B.C. capitalizing on the new culture of openness in Japanese telecom market

Every week Techvibes republishes an article (or two) from Business in Vancouver. This article was originally published in issue #1078 – June 29 – July 5, 2010.

Wireless developers in B.C. are making early headway in capitalizing on lucrative opportunities in the Japanese telecom market, which is reaching out to the rest of the world after thriving in isolation since the advent of the mobile phone.

The latest sign of strengthened Japan-B.C. wireless ties came last week when a three-member delegation from the Mobile Computing Promotion Consortium (MCPC) arrived in Vancouver courting members of B.C.’s wireless cluster. The consortium represents 168 Japanese wireless carriers, manufacturers and application developers.

The delegation was visiting Vancouver as part of a partnership between it and Wavefront AC, which is a government-funded commercialization centre for B.C.’s wireless community.

In the partnership, which was formed last June after the two organizations met at a technology conference in Las Vegas in April 2009, Wavefront is the eyes and ears for Japanese companies seeking access to Canadian technologies and applications.

Given Wavefront’s presence in B.C. and B.C.’s geographical proximity to Japan, B.C. companies have an advantage over their counterparts in the rest of Canada in attracting business from Japan.

Of the 13 companies that met with the Japanese delegation last week to receive marketability assessments and tips on tackling the Japanese telecom space, nine were from B.C.

Representatives from Wavefront have been to Japan four times since they made the pact last June.

Last November, three Vancouver companies – Mobify, Absolute Software Corp. (TSX:ABT) and LiveCast Media Inc. – travelled to Japan with Wavefront.

The junket was the most immediately fruitful for Mobify: it closed a deal in Japan within a couple months of the November trip.

In that deal, Japanese web designers are using Mobify’s development platform to convert Japanese websites into mobile websites on western-style mobile phones like the iPhone and Android-powered phones.

Mobile Internet penetration in the country is more than double the U.S. or top European countries.

But that market has been developed solely by domestic companies.

As the market has evolved over the years, unique interfaces and technologies, not to mention cultural and language barriers, have made it difficult for international companies to penetrate Japan.

A programmer at a Wavefront mixer last week likened the Japanese market to the Galapagos Islands, which are abundantly populated with flora and fauna that’s distinct from the rest of the world.

But now Japanese consumers are embracing western-style smartphones.

The average Japanese consumer carries two mobile devices: a cellphone with unique Japanese interfaces and technologies for talking and texting and a western-style smartphone for accessing the Internet.

Igor Faletski, Mobify’s CEO, told BIV last week that the Japanese wireless community “is looking to western companies for answers because their own industry has been focused on their domestic market.”

But Wavefront president Jim Maynard said that doesn’t mean the Japanese are opening the door to just anyone.

He said relationships with Japanese firms are often formed by facilitated introductions.

“Because of the nature of their culture, they’re very careful to understand the people they’re potentially working with before they make any kind of introduction or decision. Our companies here probably aren’t used to the level of due diligence upfront before you even get to have a meeting.”

Wavefront has other programs to help wireless companies access other markets, but its relationship with Japan is its most advanced.

“The goal is to take what we’ve learned from the Japanese experience and start broadening our ties with other geographies,” said Maynard.

Other companies in B.C. targeting the Japanese market include HootSuite Media Inc.

Approximately 39% of HootSuite’s web traffic in May came from Japan, and the company recently hired two Japanese-speaking employees to localize its Twitter client for use in Japanese.

Hajime Muto, one of the members of the MCPC delegation that was in Vancouver last week, told BIV through a translator that Canada is known in Japan as the home of the BlackBerry.

Muto, who is a general manager in a division of NTT DOCOMO Inc. – one of Japan’s largest mobile-service providers – said Canada has a good understanding of international markets and all the cultural nuances and technologies that support them because it hasn’t been able to rely on its own small domestic market.

He added that the mobile industry is entering a new global era in which there will be significant changes and evolution in the next decade.

“And for that, we feel [Japan] should broaden [its] perspective, because [advancing mobile technologies] is not something that Japan or Europe or North America can do alone,” he said.

“We have to really take a global perspective and work together to try and steer the next 10 years for our mutual benefit.”