to let the market decide, hoping the device will find more niches than initially thought. But the manufacturer pushes the concept with a clearly identified "software-level warranty" to help the hardware concept look more sustainable in the potential purchaser's mind : iPad v1.0 is not the best tablet*, just like iPod was not the best PMP or iPhone the best smartphone, but just like iTunes came from Apple computers to secure the launch of iPod, iPod music platform served as a base for the iPhone, and iPhone apps are paving the way for the iPad.

So if the iPad is not a category killer per se, it could help kill artificial categories, and tear down artificial walls.

Just one word about NHN / Naver, who would be about to snatch the Livedoor portal and its 30 M subs put on the market by LDH Corp (formerly Livedoor Holdings). It reminds me of the Daum / Lycos deal a long time ago. Korea gains an entry point in Japan the same way it did in the US : in a very traditional way. And I hope Naver has bigger plans than Daum. For instance, I wonder which role Naver, as it enters a new country using non-latine alphabet / characters, intends to play in the promising hosting business related to Internationalizing Domain Names in Applications (IDNA).

mot-bile 2010

* and certainly not the best ebook : too heavy, UI and screennot optimized for reading...

DoCoMo's Xmas : Fuji and KT Freetel

2.6%. That's as far as Ebeneezer Scrooge DoCoMo will go for Fuji Television Network, Inc. Google took a slice twice thicker from AOL but hey, that's much better than what Livedoor was allowed to grab.

NTT DoCoMo and Fuji TV are not preparing Xmas but April fool's day : "The agreement precedes the launch of "One-segment" terrestrial digital broadcasting on April 1, 2006, which will present new opportunities for linkages with mobile services."

I'm much more interested in their deal with KT Freetel : 10%, that's a little more ambitious, but DoCoMo used to ask for more... remember their strategic bravado with AT&T Wireless ? Beyond the financial and technological failure, they couldn't even launch the i-mode brand in the US.

Roaming agreements were one thing (SKT eventually preferred TIM, SFR & Vodafone for W-CDMA roaming in Europe), boosting FOMA and DoCoMo-style HSDPA is quite another... and building a Manga-Hallyu pool yet another : "and also this can be a good opportunity for both countries' content providers and solution providers to extend their reach to overseas market". Message to SKT : keep strengthening your ties with the US, China and Europe.

3Greenfield Japan

So Livedoor eventually didn't get a 3G license in Japan (see "Livedoor to incumbents : you've got mail"), and the winners are IPMobile, Softbank BB & eAccess. Actually, I'm not so sure one can talk about "winners"...

• IPMobile are already looking for M-VNOs to fill their TD-CDMA pipes (Roll-out : 3,000 BS by end 2007, 8,500 by end 2012 - QoS : 5.2 Mbps downlink, 858 Kbps uplink - TTM october 2006). M-VNOs can be turned down by DoCoMo (network saturation) and Vodafone KK (coverage), but will they really invest in UMTS TDD instead of IPMobile rivals' W-CDMA / HSDPA or KDDI's CDMA2000 ? The good news for IPWireless is their orders are up. The bad news is they might have to pay for them.
• eAccess branded their greenfield MNO eMobile, which sounds like immobile (fixed, unmovable). The fact is they don't seem in such a hurry : they didn't even complete their business plan before getting the license and their TTM is only March 2007 for a regional launch (National coverage is supposed to be completed by March 2008). eMobile aim at 5M subs after 5 years of operation but even after purchasing AOL Japan last year, eAccess only claim 2.1M subs - besides, dial-up still represents one third of their turnover. TBS (Tokyo Broadcasting Systems, Inc) bring an interesting media / broadband / broadcasting flavor, but they just take 14% of the responsibilities. New partners are welcome but who wants to fight with DoCoMo at home, where even Master Voda struggles for his life ? If no one shows up soon, at least there will be some spectrum for sale.
• Among the three, Softbank looks like the little pig with the house made of stone : if the Yahoo! deals were already good clicks, Japan Telecom brought actual mortar and unlike Livedoor's Takafumi Horie, Masayoshi Son is now part of the Japanese establishment. TTM is not as aggressive as for IPMobile and one can smile at BB Mobile's "mobile triple play" (voice, video and data !) trials with LG Electronics and Nortel ("pre-WiMAX (802.16e)" + HSDPA), but no one should take TV Bank for a new gadget : this new venture will open early 2006 in East-Asia's leading hubs (Beijing, Shanghai, Seoul, Taipei and Tokyo). And beyond Japan, Son opened a promising front in China through Taiwan.

NTT DoCoMo are claiming they fear no one and they could be right. But the chances of disruption remain unnerving enough.

Livedoor to incumbents : you've got mail

What's up in Japan ?
Nothing spectacular as far as incumbents are concerned. As their 3G lead is shrinking, KDDI seek new growth engines through CDMA-GSM roaming ; NTT DoCoMo try to think positive despite gloomy news (i-mode struggling even in Australia) ; and after posting a first non disastrous month in a long time (+5,000 subs in June), Vodafone KK seem eager to play a role in the VNO frenzy to come in Japan.
More exciting : three new 3G licences are to be awarded by the end of this year ; two in the 1.7 GHz band (FDD) and one in the 2.0 GHz band (TDD). The first two should land in the hands of Softbank and e-Access, while IP Mobile Inc are betting on VoIP & TD-CDMA. They have the techno thanks to their partner IPWireless but their hunt for new investors seems sterile and they lack the marketing know-how. Another TDD competitor, Willcom Inc, proves to have both the technological know-how (Kyocera is a shareholder with 30%) and the deep pockets (the highly controversial Carlyle Group is on board too with 60%). KDDI Corporation hold the last 10% : can the regulator allow this cdma2000 player in the W-CDMA arena ?
There's clearly a window of opportunity for a new player with money, ambitions, and the potential to fill the pipes. With or against the other competitors.
Unsurprisingly enough, Livedoor Co. Ltd recently expressed their plans to apply for a 2.0 GHz licence. They seem to have all it takes, even if their President & CEO, Takafumi Horie, scares the hell out of the Japan Inc establishment since he tried to take over Nippon Broadcasting System (Livedoor are suing Fuji TV for a potential illegal poison pill).
So the company previously listed as Livin' On The EDGE and then EDGE eventualy decided to bid for 3G. If not as famous as Softbank, Livedoor managed to build a fairly impressive interactive / marketing empire in Japan and across the globe. Should they make it in Japan, they could very well make it elsewhere, starting with China or the Americas. Among their jewels :

• Livedoor.com : the third portal in Japan and #40 in the World. One should notice a strategic partnership with SKYPE...
• Livedoor Mobile : founded in 2004 in order to boost the creation of mobile sites, this wireless side of the portal should become the base of the future mobile operator.
• MyRice.com : formerly Lycos China and now a leading convergent portal - in the World's top 100 thanks to 5M daily visitors and 35M daily hits. Livedoor can also leverage on their Dalian unit, China Livedoor Software Development. They even have a subsidiary in Thailand (EDGE Siam).
• interactive marketing is clearly a major asset, going glocal through subsidiaries and partnerships with ethnic marketing specialists. mailcreations.com (a subsidiary of Livedoor Inc, their US branch) claim over 200M opt-in e-mails worldwide : 85M in the US (2,5M hispanics), 22M in LatAm, 16M in Europe and 33M in Asia thanks to such initiatives as melma!, a portal devoted to e-mail news : melma! Spain was created after the original Japanese melma!. by Livedoor Interactive / Cyberclick Agent, the Spanish unit located in Barcelona (also a specialist in WAP & i-mode sites). Livedoor also owns EX Marketing and ValueClick Japan.

Among Livedoor's other assets : SeekOver (a US search engine), Cázalo.com (a Spanish search engine based on the ODP), Innovation Lab (the Group's R&D arm), EDGE Telecom, Joboon (formerly Livedoor Career), Turbolinux (Penguin Inside ?), Livedoor Factoring...

Also to be noticed :

• Livedoor Finance : this is Japan, and any player can turn out to be a potential banker.
• Contents : if they failed in taking over NBS, Livedoor are clearly focusing on contents everywhere. In Europe, their Berlin unit (Livedoor Europe) licenses local software mobile contents. In the US, they clinched a licensing deal with WAU Móvil, a mobile content provider working with 20 operators across Latin America ; Livedoor's True Tones will cover 8 countries for a start. Livedoor also holds AlienQuest.com (a game portal), and an intriguing Broadband Pictures Inc... Consistant, but Livedoor arrived late after the Japanese mobile content wars and remains a dwarf in contents. Their strength seems to lie more in their swiftness or their ability to deliver. Well, that's something.

Up to now, Softbank has been quite a disapointment in the wireless arena, but they're much stronger now. Can Livedoor take the helm ? Can both succeed at the same time ? Can a non-Japanese player make a surprise 3G late check-in ? How will 2G incumbents deal with Mobile Number Portability next year and new competitors soon after ? To be continued.