Japanese office worker Satoshi Tada pays for shopping, wins free food and gets store discounts all by waving his cell phone.
"I use it pretty much every day," the 25-year-old said. "You can charge money on it right there if needed, and you don't have to run around trying to find an ATM. You can even get points because it's linked to credit cards."
The world's top firms such as Visa Inc and Nokia are still mostly testing phone use for payments, but in Japan, more than 50 million, or about half of all cell phone users, already carry phones capable of serving as wallets.
Japan has pioneered not just the technology but also the business models that will pave the way for wallet phones to become a standard payment method in the future. Some 700 million people worldwide are expected to own such phones by 2013.
"You can't deny that having such applications on a phone is convenient, and that will likely be the way that mobile phones are going worldwide," said JPMorgan Securities analyst Hironobu Sawake in Tokyo.
"People always carry cell phones on them, and they would find it useful to have a financial function there."
Success in Japan and in trials abroad have shown that the technology is ready for cell phones to replace credit cards, cash as well as serve as transportation and movie tickets and electronic keys for homes and offices.
But there are other hurdles; from breaking the psychological barrier for consumers skeptical about using phones as credit cards, to working out new business models as the lines blur between banks, financial institutions and cell phone companies.
Japan is leading the way in this regard.
KDDI, for example, is a Japanese telecom operator that has recently set up a bank along with Mitsubishi UFJ Financial Group. NTT DoCoMo, Japan's biggest wireless carrier, offers credit cards and lending services as part of a tie up with Sumitomo Mitsui Financial Group, Japan's third-largest bank.
Outside Japan, telecom industry and financial players are still in the midst of working out how the wallet phone payment business would operate, who would get a cut and when.
"Traditional financial industry met telcos by going mobile. Now telecom operators want to play a part in that chain. These talks are well under way," said Gerhard Romen, Director for Strategic Alliances & Partnering at Nokia.
The world's biggest payment card company, Mastercard, said last month it was in talks over commercial launches of phone wallets with several banks, and during the next two years it expects to see substantial activity from retail-focused banks.
"Now banks say: I have no doubt in the technology. We need to solve the business model between mobile and payments industries. It's not a trivial task," said James Anderson, a Vice President at Mastercard's mobile business.
"There is a very strong consumer pull for this service," Anderson added.
COUPONS
Tada, the Tokyo office worker, rarely pulls out his leather wallet these days as his cell phone does the job instead.
"For shopping, I use it everywhere I can ... and I also use coupons such as Gourmet Navigator Touch wherever possible," Tada said, citing services at some restaurants that offer coupons and free gifts when customers wave their phones at reader terminals.
NTT DoCoMo began the so-called "wallet phone" service in 2004 and rivals KDDI Corp and Softbank Corp have followed suit. Overseas, Nokia also has such phones on the market.
Nevertheless, despite Japan's relative success with payment phones, still only one-third of wallet phone holders use their cells for purchases.
Consumers in their 20s and 30s are the main users of wallet phone services. Research shows that once they start using, they tend to use frequently and repeatedly, making it a useful tool for companies to track their customers and shopping habits.
"For young people the phone is more important than the card when they leave home," said Nokia's Romen.
McDonald's Japan and 7-Eleven convenience stores have been testing mobile discount coupons, and FeliCa Networks, a joint venture of Sony and DoCoMo, have launched a mobile platform for retailers to offer such services.
"With many cell phones around and most of them being wallet phones, we cannot ignore them as marketing tools," McDonald's Japan spokesman Kazuyuki Hagiwara said. McDonald's plans to widen its mobile discount coupon offering nationwide next year.
EXTRA CHIP
The world's top cell phone maker Nokia has started selling wallet phones, though growth is hampered by costs stemming from an extra chip needed in phones for data security. As a result, Nokia's near field communications (NFC) version of devices costs far more than regular phones.
Near field communications (NFC) enables contactless data transmission at high speed and enables many functions at once such as various electronic money services, keys and coupons.
In contrast to Nokia, Japanese makers install Sony Corp's FeliCa chips in new mobile phones by default, and prices are competitive with other cell phones.
Globally, research firm Juniper Research says there will be 700 million NFC-capable phones by 2013, from some 50 million in Japan now, offering major growth for the phone payment industry and the companies that provide the hardware and software.
Credit card network Visa is developing an application to allow in-store contactless payments by cell phone for Google Inc's Android operating system, and UK mobile operator O2 is also testing wallet phones.
Security concerns are high among potential users but DoCoMo says a remote-lock system will protect it from being used by other people in case of emergencies.
One of the remaining hurdles to attract more wallet phone users is to expand the system network.
"It would be so useful if we can use it everywhere. For now we don't know where we can use it and we have to carry both a phone and a wallet," UBS Securities analyst Makio Inui said. "If we can spend a day with just with a phone, that would be big."
Tuesday, November 18, 2008
Dell quells rumors about music player
Dell Inc, struggling to recharge its lineup of consumer product offerings, indicated Monday that a digital music player is not in the computer maker's near-term plans despite speculation that such a product is in the works.
Although Dell declined to comment specifically, the company said in a blog posting that its digital entertainment strategy "has never been about a music player."
The Wall Street Journal, citing sources, reported earlier Monday that Dell has decided to postpone the launch of a music player.
"As we said a few months ago, our strategy focuses on content offerings and delivery platforms that mix Zing software, remote access and pre-configured media bundles across all of our devices, including licensing agreements with entertainment distributors," the blog posting said.
In 2007 Dell acquired Zing, whose software allows handheld devices to receive streaming audio and video feeds wirelessly. The acquisition spurred speculation that the company was set to have another go at the music player market, which it abandoned in 2006 after failing to find any success against Apple Inc and its iPod family.
There were other hints that Dell was interested in relaunching a music player. The company has been increasing its presence at rock festivals, seeking to promote its brand among music-lovers and the consumer public in general.
Dell and much of the personal computer industry is confronting the prospect of a bleak holiday season. Last month, the company said it was seeing soft demand for PCs as the global economy slows.
Dell is the world's second largest computer company by units shipped, although third-ranked Acer Inc is gaining ground fast on the strength of its netbook offerings. which Dell has been slower to embrace.
The Round Rock, Texas-based company has been retooling its operations to confront slower demand. In August Dell said it had slashed 8,500 jobs out of a planned 8,900 headcount reduction.
Shares of Dell closed down 69 cents, or 5.5 percent, at $11.86 on Nasdaq.
Although Dell declined to comment specifically, the company said in a blog posting that its digital entertainment strategy "has never been about a music player."
The Wall Street Journal, citing sources, reported earlier Monday that Dell has decided to postpone the launch of a music player.
"As we said a few months ago, our strategy focuses on content offerings and delivery platforms that mix Zing software, remote access and pre-configured media bundles across all of our devices, including licensing agreements with entertainment distributors," the blog posting said.
In 2007 Dell acquired Zing, whose software allows handheld devices to receive streaming audio and video feeds wirelessly. The acquisition spurred speculation that the company was set to have another go at the music player market, which it abandoned in 2006 after failing to find any success against Apple Inc and its iPod family.
There were other hints that Dell was interested in relaunching a music player. The company has been increasing its presence at rock festivals, seeking to promote its brand among music-lovers and the consumer public in general.
Dell and much of the personal computer industry is confronting the prospect of a bleak holiday season. Last month, the company said it was seeing soft demand for PCs as the global economy slows.
Dell is the world's second largest computer company by units shipped, although third-ranked Acer Inc is gaining ground fast on the strength of its netbook offerings. which Dell has been slower to embrace.
The Round Rock, Texas-based company has been retooling its operations to confront slower demand. In August Dell said it had slashed 8,500 jobs out of a planned 8,900 headcount reduction.
Shares of Dell closed down 69 cents, or 5.5 percent, at $11.86 on Nasdaq.
Microsoft CEO pours cold water on Yahoo interest
Software giant Microsoft Corp dismissed speculation it might still be interested in a takeover of Internet firm Yahoo Inc.
"We made an offer, we made another offer ... We moved on," Microsoft Chief Executive Steve Ballmer told a business luncheon in Sydney on Friday when asked for the firm's plans after a partnership between Yahoo and Google Inc fell through this week.
"We tried at one point to do a partnership around search ... and that didn't work either, and we moved on and they moved on. We are not interested in going back and re-looking at an acquisition. I don't know why they would be either, frankly," Ballmer said.
He added that he thought there were still opportunities for some kind of partnership around search.
Ballmer's comments came two days after Yahoo's shares surged on a rumour posted on a blog that said Yahoo and Microsoft were in advanced talks to sell Yahoo for between $17 and $19 a share. The blog also reported that Yahoo's chief executive, Jerry Yang, would step down.
Yahoo officials later said the report was untrue.
Microsoft abandoned an unsolicited $47.5 billion bid for Yahoo in May. The software company had been looking to fill a hole in its repertoire by acquiring an Internet search engine as it battles with market leader Google.
In June, Google and Yahoo, Nos. 1 and 2 in the Internet search market respectively, announced their planned partnership, which Yahoo had struck as a way of fending off Microsoft.
The two delayed implementation to allow the Justice Department to review it but Google later said it pulled out of the deal rather than face a protracted legal fight after regulators had concerns.
Yang told the Web 2.0 Summit in San Francisco on Wednesday that he believed a deal between Microsoft and Yahoo was still the best option for Microsoft.
Yahoo shares ended Thursday at $13.96, far below the $31 a share Microsoft originally offered, and Yahoo has come under severe criticism from investors for turning down the offer.
Microsoft posted stronger-than-expected quarterly results last month and cut its outlook by less than investors had feared amid the economic slump.
Pity the Bluetooth headset this holiday season
So what's the least desired electronic gadget this holiday season?
Well, flat-screen TVs and mobile phones are still in, but cash-strapped shoppers are likely to shun anything closely linked to entertainment in the home or car because such electronics are seen as dispensable in an economic crisis.
That includes audio speakers and desktop computers and even GPS navigation systems made by companies such as TomTom NV and Garmin Ltd.
A popular item as recently as last year, GPS may fall by the wayside, since they can be pricey and not viewed as essential, according to Stephen Baker, an analyst for research firm NPD.
"GPS may have some demand issues," he said. "If you are looking at necessity versus discretionary, that is a category that is not very well-penetrated, which is in its favor. But the negative part is people saying: 'Do I really need this'?
A recent national survey says the dubious distinction of least desirable holiday gift belongs to Bluetooth Headsets, those thumb-sized devices beloved by some for their convenience and ridiculed by others as odd looking.
The online survey conducted last month on behalf of auction site eBay Inc also found that only 5 percent of those who wanted personal electronics desired a Blu-ray disc player. Even so-called "retro video game" systems and one game in particular -- "Dance Dance Revolution Hottest Party II" -- got the thumbs-down.
Digital picture frames, the sleek devices that can scroll dozens of pictures and even update remotely via an Internet link, may feel the pinch if shoppers' budgets force them to decide on one electronic product or another, Baker says.
"A lot of people think of frames as a neat thing to do, but may end up saying: 'I probably really need a new digital camera.'"
STORES OFFERS CLUES OF LOSERS
Electronics stores are already gearing up for the holiday rush, hoping consumers snap up deeply discounted devices. But there are clues to how some stores -- who give hot items premium placing and downplay the laggards -- feel about certain products.
On a recent visit to a suburban New York Circuit City, this reporter crossed through the threshold and saw four products placed prominently: flat TVs on the left, digital audio players on the right and straight ahead, mobile phones and -- oddly enough -- high-end Dyson vacuum cleaners.
Scanning the huge big-box store, it was hard to locate home audio speakers, car radios and cordless phones, which were either hundreds of feet away from the front door, beyond eyeshot, or on shelves below eye-level.
At a Best Buy store on Manhattan's Fifth Avenue, the rear of the lower level, far from the bustle, is where you will find Logitech International's $149 Harmony programmable remote controls, not far from Bose's $329 bookshelf speakers and Sony Corp's $399 770-watt home theater receiver and a host of computer printers.
Tim Herbert, an analyst for the Consumer Electronics Association, suggests the rapidly changing -- and cost-saving -- nature of consumers' use of certain products is also affecting shopping habits.
"For example, in the category of cordless phones and answering machines, in years past that was always a very hot category, but more and more people are moving toward a cell phone-only model of communication," he said. "Or the answering machine capabilities are built into a service that you get with your carrier or phone service."
But that will not stop shoppers from spending freely on a great deal. For example, Wal-Mart says its holiday sales include a basic Compaq laptop for $298 and a Sanyo 46-inch LCD high-definition television for $898.
"Consumers are going to be more mindful of their budgets," said Herbert. "It's a tough question to say morally whether it is right to spend on the holidays this year when they may be feeling economic strain, but historically, its somewhat in our nature."
Well, flat-screen TVs and mobile phones are still in, but cash-strapped shoppers are likely to shun anything closely linked to entertainment in the home or car because such electronics are seen as dispensable in an economic crisis.
That includes audio speakers and desktop computers and even GPS navigation systems made by companies such as TomTom NV and Garmin Ltd.
A popular item as recently as last year, GPS may fall by the wayside, since they can be pricey and not viewed as essential, according to Stephen Baker, an analyst for research firm NPD.
"GPS may have some demand issues," he said. "If you are looking at necessity versus discretionary, that is a category that is not very well-penetrated, which is in its favor. But the negative part is people saying: 'Do I really need this'?
A recent national survey says the dubious distinction of least desirable holiday gift belongs to Bluetooth Headsets, those thumb-sized devices beloved by some for their convenience and ridiculed by others as odd looking.
The online survey conducted last month on behalf of auction site eBay Inc also found that only 5 percent of those who wanted personal electronics desired a Blu-ray disc player. Even so-called "retro video game" systems and one game in particular -- "Dance Dance Revolution Hottest Party II" -- got the thumbs-down.
Digital picture frames, the sleek devices that can scroll dozens of pictures and even update remotely via an Internet link, may feel the pinch if shoppers' budgets force them to decide on one electronic product or another, Baker says.
"A lot of people think of frames as a neat thing to do, but may end up saying: 'I probably really need a new digital camera.'"
STORES OFFERS CLUES OF LOSERS
Electronics stores are already gearing up for the holiday rush, hoping consumers snap up deeply discounted devices. But there are clues to how some stores -- who give hot items premium placing and downplay the laggards -- feel about certain products.
On a recent visit to a suburban New York Circuit City, this reporter crossed through the threshold and saw four products placed prominently: flat TVs on the left, digital audio players on the right and straight ahead, mobile phones and -- oddly enough -- high-end Dyson vacuum cleaners.
Scanning the huge big-box store, it was hard to locate home audio speakers, car radios and cordless phones, which were either hundreds of feet away from the front door, beyond eyeshot, or on shelves below eye-level.
At a Best Buy store on Manhattan's Fifth Avenue, the rear of the lower level, far from the bustle, is where you will find Logitech International's $149 Harmony programmable remote controls, not far from Bose's $329 bookshelf speakers and Sony Corp's $399 770-watt home theater receiver and a host of computer printers.
Tim Herbert, an analyst for the Consumer Electronics Association, suggests the rapidly changing -- and cost-saving -- nature of consumers' use of certain products is also affecting shopping habits.
"For example, in the category of cordless phones and answering machines, in years past that was always a very hot category, but more and more people are moving toward a cell phone-only model of communication," he said. "Or the answering machine capabilities are built into a service that you get with your carrier or phone service."
But that will not stop shoppers from spending freely on a great deal. For example, Wal-Mart says its holiday sales include a basic Compaq laptop for $298 and a Sanyo 46-inch LCD high-definition television for $898.
"Consumers are going to be more mindful of their budgets," said Herbert. "It's a tough question to say morally whether it is right to spend on the holidays this year when they may be feeling economic strain, but historically, its somewhat in our nature."
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