Google, NTT DoCoMo To Develop Cell Phone Software

December 27, 2007 0

“Japan’s leading mobile phone operator NTT DoCoMo Inc., trying to fight off resurgent competitors, will tie up with US search-engine giant Google Inc. to upgrade its services…”

Tokyo — Japan’s NTT DoCoMo Inc., the provider of mobile-phone services in Japan, is considering a tie-up with Google Inc., will integrate Internet search and e-mail functions into its “i-mode” Web service, company sources said on Tuesday.


“The move marks a strategic shift for Japan’s largest wireless operator by seeking a partner, as the firm has been lagging behind much smaller rivals in luring new subscribers in recent months.”

DoCoMo is attempting to address the needs of users who access the Web through their cell phones. For Google, the world’s largest search engine, the alliance will provide access to DoCoMo’s 48 million users of “i-mode” mobile phone Internet service as it trails Yahoo! Japan Corp. in the Japanese market, sources said, and is trying to strengthen services and advertising operations there.

“The alliance may eventually lead to the development of new functions and handsets, the sources said.”

The mobile phone giant decided on the deal as its subscribers are demanding ever-more sophisticated Internet functions on their mobile phones said the sources.

Starting as early as the spring, users will be able to access Google search, e-mail, scheduling and photo-saving features through NTT DoCoMo’s i-Mode Internet network, Japan’s main business daily The Nikkei said, without identifying its sources.

“The ‘i-mode’ service was launched in Japan as early as in 1999.”

The two firms plan to integrate the search feature with handset software, enabling the development of new services, the paper said.

Tokyo-based DoCoMo Inc. is also considering developing a next-generation handset using Google’s free operating system for mobile devices, it said. Such a phone could be introduced in the second half of next year, paving the way for the companies to roll out a wide range of cutting-edge services.

While DoCoMo has logged strong profits under its existing business model, younger customers, the core users of mobile Internet services, have defected to KDDI Corp. and Softbank Mobile Corp., causing Tokyo-based DoCoMo to lose subscribers, Nikkei said. DoMoCo has been the only carrier to lose subscribers since the introduction of number portability in late 2006, Nikkei said.

DoCoMo spokeswoman Makiko Furuta said users can already search the Internet with Google and other search engines through its i-Mode service. DoCoMo is also exploring other possibilities regarding both domestic and foreign search service providers, but nothing has been decided, she said.

DoCoMo’s business strategy has been to handle everything from communications infrastructure to services. With the surge in Internet use, however, the company determined that it could not meet customer needs on its own, the Nikkei said.

While rival KDDI has already been working with Google in search and email on its mobile phones, DoCoMo eyes deeper ties in services and technology with the U.S. firm, including development of next generation handset featuring Google’s operating system, the Nikkei said.

In a note to clients, Nomura Securities analyst Daisaku Masuno said DoCoMo’s move is expected to boost the firm’s data traffic revenue as expansion in services should increase page views.

“Meanwhile, Google has remained behind Yahoo Japan Corp. in the Japanese search engine market.”

For Mountain View, Calif.-based Google Inc., teaming up with DoCoMo will give the company better access to the Japanese search engine market, while gaining better access to mobile users. “Google seeks to bolster its services and advertising operations in the cellular segment, the Nikkei said.”

Domestic mobile service subscriptions exceed 100 million as of the end of last year, with some 70 million users accessing the Internet through their cellular phones.

NTT DoCoMo shares rose sharply on the report, gaining 6,000 yen or 3.3 percent to 190,000 at the end of the morning session, outpacing the 1.79 percent rise on the Tokyo Stock Exchange’s benchmark Nikkei-225 index.