The Role of Mobile Connectivity in Consumer Electronics-02 ted matsumoto
Mobile Services go beyond handsets February 17, 2011 Ted Matsumoto Senior Executive Vice President 2 2 SOFTBANK MOBILE Corp.
SOFTBANK CORP. ・Holding Company with 116 subsidiaries and 22,000 employees. ・Established in Sept. 1981 by Masayoshi Son as a software wholesaler. Established ・Grew together with the growth of internet. ・Come to the judgment that it is indispensable to own communication carrier j g p business to take a leadership in the integrated information service market. Online Online games Online securities No.1Distribution/Distrib tion/ video Portal No.1 No.1Service No.1 Search AuctionDomain No.1 No 1 No.1 N 1(In Japan) Software distribution No.1 Mobile Communications ADSL Fixed-lineInfrastructure No.1 Presently, No.3 close to No.1Domain(In Japan) 3
Ecosystem of Mobile Business in Japan y p Servers-Clients System Design Service Content Provider Handset Vendors Planning Planning Service content charge Handset price Network Operator Sales support Communication charge Retailers (Monthly) (Shops, mega stores, etc) PR/Ads Installment payment for a handset （Monthly） Provide handsets Various service charges activation, customer service (Monthly) Initial I iti l payment t for a handset, etc. The Users 4
SoftBank is a “Total Value” Provider・ Users are interested in only one thing; “What terminal shall I buy, how much money should I pay every month, and then what can I do?”・ SSome one should provide a T t l V l P k h ld id Total Value Package with O ith One-stop t shopping/One-stop Billing, taking all the accountability for the entire package package. Service Terminal (Cloud) The Trinity Network 5
Mobile Business dramatically changedthe financial structure of SoftBank(bn JPY) EBITDA by Segment (Q1-Q3:Apr.-Dec.) y g ( p ) 800 700.5 700 601.2 600 508.4 483.7 483 7 500 Mobile Communications 471.6 (SOFTBANK MOBILE Corp.) 400 382.4 391.9 303.7 Fixed-line Telecommunications 304.8 300 (SOFTBANK TELECOM Corp.) 233.4 Broadband Infrastructure B db d I f t t 200 47.3 58.2 45.5 (SOFTBANK BB Corp.) 94.9 34.8 47.1 31.8 54.1 51.0 52.0 100 7.2 72 39.8 39 8 Internet Culture 30.7 118.9 91.8 100.9 108.2 (Yahoo Japan and others) 58.0 76.7 0 -100 Q1-3/05 Q1-3/06 Q1-3/07 Q1-3/08 Q1-3/09 Q1-3/10 6
Significant increase of subscribersafter SoftBank took over (k) 24,64025,000 ▼ Enhancement of - Network - Handsets line-up - Data Services - Marketing and Distribution20,000 made it happen 15,222 ▼15,00015 00010,000 ▲ ▲ Apr. 2006 January 2011 7
Competitive landscape has also been changed 3 Major Mobile Operators (k) Net Adds 1,000 900 SOFTBANK 800 Net adds share 700 62%* (for Oct. – Dec.) ( ) 600 500 400 300 NTT DOCOMO KDDI 200 100 0 FY05/3Q FY06/3Q FY07/3Q FY08/3Q FY09/3Q FY10/3Q 8 * Calculated by SOFTBANK based on Telecommunications Carriers Association data.
Data ARPU is 54% of the total ARPU Cash income per subscription sustains steadily. Data ARPU reached US$28 (Unit (Japanese Yen))7,000 6,040 5,960 5,8806,000 5,780 5,750 200 200 1,000 1,680 1,480 1,310 payment5,000 for Handsets 230 280 260 2704,0004 000 4,230 Voice ARPU 1,980 2,150 (+ monthly3,000 3,040 2,300 fixed fee)2,0001,000 2,060 2,330 Data ARPU 1,790 1,330 1,490 (without SMS) 0 06/Q1 Q2 Q3 Q4 07/Q1 Q2 Q3 Q4 08/Q1 Q2 Q3 Q4 09/Q1 Q2 Q3 Q4 10/Q1 Q2 Q3 [FY] 9 Note: cash income per subscription = ARPU + handset installment payment + backup service package, etc.
Now, all the Network is 3G Number of Cumulative Subscribers (K) At the time of acquisition (end of Apr 2006)25,000 24,640 24 640 ▼ 3G subscribers: 3.27m 3G ratio: 21.5%20,000 15,222 5, ▼15,000 2G G10,000 on 1.5GHz End of January 2011 3G subscribers: 24.64m 3G ratio : 100% 5,000 3G on 2GHz HSPA ratio: approx.70% (as of June 10) 0 2005 3月 9月 3月 9月 3月 92006 月 9月 3月 9月 3月 9月 3月 2010 2004 月3 2007 2008 2009 * HSPA base stations cover approx.90% of the population 10
Future Network should be the combinationof multiple technologies ・ Future data traffic would be very big (50-100 times), unpredictable and download-heavy. - Mobile Network cannot solely support all of such traffic. ・ Diff Different network should j i tl support th t t l t ffi burden, depending on t t k h ld jointly t the total traffic b d d di the places and the types of services. - It should be seamlessly integrated on one handsets. 3G → 4G (More Spectrum / Smaller Cell) ・ As only the mobile network (3G/4G) can assure “anytime and anywhere ( q (ubiquitous)” communication link, its value will never be diminished. ) , - Mobile operators should charge the users, not based on the number of 3G/4G packets, but based on the “total value” they provide. 11
WiFi and Mobile complement each other・ M bil network technologies were originally d Mobile k h l i i i ll developed with an aim to l d ih i seamlessly cover vast areas and enable uninterrupted communications in all kinds of environment environment.・ WiFi was developed with an aim to enable a high-speed wireless access in the wired system’s last several tens of meters. y・ They mutually complement, rather than compete against each other. - “Islands of WiFi in Mobile Ocean” is the image. - We would be happy if 75-85% of traffic is absorbed by WiFi. ppy y 12
Broadcast + Cache is the new way of Traffic offloadTraffic ・ Neck part of dinosaur handled by Broadcast + Cache” Cache - Scheduled delivery of all kinds of News, Market Info, Sports updates, Blogs, Gossips, etc (subscription base) - Download of Music, Video clips, Books, Games, etc in the midnight (User shall buy only the key via normal 2-way communication channel) - User will take any of the above as if it were an On Demand Service On-Demand ・ Body and Long Tail part handled by On-Demand service. ・ Various Mobile Broadcast technologies and/or “TD LTE + eMBMS” would satisfy thi need. “TD-LTE MBMS” ld ti f this d Various Content 13
Internet Services will become seamless Present Future • The users access various contents • All the services are equally provided services from their PCs to various user equipments • Most of audio/video services are provided on consumer electronics Mobile PC Consumer Electronics 14
Access is Shifting from PC to Mobile (bn PV) Page Views of mixi, mixi More than 85% 35 the biggest SNS in Japan access is from Mobile 30 Mobile Access via mobile increases rapidly PC due to provision of 25 game applications 20 15 10 5 0 Mar Sep Mar Sep Mar Sep Mar Sep Mar Sep Jan FY06 FY07 FY08 FY09 FY10 Source: IR material publicized by mixi, inc. 15
Tablet is something between PC and Smart Phone・ The Tablet is the “Advanced Net PC” without hard keyboard as well as the Advanced PC keyboard, large screen version of “Advanced Smart Phone”.・ Many users may first think they will use the Tablet only in the fixed environment, and, accordingly, may judge WiFi only model might be good enough.・ But, once it becomes a part of their daily life, they start understanding that they cannot miss it anytime and anywhere, and, thus, 3G is needed. Mobile Handsets PCs & Tablets Sales Forecast in Japan Sales Forecast in Japan (mil) (mil) 15 40 30 Desktop Feature phones 10 20 Laptop 5 10 Notebook Tablet Smartphones 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2008 2009 2010 2011 2012 2013 2014 2015 16 Forecast Forecast
Mobile carriers’ messageto the Smart phone and Tablet users・ Carry your Smart phone always in your pocket, and, carry your Tablet in your bag. (When you travel, also carry keyboard and AC power supply.)・ At your home and at your office, use WiFi. Don’t use 3G/4G network for data. Don t (We want to keep your monthly bill as small as possible.)・ Use the TV screen at any place when you want to show something you have place, in your Smart phone or Tablet to other people. 17
Demands for ubiquitous 3G connection is expanding・ Displays and Cameras anywhere Cameras,・ Sensors and Meters, anywhere.・ 3G connection for every electronics gadgets.・ “Remote Monitoring for the peace of mind Remote Monitoring” mind.・ Health care products needs 3G・ 3G connection is indispensable for “Point of sales” Blood Glucose Monitor Weight Scale PhotoVision Kids Monitor Watching Camera Cash Register Barcode Reader Display Advertisement 18 Vending Machine
Why 3G connection?・ Except those devices generating very heavy data traffic, traffic 3G will provide the most economical communication link. -3G is the best way to eliminate wiring, and, thus, save the high civil work cost. -3G connects any terminal directly to the Cloud, eliminating the Intermediate Servers.・ 3G connection provides the “peace of mind”, even in case th chance of using it is very slim. the h f i i li -Communication fee should not be charged on the volume of Communication transmitted data packets, but on the “value” it provided . 19
3 new SoftBank productswith embedded 3GmoduleThe word M2M may be misleading.Its t llIt actually M2H (Human) or H2M (H ) - Its too risky to allow M2M traffic grow without control control.Photo Vi i h bPh t Vision has been already very well accepted l d ll t din the market for the past 20 months. Other 2 newproducts are just going to be launched.Total number of M2M products of SoftBank is now1,133,838.1 133 838
Photo Vision (Digital Photo Frame) From Digital camera g E-mail to Photo Vision attaching pictures! From mobile Photo Vision From PC ・Various viewing modes with Clock with Calendar DPF-NS70 Multiple with Text MailBasic service charge: JPY690 / month 21
Mimamori-Camera (Watching) Service You can check your pet from outside You can take a picture from outside Check, How is he doing? check Take a picture! Check via TV call SMS Z001 Bowww… Bowww… MMS w/picture Give l Gi alarm and start to recording d t tt di Watch your family living far away by detecting the moving subject How are you doing? Check How are you Moved！ doing? via TV call SMS I’m fine! I’m fine!Hardware Price : JPY23,520 (JPY980*24months)Basic service charge : JPY490 / month Tariff TV call : JPY 21 / 30sec MMS/SMS : Free 22
Mimamori-Keitai (Watching) Service Inform the trouble One touch Call and Mail Buzzer！ Up to 20 contacts Pull a Up to 20 contacts Outgoing call ＋ （Call 1 number ) Push a Fixed phrase Strap Fixed phrase SMS Button SMS ♪ Fixed phrase SMS I’m lost… Location Location URL URL Hands-free Talk-back to Voice call Search the location Are you doing Where is Nancy？ all right? I’m fine! Kiddy Park ♪ Oh, she is in the No operation to p near by p y park！ start talkingTo be released mid March 2011 23