digidenki Japan Digital Lifestyle

I talked to some people at Techfirm Japan today and I was amazed to see that Felica, the mobile phone digital wallet system from bitwallet has already reached a penetration rate of nearly 10% this month.

The contact less IC chip which can be used for online payments, e-ticketing, identification and also normal shopping is now embedded in more than 8 million mobile phones in Japan. DoCoMo introduced the first Felica phones in summer 2004. In the last 2 month the installed base grew from 6 million to 8 million users. This is also due to the fact that DoCoMo introduced its new 902 series and KDDI au introduced its first Felica enabled phones. From January 2006 Felica can also be used as replacement for commuter tickets for Japan Rail East customers (integrating the current SUICA card).

One important note: these numbers just reflect the owners of a Felica enabled phone but this does NOT mean that these person are also actually USING it.

Nevertheless I firmly believe that systems like Felica are the biggest innovations in the mobile service field. What we see now is just the tip of the iceberg. There is still enough room for a lot of new ideas on how to use Felica. Not to mention the money that could be made with those ideas.

After a weekend of strolling through Tokyo’s biggest Electronic stores one point became eminent: more and more shops are saying “goodbye” to PDAs. Big chain stores like Biccamera or Sakuraya up until a few month ago had a wide range of PDA offerings from Palm, PocketPC to Zaurus models. Now they are only displaying the Zaurus line of PDAs. All other products have disappeared from the average showroom. A small discussion with shop staffs revealed the following: “We stopped selling those products. The Zaurus is still there because it is more like an ultra small Laptop than a PDA. If consumers need PDA functions they can find these in the mobile phones we sell here at the shop.”

Almost all Japanese phones already offer QVGA displays like normal PDAs as well as address book, calendar and note taking functions. Some can even display and edit office documents.

The assumption of the mobile phones being the PDA killer has been around for long. Now reality proves it right.

It will be interesting to see how smartphones will perform in the Japanese mobile market in the long run. As of now DoCoMo (Motorola using Symbian), Vodafone (Nokia using Symbian) and soon Willcom (Sharp using WM 5.0) offer smartphones. More are expected in 2006. Given the advanced state of normal mobile phones in Japan (they are already rather “smart”) finding the right way to market these “smarter smart phones” will be a big challenge.

While portable gaming devices like Gameboy and PSP are bestsellers in Japan, there is one device that outperforms these platforms: the mobile phone. The reason is not only because more people in Japan own a mobile phone than a Gameboy or PSP.

Talking with some gamers and colleagues I found another reason. And this one lies in the place where people in Japan use to play mobile games: on the train while commuting. Commuting times of one hour or are quite common in the Tokyo region.

This is a perfect time for recreation activities like reading a good book, the newspaper, sleeping, writing mobile mails or playing games. There is just one problem: space. Trains are usually packed during peak times and passengers have to stand while the train is driving.

While holding on to the handle with one hand (to make sure not to stumble over others when the train stops) there is only one hand left for other activities. This already eliminates the possibility to use a Gameboy or a PSP.( Not even to mention the tricky usage of a Gameboy DS in a crowded train while standing.)

Here the mobile phone is the perfect single-hand gaming machine. Games like Street Fighter for example have been modified for the mobile phone to enable special move combinations by just pressing a single button on the phone. The user can even select a right-hand control or left-hand control from the in-game menu depending on if he is holding the phone in his right or left hand.

An interesting example of how the usage of consumer electronic devices is shaped by its environment and also a small inspiration for future train savvy game machines.