Ntt Docomo 2003

Abstract

This case provides a rich forum to illustrate a pioneer's move from innovation to profit. It shows the power of the dominant design, barriers to appropriability and complementary assets, as well as the critical role of process capabilities. NTT DoCoMo, Japan's leading mobile-communications company, had become known as the world's "pioneer of mobile Internet services." The company's i-mode, low-band, mobile Internet service became a giant success. By 2002, the days of rapid growth had faded as the market became saturated. DoCoMo continued technology advancements and offered data services such as streaming audio, photo, and video-sending capacity with its 3G network. DoCoMo's 3G mobile phones, Freedom of Mobile multimedia Access (FOMA), had surpassed the 320,000 target number for the March 31, 2003, deadline.

Excerpt

UVA-ENT-0048

NTT DOCOMO 2003

From his forty-fourth floor office in the center of Tokyo, Dr. Keiji Tachikawa, president and CEO of NTT DoCoMo, Inc., looked out at the scenery below. Although the weather was perfect for early April, Tachikawa was unable to enjoy it. His gloominess was not because he had missed seeing the cherry blossoms a few days earlier but instead from the company's dim financial picture over the past six months. The only bright side was the latest news that the total cumulative number of users for DoCoMo's third-generation mobile phones, Freedom of Mobile multimedia Access (FOMA), had surpassed the 320,000 target number for the March 31, 2003, deadline.

The downside to reaching the target was that the numbers had been adjusted. The initial expectation was 1.38 million phones. DoCoMo's competitor, KDDI, achieved 7 million users for its third-generation mobile phones (CDMA2000 1x) on April 8, 2003—and it started the service six months later than DoCoMo's FOMA. Although Tachikawa was determined to pursue his original plan to increase the total number of users for FOMA and globalize its i-mode services and 3G technology, he had to build a consensus among his managers that the strategy was still sound.

Japanese Mobile History and the Start of a New Company

Japanese commercial mobile telephone service got its start in 1979, when the former Nippon Telegraph and Telephone Public Corporation (NTT Public Corp.), a state-owned monopoly, launched commercial car telephone services. While this service was wireless, it was not completely “mobile,” because the equipment weighed 7 kg (15.4 lbs), making it unrealistic to carry around. But the technology did allow customers to make phone calls from their cars.

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Keywords: implementation, innovation management, international marketing, strategic market planning, technological innovation, competitive advantage