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codes and infrared. Do you see this (points to a small square on the back of his business card)? It has your phone number and other information. You put your phone on it, and it will download the information.
Already, 10 million of our handsets can read two-dimensional bar codes, and 20 million are equipped with infrared.
Videoconferencing--this is part of your job. There is no preference to it; you have to do it whether you like it or not. We think that there is a market there, but that market itself will be small. If it goes to the consumers, I think that means a greater expansion of the market for us. But one issue is that you don't always want to use a TV phone. It is not an issue about technology; this is maybe more of a psychological issue.
What about fixed monthly pricing? What impact is that going to have on the entire cell phone carrier industry?
Basically, I did not want to introduce the fixed-price system because all over the world, all the mobile phone operators are using very limited spectrum. Actually, one of our competitors, Au (the cellular brand of KDDI), started a service so we had to follow them. If we didn't start this service, we would lose the customers. Once we introduce it, we can't retract.
In the past, the business model for the mobile phones is that we wanted the customer to use it a lot and increase our revenue. Coming up with higher-function handsets--that's the way we increased our revenues. If you go to a flat rate, revenue is limited.
Do you think flat-rate pricing will become a problem for more operators overseas?
It depends on the competitive environment. If someone comes along with it, then it's like opening the lid of Pandora's box. If no one opens the box, then maybe you just stick to the old model, but I guess overall, we are going to enter a price competition in that area.
How will 3G affect the handset makers?
I think that in the world of the handsets, we are in a transitional phase. So right now, we don't know who is going to be the winner in 3G. So 1G, Motorola; 2G, Nokia; 3G, we don't know yet. Everybody has a chance.
So I think that in terms of the product line, we need to focus on the high-end to midrange products. For the low-end type of products, you have to produce a lot. Japanese vendors will not have the advantage in that area. The Japanese mobile-phone market is the most advanced in the world, so if they accumulate experience in selling into this very advanced market, that's because the format is standardized globally. I think they have a chance to win.
When it comes to cell phones, North Americans are sort of like cavemen. We're behind everyone else. Why is that?
Well, I think it's the way the Americans think. They think that standardization is evil. The de facto standard is the golden standard for them. In Europe and Japan, the government had a final say in terms of the standardization. It was a mandatory standardization by the government, but in the United States, they don't like to do that kind of thing.
Another point is that in the states, voice mail is very developed. Although there is a time lag, voice mail is a type of mobile communication. In Japan, we virtually have no voice mail.
We have a lot of consulting companies like McKinsey in Japan. It used to be the case that they would introduce a new business model originating from Silicon Valley into Japan. But on the other hand, for the mobile phones, the Japanese branches of McKinsey and Boston Consulting Group get inquiries from around the world. We hear that the operators and the handset makers from around the world come to Japan and go straight to Akihabara (Japan's shopping district for electronics).
How big of an impact do you think Wi-Fi will have on handsets?
Well, we have a plan to incorporate Wi-Fi in our handsets. I think the issue is whether we will be able to get money through this Wi-Fi.
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