In Japan’s mobile landscape, very little is free: Maynard

Canadians are eyeing Japan’s mobile app market with interest, where very little is free and application developers are seeing better returns, James Maynard, president of Wavefront, a commercialization centre in Vancouver, said in an interview. Wavefront is now a year into a business partnership with the Mobile Computing Promotion Consortium (MCPC) of Japan and has hosted a series of meetings this week to build business relationships between Japanese wireless industry officials and 12 Canadian mobile application developers. The 12 companies involved in the meetings are looking for opportunities to expand their footprint into the lucrative Japanese mobile market. “One of the major differences that we see between the Japanese application world and North America’s is that very little is for free,” Maynard said in an interview. “The developers make money on every application download and the revenue splits were designed to encourage developers to build applications.” Maynard said Japanese developers, who work on the popular i-mode platform—a mobile Internet and applications service—make 90 cents on every dollar for their applications. The remainder goes to the mobile operators. In North America, the Apple and Android application stores offer developers 70 cents for every dollar of sales. “We’re quite excited about the Japanese market,” Ryan Holmes, the CEO of Hootsuite, one of the 12 Canadian companies that participated in discussions with Japanese partners, told The Wire Report. “Last month, close to 38 per cent of our traffic was from Japan.” Hootsuite develops a social media dashboard for mobile devices that allows a customer to manage their Twitter, Facebook, LinkedIn, Myspace and Foursquare accounts from one application. “I like the revenue splits they’re doing . To incentivize developers with a generous revenue split is great,” Holmes said. Maynard said North American mobile application developers depend more on advertising revenues while Japanese developers rely on the sales value of applications. “We believe and hope that advertising revenue streams will replace commercial value, and that has not been proven yet,” Maynard said. “In Japan, they see commercial value first, incremental value from advertising.” Although Canadian companies are finding new opportunities in Japan, the inverse is not yet proven true. “We don’t see very many due to the fact that the market is more mature ,” Hajime Muto, chair of the MCPC’s promotion and marketing committee, told The Wire Report through a translator. “In Japan we use cellphones more like smart phones,” Muto said, adding that Japanese consumers use basic cellphones to watch video. Holmes said 90 per cent of cellphones in Japan are capable of receiving over-the-air television signals and can allow users to control their personal video recorders at home. Maynard said the Japanese wireless market is about 10 years ahead of Canada’s. Japan built its first 3G wireless market around 2000 while the Bell Canada and Telus HSPA+ network went online in November 2009. Wavefront said Japan is one of the world’s top mobile markets with 112.7 million cellular subscribers and total industry revenues of $71.5 billion annually. Maynard said the HSPA network in Japan is significantly faster than Canada’s and closer to what Canadians will see in North American with the arrival of fourth-generation LTE networks. But the technology gap between both countries is closing, Maynard said. “In some of my trips to Japan, I’ve met with some content companies and I think there’s some interest to start exploring business opportunities here, just because there’s more equality happening in terms of the technical infrastructure between the two ,” he said. Last November, Wavefront organized a similar series of meetings between three Canadian developers and Japanese officials. The meetings resulted in two contracts overseas while the third company is currently in negotiations for a deal in Japan. Maynard said it’s difficult for small Canadian companies to navigate through the Japanese market without outside guidance and the opportunities to build business relationships more easily. “Wireless is a global business and many business opportunities exist outside of Canada’s borders,” Maynard said. jmigneault@thewirereport.ca

In Japan’s mobile landscape, very little is free: Maynard

Broadcast | June 23, 2010

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