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2014 Feb How Changing Mobile Technology Is Changing The Way We Do Business When the first mobile phones came out in sizes such as shoeboxes, people thought it was convenient, but not practical. Car phones came around the same time but weren't quite life changing yet. Then the phones got small enough for pockets and people in all walks of life started using mobile phones in various places. Undoubtedly, mobile phones have changed people lives. In Feb, the C8 CEO Insights luncheon is pleased to welcome Dr. Minoru (Mick) Etoh. Mick is the Managing Director of R&D and strategy in Japan, as well as CEO of Docomo Capital based in Palo Alto, California. He will be sharing with us on how he sees the business and technology landscape is changing due to advances in telecommunications and mobility. How companies are prospering in this next generation, and how some firms are actually missing the boat. This is a wonderful opportunity to hear from one of Japan's leaders from a flagship firm.
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© 2013 NTT DOCOMO, INC. All rights reserved.
Mick Etoh (@mickbean)Feb. 13th, 2014
How Changing Mobile Technology Is Changing The Way We Do
Business
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© 2013 NTT DOCOMO, INC. All rights reserved.
Who am I?• Mick Etoh, SVP, NTT DOCOMO• Role: R&D Strategy • Expertise:
Pattern Recognition & Machine Learning, Signal Processing & Multimedia, Mobile Networks
Fun:
Bike Riding, Fly Fishing, and Wine Tasting2
© 2013 NTT DOCOMO, INC. All rights reserved.
Who is DOCOMO?
• 61 million subscribers in Japan• $45 billion revenue (2013)
Next to China Mobile, Verizon, and AT&T
• “i-mode” innovator (1999)
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© 2013 NTT DOCOMO, INC. All rights reserved.
Revenue Structure (FY2012)
Device
ServiceCloud
Packet
Voice
Smart Phone
Voice: $13 Billion
Data: $19 Billion
Service $5.5 Billion
Feature Phone EraVoice Stage Data Stage
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© 2013 NTT DOCOMO, INC. All rights reserved.
Payments
Vendor1 Vendor2 Vendor3
Operator-Defined Interface
ServicesCustomers
CSP CRMSystem Integration/Operation
Operator-Own-Everything Model
Payments
Sub Vendor1 Sub Vendor2 Sub Vendor3
Proprietary Vendor InterfaceSolution Vendor
ServicesCustomers
CSP CRM
Communication-Service-Provider & Customer-Relation-Management Model
Two Distinct Operation Structures
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© 2013 NTT DOCOMO, INC. All rights reserved.6
© 2013 NTT DOCOMO, INC. All rights reserved.
DOCOMO asWireless Carrier, Network Vendor,
and Service Provider
Experiencing a Big Challenge
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© 2013 NTT DOCOMO, INC. All rights reserved.
Unbundling the corporationby John Hagel III and Marc Singer (1999)
•Customer Relationship Management–Battle for Scope: Identify, attract, and build relationships with customers
•Infra Structure Management–Battle for Scale: Build and manage facilities for high-volume, repetitive operation tasks
•Product Innovation–Battle for talent: conceive of attractive new products and services and commercialize them
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© 2013 NTT DOCOMO, INC. All rights reserved.
What is Innovation?
Joseph Schumpeter‘s “neuer Kombinationen” (Theorie der wirtschaftlichen Entwicklung)
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© 2013 NTT DOCOMO, INC. All rights reserved.
Innovation Example
2.5G Internet connectivity, DOCOMO
1998
Micro Browser, Access Co.
1995
i-mode, DOCOMO
1999Serendipity
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© 2013 NTT DOCOMO, INC. All rights reserved.
Wireless Technologies, the EnablersPersonal StorageSNS/Comm. Tools
3.9G LTE:～75Mbps2010
+Big data synchronization
Smartphone Platformas Application Market
3.5G: ～14Mbps 2006+Flat Rate + Cloud
Mobile Multimedia
3G: 64-384Kbps 2001+CODEC
i-mode
2G:9.6KbpsX3 1998 +micro browser
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© 2013 NTT DOCOMO, INC. All rights reserved.
Very Simplified Formula as Our Old Strategy
Wireless Broadband
Innovation X?
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© 2013 NTT DOCOMO, INC. All rights reserved.
Very Simplified Formula with Smartphone
Wireless Broadband Dumb Pipe
Smart Phone
Innovation X?
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© 2013 NTT DOCOMO, INC. All rights reserved.
Control Points, those who have gone...
Feature Phone
Radio Interface
OS
Middleware
AAA
Applications
OperatorPortal
No Operator’s Control Points
Smart Phone
Radio Interface
OS
Middleware
AAA
Applications
OperatorPortal
LINEFacebooki-tunes
Search Engines
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© 2013 NTT DOCOMO, INC. All rights reserved.
Battle for the place where people visit in the cyber space
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© 2013 NTT DOCOMO, INC. All rights reserved.16
© 2013 NTT DOCOMO, INC. All rights reserved.
Technology Trend 1: Personal Assistant Agent (i.e., very
thin client) with a killer new functionality
Copyright: Microsoft's "Cortana" Personal Assistant App 17
© 2013 NTT DOCOMO, INC. All rights reserved.
Technology Trend 2:Very Fat & Robust Pipe
and Machine Communication
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© 2013 NTT DOCOMO, INC. All rights reserved.
Those who have gone.19
© 2013 NTT DOCOMO, INC. All rights reserved.
LTE-Advanced Network （２０１６？）
Macro Cell Base Station
Small Cell Base Station
Centeraized Radio AccessNetwork
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© 2013 NTT DOCOMO, INC. All rights reserved.
The Next Enablers
Personal StorageSNS/Comm. Tools
3.9G LTE:～75Mbps2010
+Big data synchronization
Smartphone Platformas Application Market
3.5G: ～14Mbps 2006+Flat Rate + Cloud
Mobile Multimedia
3G: 64-384Kbps 2001+CODEC
4G M2M/eSIM
+Large Scale Data Synchronization
Personal Agent new B2B Biz
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© 2013 NTT DOCOMO, INC. All rights reserved.
New Formula as Our Strategy
Machine-ConnectedLarge ScaleWireless Network
Innovation X?
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© 2013 NTT DOCOMO, INC. All rights reserved.
Technology Trend 3:Asset-Oriented (i.e., Core-Biz Focused) and API-Centric
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API as Alternative
© 2013 NTT DOCOMO, INC. All rights reserved.
Application Programing Interface (API)
PA
I
pps
artners
ncome
Adam DuVander,24
© 2013 NTT DOCOMO, INC. All rights reserved.
APIs mean a lot of exposure for web giants
9,000
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2005 2006 2007 2009 2010 2011 2012
API is a key success driver for these businesses Annual growth in number of APIs: 100%
13B Calls / Day (2011.05)
5B Calls / Day (2010.04)
5B Calls / Day (2009.10)
1.4B Calls / Day (2012.05)
1.1B Calls / Day (2011.04)
1B Calls / Day (2012.05)
1B Calls / Day (2012.03)
1B Calls / Day (2010.01)
API Billionaires Club (Programmable Web) API Growth Rate (Programmable Web)
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© 2013 NTT DOCOMO, INC. All rights reserved.
Why API matters
Disadvantages•Limited user reach•Limited brand awareness
Traditional Web business model APIs help you grow your business
Advantages•Unlock distribution channels•Expand user reach through the
V.S.
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© 2013 NTT DOCOMO, INC. All rights reserved.
APIs enable business to create “ Revenue Ecosystem”
Amazon.comMobile Apps
Affiliate Sites
Supplemental Services Internal Developers
+ API
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© 2013 NTT DOCOMO, INC. All rights reserved.
Change of API Offering Models
Consumer Product
End Users
API API API
Cloud API
Developers
End Users
Developers
Consumer oriented API Offering
(e.g.)
(e.g.)
Cloud oriented API Offering
Cloud APIs provide “Utilities” that can be used to build consumer products
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© 2013 NTT DOCOMO, INC. All rights reserved.
Rise of Cloud API Startups
Location Billing AnalyticsCommunication
Authentication
Banking Shipment Print Healthcare Translation
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© 2013 NTT DOCOMO, INC. All rights reserved.
Whey are they focusing on the APIs ?
ConsumerProduct
User Acquisition
User Data
APIs
3rd PartyIntegration
ConsumerProduct
User Acquisition
User Data
APIs
3rd PartyIntegration
1
2
3
4
5
1
2
3
These processes has become harder & harder for the startups
That’s why API startups only focusing on APIs and data acquisition
Traditional B2C Business Process API oriented business process
These processes has been covered by 3rd parties
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© 2013 NTT DOCOMO, INC. All rights reserved.
Yet Another New Formula
Your Asset Innovation X?APIDesign
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© 2013 NTT DOCOMO, INC. All rights reserved.
Let’s see what will happen soon.32
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