Constant Touch (7 page)

It
might seem strange to have read almost half a book about the development of a new consumer technology without Japan entering the story. In fact, for the first decade of the Japanese cellular phone, there was little to remark upon. Indeed, it paralleled developments in an average European country, for example Spain, where a monopolistic public telephone service introduced an early but expensive system, but take-up rates were low. Nippon Telegraph and Telephone (NTT), then a public corporation, launched a cellular service around Tokyo, and a smaller one around Osaka, in 1979 – among the first commercial cellphones in the world. But ten years later, only 0.15 per cent of the population had bought the deal.

Of course, the peerless Japanese electronics manufacturers, such as NEC, Matsushita (under the Pana­sonic brand name) and Sony, supplied equipment to cellular services growing elsewhere in the world. But despite the excellence of the product, export suffered from measures taken to protect American or European markets. By the late 1980s many telecommunications markets were being opened up to competition. However, regulation could take protectionist forms, even if it had been designed for other reasons. In the case
of GSM phones, the thorny and complex problem of patents meant that only a handful of companies (of which only Motorola were non-European) gained access to a highly profitable pan-European market. Japanese firms lay outside the walls of ‘fortress Europe' for phones. They were also hampered by the bursting of the Japanese bubble economy in the early 1990s, which meant that the manufacturers were distracted, inward-looking and cautious, just as GSM was launched in Europe.

The Japanese mobile gets interesting – and very distinctive – from the late 1980s. NTT's monopoly was broken when two companies offered cellular services: the Nippon Idou Tsushin (IDO) corporation around Tokyo, and Daini Denden Incorporated (DDI) around Kansai. The resulting patchwork of incompatible standards bears comparison with Europe before GSM or the United States even now. While GSM represented for Europe a remarkable experiment in coordinated technological action, this style of policy, involving close cooperation between government agencies and private corporations, was for Japan a familiar and successful model of technological innovation. The result was a new digital mobile standard, agreed by 1989 and licensed to three consortia, led by NTT, Nissan and Japan Telecom respectively. With compatibility and competition came fast growth: nearly 9 million subscribers (7 per cent of the population) by the end of 1995.

It
was NTT's mobile division, later a separate company eventually called NTT DoCoMo, that benefited from an astounding transformation of the mobile phone, a change led by the users themselves. The company had already built up a large customer base for its cellular phones: 1 million subscribers in 1993 (the year of the digital launch), 10 million by February 1997 and 20 million only eighteen months later. (And the growth would continue: 30 million in 2000 and 40 million by 2002.) But in 1999, DoCoMo created a new service. Called
‘i-mode', it was an instant hit. Distinctively, it was the hyper-fashion-conscious Japanese teenagers that led the way. Ten million had i-mode by 1999; a number that doubled in a year, and trebled in two. They wanted i-mode, but what was it?

I was amazed when I smashed my phone up how many components were inside. There's a lot more than just a microphone, loudspeaker and radio transmitter and receiver. Most importantly, there's a chip. The presence of a microprocessor means that a cellphone can potentially do anything that a computer can do: it can send, receive, store, show and change data in pretty much any form required. So there was never any reason to think of it as just a voice communication device. A mobile is – or could be – much, much more than a phone.

So a mobile could carry data as well as mere voices. In the 1990s, this was already old hat. But while speculators might pin their hopes – and investments – on a convergence of information and communication technologies (which produced the great telecoms bubble that would nearly wreck the world's economy in the first years of the 21st century), there was precious little evidence from anywhere in the world that consumers wanted more than a phone. Videophones, for example, in which you could see who you were talking to, have been technically feasible for decades. They have been launched several times, but always failed. Dashing the hopes
of telephone companies, people preferred the low-tech, low-bandwidth voice-only telephone conversation, with its capacity to keep revealing expressions – and one's appearance – hidden. Text messaging had been written into the GSM standard, but almost as an afterthought. In the West, the attempt to combine limited access to online information via the mobile phone, based on Wireless Application Protocol (WAP), was greeted with much fanfare in early 2000, but was a disappointment. The limited range of WAP content available made the service seem tame compared to the wilds of the internet, and dispiritingly corporate. For those who wanted the corporate product of Disney, Nike or Champions League Football – and there were, of course, millions who did – there were better ways of consuming it than via the inch-wide WAP screen. For those for whom the restriction to corporate product was a turn-off? Well, they never turned WAP on.

i-mode was like WAP, but it worked. In both systems, the operator controlled access to digital content. But while the walled garden of WAP wilted, i-mode's flourished. To understand why, we need to look a bit closer at the horticulture: how i-mode content was grown and provided, and how it fitted with Japanese society. i-mode acted as a gateway. Any provider of content had to satisfy NTT DoCoMo's strict rules concerning what content was allowed and what was not. Content would be current, attractive and safe. This guarantee of quality meant
that the owner of the i-mode phone would not be shocked or defrauded. In return for self-censorship, the content provider was granted access to NTT DoCoMo's already considerable market of subscribers. Furthermore, the complicated question of billing – the rock on which nearly all models of electronic commerce are wrecked – was solved: amounts of downloaded data were totted up and charged as part of the phone bill. Only DoCoMo, gatekeeping transactions as both broker and guarantor, could do this. Furthermore, unlike WAP or most people's personal computers (at the time), i-mode would be always online. Kei-ichi Enoki, managing director for i-mode, has summed up i-mode's philosophy of restricted content and constant access:

PCs are like department stores. They have a wide selection of content, including excellent graphic images. If you decide to make a visit, you can stay as long as you like and explore different sites at your leisure. [By contrast] mobile phones are more like convenience stores, where only a selection of goods are on display in the limited space available. The contents have to be simple, but the convenience comes from the fact that they can be accessed at any time.

Convenience was of course a virtue in an intensely hectic
country such as Japan. Indeed, when i-mode was launched, the content sanctioned by NTT DoCoMo seemed squarely aimed at the busy salaryman. For ¥300 a month, a January 1999 press release promised subscribers the chance to reserve airline and concert tickets, check their bank balances, transfer money, send and receive email (a real draw, since government regulation of NTT had checked the growth of the internet in Japan), and to register for the ‘Message Service', which automatically gathered information on ‘weather, stocks and other topics, depending on choice'. All very safe, adult and probably heading for failure. In contrast, i-mode was discovered by teenagers and young adults. It particularly appealed to single women in their twenties, whose economic status was rising rapidly just as that of the working man with a job for life declined. A different, and very profitable, dynamic sprung up. i-mode not only gave its young subscribers instant access to new goods but also kept them in constant touch with each other, intensifying the pattern of rapid change still further. In turn, providers of commodities, well aware that the spending power of the Japanese teenager was second to none, had access through i-mode to a fast-moving, capricious but profitable market. The young yen saved i-mode, and demonstrated that the mobile phone could really be more than just a talking point.

Japanese mobile phones have remained highly distinctive.
Compared to American or European handsets, they will typically have far more specialised hardware features, come in a ‘clam shell' design, and have more advanced functions more early. Mobile TV arrived first, for example, in Japan in 2005, and third-generation networks grew faster there than anywhere else. This mixture of advancement and distinctiveness is a source both of pride and concern for Japanese electronics companies. Firms such as Casio, NEC, Sharp and Panasonic sell well to their home market but very poorly outside. ‘Japan's cellphones are like the endemic species that Darwin encountered on the Galapagos Islands – fantastically evolved and divergent from their mainland cousins,' explained Takeshi Natsuno to Hiroko Tabuchi in the
New York Times
in 2009. Natsuno is a particularly well-informed observer of the Japanese scene as he was one of the leading executives at NTT DoCoMo at the time of i-mode. This ‘Galapagos syndrome' explains, wrote Tabuchi, why Japan's mobile phones have not gone global.

Now such a statement is true at the level of the design and manufacture of handsets. The global leaders now (in 2012) are firms such as Apple and Samsung. But there is one important sense in which the Japanese approach has anticipated, if not been copied. The ‘walled garden' approach to content, with all its dangers, would be embraced by Apple throughout the app revolution of the 2000s.

China
and India, such radically different countries, were often invoked together in the 2000s because they both possessed rapidly booming but uneven economies that, projecting forward, would soon rival those of the United States and Europe. They both had populations above, or soon to reach, 1 billion, and therefore also offered the largest potential markets on the planet for new products and services.

In 2004, whereas fewer than five in 100 people in India owned a mobile phone, this level of access already equalled the number of Indian fixed line customers, just over 40 million. What this tells us, of course, is that private individual possession of a telephone of any kind was relatively unusual on the subcontinent. The spread of the mobile phone has therefore been the expansion of private ownership at the expense of more public or shared means of communication. Indeed the growth in just half a decade was extraordinary: from 8 per cent of the population in 2005 to 70 per cent, reaching over half of all households, in 2010, according to the World Bank. And this expansion illustrates the continuing globalisation of cellphone businesses; Vodafone, for example, has seven
times more Indian subscribers than in its home market, Britain.

Partly this growth was driven by the manufacturers, having saturated the markets in the West, slashing prices to chase the Indian consumer with offers of ‘ultra-low-cost' handsets. (A similar pattern may be emerging in the 2010s, as companies such as Google work with Indian companies to develop cheap smartphones.) These ultra-low-cost handsets lacked many of the features of Western second-generation phones – screens would be black and white, not colour, and had few gizmos such as cameras or large memories. However, for the Indian consumer, as for the American, Japanese or European, the mobile phone was aspirational: a marker of status, albeit in complex and culturally embedded ways. The ultra-low-cost phone therefore
might have a market, but it would not be the desirable phone of choice.

Another issue is geographical coverage, not only of cellular networks but also of the internet, to which third- and fourth-generation phones need to be able to connect to be most useful. Even after great growth, and with eight companies competing for subscribers, the cellular networks only reached just over four out of five Indians in 2010. ‘The bottleneck' in India, reports the World Bank, ‘is coverage.' Likewise, for smartphones – phones which have rich visual interfaces and connect to the internet – the problem is access to the web. Indeed, in 2012, the BBC reported the case of an ‘offline' mobile app shop that had opened in Mumbai to satisfy an unmet demand. This is related to another bottleneck, although in this case one of economic development: namely that the lucrative business of Indian programmers writing apps for the Indian market is being constrained by the lack of web access. As we shall see, however, not for long.

Modern India was formed by partition, and is bordered by Pakistan and Bangladesh. The geopolitics of cellular phone networks reflect the fraught relations between neighbours. In November 2009, following concerns expressed by the Indian intelligence agencies that untraceable phones were being used by militants, millions of mobile phones without valid IMEI (International Mobile Equipment Identity) numbers – cheap,
unbranded, ultra-low-cost phones – were blocked. On the border, in the Kashmir Valley specifically, the Indian government banned prepaid phones, affecting over 3 million users. The ban was only lifted the following year, when a system of verifying the identity of prepaid phone users had been hammered out. Once users became ‘legible' – readable by authorities – the anxiety subsided somewhat. Tensions also arise over the fact that the radio waves sent and received by mobile phone masts are no respecters of international borders. Here for example is the
Times of India
, a relatively moderate paper, reporting on the issue in 2012:

According to the reliable sources, Pakistan in its conspiracy against India has set up over three dozen new mobile towers near the international border adjoining Jaisalmer, Bikaner, Ganganagar and Barmer in Rajasthan. The signals of these mobile towers are getting into the Indian territory up to 15–20 km, which is becoming a threat to the security for India. … [Furthermore, many] smugglers and spies are getting Pakistan Sims … in large numbers through the Thar Express.

Pakistani songs and speeches might be being smuggled via this railway connection between Karachi and Rajasthan, while the newspaper also reported ‘information that a few old smugglers in Longewala, Ghotaru,
Ramgarh area in Jaisalmer district, climb the old towers or go the [highest] places … [to use] Pak sims [to] send … confidential information to Pak intelligence agency ISI'. In other words, cellular networks near the border were seen as the tools of spies.

The spread of messages through the networks could also unnerve Indians, or exacerbate existing social conflicts. For example, India's north-eastern states are squeezed between Bangladesh and Myanmar to the south and China and Bhutan to the north. In this relatively isolated part of the country there is great ethnic and cultural diversity. When violence broke out in August 2012 in the north-east Indian state of Assam, between Bodo tribespeople and Muslim settlers, rumours of imminent attacks started spreading by text message and phone-based social media among north-east Indians living in the southern cities. Many thousands fled Bangalore, Chennai, Delhi and Mumbai despite repeated official reassurances, and indeed despite there being no evidence of an existing threat. ‘Friends from NE please do not go by rumours being spread,' tweeted the Delhi police commissioner Neeraj Kumar: ‘They are rumours and only rumours.'

In the case of China we have already seen how the march of the mobile phone masts mirrored the economic reforms as they gathered pace in the 1990s. In the mid-2000s, cellphones were relatively costly, and therefore the preserve of the more wealthy, middle-class Chinese.
People bought foreign brands, such as Nokia or Motorola, although there were Chinese mobile companies – Lenovo, Ningbo Bird, Konka and TCL – as well as so-called
shanzhai
, or black market, phones made by smaller, arguably even more entrepreneurial Chinese firms. By 2009,
shanzhai
phones made up one in five sales in China, and were being illegally exported to markets across the world, from Russia and India to Europe and the United States. ‘We are a kind of illegal producer,' said Zhang Feiyang, owner of a firm called Yuanyang, to the
New York Times
. ‘In Shenzhen there are many small mills, hidden. Basically, we make any type of cellphone.' One Yuanyang product was knock-off iPhones, made for a fraction of Apple's selling price.

By 2010 over seven in ten Chinese possessed a mobile phone. The billionth Chinese consumer switched on his phone in 2012, the same year as the Chinese smartphone market overtook the American.