Mobile Felica will have to cross devices, platforms and providers if it is to be successful. The major revenues will be from licences, transaction fees and the IP that is generated by the intelligence provided in the pattern of purchases that could be sold. Plus the added edge that the tech is cheaper to install in DoCOMo devices means there is an edge. The use for public transport and similar low value payment systems is attractive.Plus the reuction in churn will help raise longer term profit as customers will not want to move providers if there is a link to payment systems, however if they do then there still is potential profit in the financial transations that Felica generaters. It gives DoCoMo an alternative revenue stream to that of mobile data services and a platform for the provision of added value services to mobile users.
The focus on the handset is reduced although this will remain a fashion focused item, it means there is a range of devices that will provide the same functionality.The phone is moving towards the ‘Lifestyle Infrastructure’ product that is an essential personal tool. It can provide added value propositions such as targeted marketing, discount offers, focused marketing for a range of retailers. The service has the intelligence to directly address the individual, eg sale of last minute social events, supermarket offers, etc. The issue about security is a concern but this can be covered by adopting blocking tech for customers and keeping the cash holding limits low.The near banking functions are also an issue re regulations and relationship with banks and related credit card companies.
Merging of IC (contact and contactless) technologies will open the market, the adoption by the govt of the tech in ID and related systems, drivers licences, etc. this further extends the range of applications. i-mode is an ‘all ways’ on technology that doesn't require the customer to log in each time they wish to use the data transfer facitlities. This is crucial for the development of Felica as it requires instant and quick access to the network and the ‘boxes’ of cash to enable the transaction.
It could be less secure as alternatives required a PIN or similar personal security entrance keys. The exposure to fraud is one issue that both had an exposure to. I-mode was specific to Japan and hadn’t exported well outside of Japan. This produced incompatability issues and integration of technological developments. FeliCa was more of an open tech and able to accommodate rival systems and therefore had a greater potential to be used in a wider range of applications.
I-mode was a mature technology and with the advent of 3G this provided a threat to the extension of its life cycle.To keep Felica exclusive may have gained short term profit advantage but it could not give the long term flexibility of developing a range of applications and added value propositions that would enhance the profits and competitiveness of DoCoMo. It was risky in that others could exploit the IP and crowd DoCoMo out. To be community driven rather than ‘first in’.. is a strategy that can reduce risks but shaves short term profit.
However to be ‘first in’ would require massive investment and constant legal awareness as competitors try to imitate and emulate the tech and business model.By sharing this reduces the risks, the investment and produces cooperative developments. DoCoMo protected its short term interests through ‘no licence’ fee, IP ownership and brand focus. The technology should have a low price entry level, to enable a broader adoption and development. A licence fee that generates revenue but is not a significant cost to the adopter will enable more operators to adopt rather than develop their own alternative tech.
this will give DoCoMo the advantage of ‘respect’ as well as leadership. It can generate a broader application base and has the advantage of control over the tech develpments.Services are mass based, high volume, low value transactions. Customers and retailers should not be too conscious of the cost of using the services and therefore use the services more than before, eg the use of phone calling increased with the use of FeliCa services .
customers are not conscious of the cost of the use of the service. As the service is for low value but frequent transactions. DoCoMo is at an interesting point.. its is a financial services company, the mobile network merely a means to enable the ease of transactions.Is it a marketing company, offering a facility to target prospective customers, to analyse and develop smarter marketing compaigns.
eMoney was a technological solution to a need, the tech provided by DoCoMo but it used it to reduce customers switching and to extend the life cycle. The businesses of providing the tech platform and the financial transactions, is different than providing financial services and management, such as credit cards. eMoney is not financial services, it's a payment system and is compatible with the development of the tech and mobile services. DoCoMo should invest in eMoney.
Credit cards are not then same business, it's a very different business and doesn't fit with DoCoMo. It hasn't the ability, intellectual and cultural resources to be a financial institution and provide credit. Credit card companies make profit on credit not transactions. DoCoMo is not in a position to manage the credit market.
It is a tech company. The financial transactions create an opportunity for DoCoMo to expand the data transaction and mobile market. It should focus on eMoney to lock in mobile customers. It should cooperate with Credit card companies and not compete with them.
