Japanese mobile market is far ahead of the rest of world, so we always look at it for the guidance as it may imply the trend of our local market. But the question we’ve never asked but might be more interesting to know about is what is the latest trends in Japanese mobile market.

At SXSW Technology Summit, I caught up with my friend Serkan Toto who writes for TechCrunch covering news from Japanese local web. We had a nice conversation about Japanese mobile market and its local trends.

The Japanese companies presented in SXSW

As the expert of Japanese web, Serkan’s invited to speak at SXSW and also moderate the Japan panel. So I threw my first question, which companies were presenting Japan in SXSW as they might be the one of hottest. Serkan gave me a quick walk-through,

  • Dentsu Inc, the biggest advertising agency in Japan,  the producer of the super cool Augmented Reality (AR) app, iButterfly which is released a year ago.
  • Tonchidot, the producer of DOMO, the so-called ‘pre-social’ mobile application which allows users to check-in the same interests, instead of location. Tonchdot is also creator of the AR platform, SekaiCamera which allows third parties to develop AR games on it.
  • Geisha, one of the hottest mobile social game makers in Japan, providing social games to GREE, DeNA’s Mobage-town and Mixi. Geisha is also the creator of the popular Augmented Reality figure, ARis (youtube video).
  • Ubiquitous Entertainment Inc , the game development companies for web, iPhone and Android phone.
  • Kayac, creator of Nakamap, a free application for iPhone and Android phones that allows real-time location sharing and group chat.

The Big Change, Feature Phone market is thrinking

This is probably the most interesting point Serkan shared with me. He commented, Feature phone market is definitely shrinking in Japan. Right now, Japan has ~30 Android phone models and iPhone is also in very sale, which causes more and more feature phone-based service, such as GREE which launched their own iPhone and Android applications at end of last year.  People is going to pick up the new generation of smart phones as the next choice.

The Trends in Japanese mobile market

I asked Serkan, is Location-based service (LBS) hot in Japan? Serkan said Not. LBS is in the market for years as the feature phones are usually GPS-enabled. As the shrinking of Feature Phone market,  Serkan thinks Japanese mobile market is growing fast in three sectors,

  1. Augmented Reality – AR is not really new in Japan, it’s the technology even available for the Feature Phone. However, the popularity of smart phones (Android phone and iPhone) speed up the development and commercialization of AR products. iButterFly and SekaiCamera are one of the best examples, said Serkan.
  2. Mobile Gaming market – The traditional feature phone focus mobile game companies are now changing their business strategy and preparing for opportunities from smart phones. Serkan gave me an example, CoroPura which is similar to those farming games on Facebook or Mixi, but as it’s on mobile (feature phone and Android phones) the game is based on the real location of the players.
  3. Mobile e-Commerce – again the traditional mobile e-commerce market is moving fast to the smart phone space. As a sign of this trend, Serkan said, the e-commerce giant Rakuten has its iPhone app, Rakuten Ichiba which allows users to browse through the 70 million items.

Further Thoughts, Is the Door to Japanese Mobile Market Open?

Japanese mobile market is quite advanced, but its Feature Phones actually isolated its local market from the rest of world. When I playing with those Japanese mobile apps on iPhone mentioned above, it’s interesting to find out that a few of them, such as Rakuten Ichiba, iButterly are only available on Japanese App Store, but more than half of them actually can be downloaded on non-Japanese App stores (and even come with English interface). As Android phones and iPhone are hot in all over the world, so does that mean, for the first time, Japanese mobile market is on the same line with global mobile market?

Will Japanese mobile technology companies move abroad? Or is the door to access Japanese market open to global smart phone developers/development companies?