Mobile Phone Market Changed by Remarkable Success of Sha-Mail

By Hajime Yamada (GLOCOM)

At the end of January 2002, I wrote a report in this series entitled "Recent Trends in Technology-Driven Companies -Part 6-; Market Trend of the Third Generation Mobile Communication Services," in which I mentioned Sha-mail. Recently, the mobile phone market has been changing due to Sha-mail's remarkable success.

Sha-mail is a service that sends photo images taken by a built-in digital camera of mobile phone terminal to another terminal. This service is provided by J-PHONE Co., Ltd., one of the subsidiary companies of Vodafone Group, a British mobile communications enterprise.

Sha-mail service started in November 2000. It was the first image transmission service in the mobile communications industry. At the beginning of the service, the terminal equipment was provided only by Sharp Corporation. Later, Sanyo Electric Co., Ltd. in April 2001 and Toshiba Corporation and Mitsubishi Electric Corporation in autumn of the same year also started providing terminal handsets with built-in cameras. Since then the variety of terminal devices has grown. At present, users can choose devices from 11 models released by five makers.

In May 2001, when the statistics was first published, there were 760,400 Sha-mail subscribers. Since then the number increased favorably and exceeded four million on March 14th, 2002.

To utilize Sha-mail service, users need to subscribe to J-sky, an Internet service provisioning operated by J-PHONE. Observation of monthly net increase of J-sky and Sha-mail subscribers leads to an interesting fact.

The table above reveals that, except for July 2001, the net increase of Sha-mail users exceeds that of J-sky subscribers. It proves that many new subscribers joined J-PHONE to utilize the Sha-mail service. It also indicates that existing J-sky subscribers are trading their J-sky terminal equipment without Sha-mail for equipment with the Sha-mail function.

J-PHONE has long been the third-largest operator in the mobile phone industry after "au" of KDDI Corporation. However, in the two years starting March 2000, the total increase of "au" subscribers was about 2.5 million, while more than four million have joined J-PHONE. The table below provides the statistics. J-PHONE is certainly coming close to "au." Meanwhile, KDDI provides mobile phone services through two brands; "au" and "tu-ka." The numbers of users are 12,214,200 with "au" and 3,891,400 with "tu-ka," respectively, as of the end of March 2002. Therefore, if compared by brand, J-PHONE with 12,232,000 subscribers has already overtaken "au" and comes second in the industry.

In October 2001, NTT DoCoMo, Inc. inaugurated service of the third generation (3G) mobile communication system. The number of subscribers is shown in the table below.

As the table shows, 3G mobile communications service has acquired only a limited number of users. Normally, 3G services have a more rapid data transmission speed and are more suitable for image data transmission activities such as Sha-mail. However, users have not gone with 3G. Their choice has been easy and simple--Sha-mail--even though it takes a little longer to receive images.

In October 2001, 3G service areas were limited to within and around Tokyo. At the end of January 2002, however, the service areas have expanded to Nagoya and Osaka and their surrounding districts, and since April 1st 2002 3G services have become available in all the major cities in Japan. It is worth watching how much this expansion of 3G service areas becomes accepted by users and how many more users come to enjoy services similar to Sha-mail with 3G terminals in the future.