Mobile & Smart Phone Apps. and its related Market in Japan Masaaki Yoshikawa Director General Osaka Innovation Hub Osaka City Government Japan

Mobile & Smart Phone Apps. and its related Market

in Japan

Masaaki YoshikawaDirector General

Osaka Innovation HubOsaka City Government

Japan

http://www.innovation-osaka.jp

　　 Global Innovation Osaka

http://www.innovation-osaka.jp/



Topic

• Osaka Innovation Hub • Japanese Market Profile• Trend observed from Financial market• Internet Of Things

Osaka Innovation Hub

• Founded: by Osaka City Gov. • Goal : To Build an Innovation Ecosystem, and

to become a gateway to and from the World• Regional Organizer of the Contest (2014)

Mono-App. Hackerthon -ICT x Hardware-

• Gadget Hackerthon, “Mono App. Hackerthon”– Smart Toy by MOFF

• Sharp– SmartPhone x TV

• Sony– Xperia Wearable

• Docomo – Hardware Devices

Moff: a company born from the Mono App. Hackerthon

Japanese Market Profile

Mobile Phone OS Share-Shifting to Smartphones-

2012.8 2013.80%

10%

20%

30%

40%

50%

60%

70%

80%

Mobile Phone OS Share**

Feature PhoneAndroidAppleOthers

Mobile Phone Contracts: 129.13Million (2012.Dec.)**Telecommunications Carriers Association (TCA)

**Source: comScore MobiLiens

61.8%

13.2%

24.6%

0.4%

Declining, but …still large

Smartphone Penetration (2013)-International Comparison-

Source: Google Our Mobile Planet

china

Hong Kong

IndonesiaIsr

aelJapan

Korea

Malaysia

Phillipines

Singapore

Taiwan

Thailand

USA

Vietnam

47%

63%

14%

57%

25%

73%

35% 39%

72%

51%

31%

56%

20%

Mobile content & the related market in Japan, 2012

- USD 23.5 Bill -

2009 2010 2011 20120

5,000

10,000

15,000

20,000

25,000

Mobile content and commerce market in Japan

Mobile Commerce MarketMobile Content Market

(Unit: USD Million )

Market 2009 2010 2011Year-on-

Year 2012Year-on-

YearMobile Content Market 5,525 6,465 7,345 114% 8,510 116%Mobile Commerce Market 9,681 10,085 11,716 116% 14,997 128%Mobile Content related market 15,206 16,550 19,061 115% 23,507 123%

15,206 16,550

19,061

23,507

Source: Ministry of Internal Affairs and Communications“ Results of Survey on Actual Status of Industrial Structure of Mobile Contents in 2012” with Mobile Content Forum survey in 2012

• Commerce Market: Shopping, Services, Transaction• Content Market: Paid digital content, i.e. games, music

“Mobile”: Feature Phone and Smartphone

The mobile content market in 2012-Feature phone & Smartphone: 8.5Bill-

(Unit: USD Million )

　 2009 2010 2011Year-on-

Year 2012Year-on-

YearFeature phone market 5,525 6,465 6,539 101% 4,793 73%Smartphone market *35 *123 806 655% 3,717 461%Mobile content market 5,525 6,465 7,345 114% 8,510 116%Note: * are reference values.Source: Ministry of Internal Affairs and Communications" Results of Survey on Actual Status of Industrial Structure of Mobile Contents in 2012" with Mobile Content Forum Survey

2009 2010 2011 20120

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Mobile Content Market-Feature phone and Smartphone-

Smartphone marketFeature phone market

5,525

6,465

8,5107,345

Feature Phone market remarkably declined in 2012, transiting to Smart Phone.

Feature Phone/Content Market Segments -Japan has well cultivated markets since i-Mode -

( Unit: USD Mill.)

Source: Ministry of Internal Affairs and Communications" Results of Survey on Actual Status of Industrial Structure of Mobile Contents in 2012" with Mobile Content Forum Survey

　 2009 2010 2011 2012 Year On Year

Ringtone 402 335 287 200 70%

Chaku-uta 1,201 1,133 942 554 59%

Mobile game 884 822 570 398 70%

Decoration mail 228 243 213 128 70%

E-Book 500 516 489 320 65%

Ring-back tone 115 130 118 94 80%

Fortune telling 191 185 180 122 68%

Standby 226 214 172 108 63%

Kisekae 99 117 103 54 52%

Weather/News 97 127 140 120 86%

Traffic information 241 267 217 160 74%

Life information 121 170 168 159 95%

Scocial game 447 1,389 2,078 1,888 91%

Video dedicated 112 162 176 93 53%

Arts and entertaiment 241 242 242 103 43%

Media / Information 66 62 54 37 69%

Others 354 351 390 255 65%

Feature phone market 5,525 6,465 6,539 4,793 73%

Smartphone Content market segment( Unit: USD Million )

　 2011 2012 Year on YearGame and social game 481 2,607 542%Music content market - 198 -Video and movie - 262 -Others 325 650 -Smartphone market 806 3,717 461%

2011 20120

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

481

2,607

0

198

0

262

325

650

Game and social game Music content marketVideo and movie Others


GAME: 70%!

Killer Applications on SmartPhone

• Puzzle & Dragons– Lunched in Feb. 2012

– USD 70MIl/Month (Only this app) – #1 Revenued App in Google Play in

the world (Distimo 2013.Sept)• Line– Lunched in June, 2011– Users: 400Mil– #3 Revenued APP in Google Play :

LINE Pokopang (Distimo 2013.sept)

© GungHo Online Entertainment, Inc.

©LINE Corpration

Number of Paid Apps installed (2013)- Japan Pays Apps more than 2 X -

Source: Google Our Mobile Planet

china

Hong Kong

IndonesiaIsr

aelJap

anKorea

Malaysi

a

Phillipines

Singa

pore

Taiwan

Thailan

dUSA

Vietnam

2

14

73

18

3 5 4 6 84

8 8

Revenue of Apps. at Google Play in Japan: #1 in the world

• “The only major country where Google vies with iOS on equal revenue terms” (App Annie Intelligence)

2012.Sept. 2013.sept0

50

100

150

200

250

300

350

400

450

500

OtherUSKoreaJapan

Google Play revenue in the world: Japan is #1.( Data Source:Distimo)

100

470

Japan becomes the #1 revenue market for Smartphone in 2013.

Oct.2012 Oct.20130

50

100

150

200

250

300

350

400

App.Store & Google Play (Combined)Monthly Indexed Revenue

JAPANUSAKoreaUK

Inde

xed

Reve

nue

Source: App Annie Intelligence

The mobile commerce market (2012)( Unit:　 USD Million )

　 2009 2010 2011 2012Year on

YearShopping 4,284 4,392 5,839 6,878 118%Services 3,891 4,109 4,249 6,281 148%Transaction 1,542 1,584 1,628 1,838 113%Total 9,717 10,085 11,716 14,997 128%

2009 2010 2011 20120

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

TransactionServicesShopping


Advertising Market- Internet -

(UNIT: USD Million)

　 2,011 2,012 2,013Total Amount of AD. 57,098 58,913 59,662Mass media (TV, Radio, News Paper, Magazine) 27,018 27,796 27,825Satellite related 891 1,013 1,110Internet 8,062 8,680 9,281Promotional media 21,127 21,424 21,446

Source: Dentsu ; Feb.20, 2014, http://dentsu-ho.com/articles/789

47%

2%

16%

36%

Advertisement per category (2013)

Mass media (TV,Radio, News Paper, Magazine)Satellite related InternetPromotional media

Smartphone Advertising Market-Forecast-

Source: Cyber Agents based on Seed Planning data

2011 2012 2013 2014* 2015* 2016*

249

856

1,652

2,304

2,758

3,056

(Unit: USD Million)

　 2011 2012 2013 2014* 2015* 2016*

SmartPhone AD. Market 249 856 1,652 2,304 2,758 3,056

*Forecasted

Trend observed from the Financial Market

• Fin. Tech• Commerce• Edu. Tech• Social & Crowd & Curation• Hardware (Internet Of Thing)

Source: Sun Bridge Global Ventures Inc., A member of Super Producers of Osaka Innovation Hub

Fin.Tech• Personal Accounting– Money Forward :

Funded $5M • B2B Accounting– Accounting Free :

Funded $10.7M• Square-like payment

gadget– Coiney: Funded $8M


Commerce

• Shopify-like online shop platform– Stores: Acquired by StartToday

$6M– BASE: Funded $2M

• Delivery Mall– Gochi-Kuru: Funded $10M

• Second-Hand C2C EC– Sumally: Funded $1.5M– Mercari:Funded $14.5M


Edu.Tech

• Online tutoring– RareJob: funded

$3.3M• Massive open online

course (Mooc)– Schoo web-campus:

funded $1.5M• Game/app education– Quipper : funded $5M


Social & Crowd & Curation

• News App– SmartNews: Funded $4.2M– Gunosy: Funded $12M– Antenna: Funded $20M

• Yelp-like social rating– Retty: Funded $3.3

• Crowd sourcing– CrowdWoks: Funded $11M– Gengo: Funded $12M

• Event– PeaTix: Funded $3M


Hardware (Internet of Thing)

• Wearable– Moff: raised $79k on

– Ring: raised $890k on


Internet of Thing- Business Pitch Contest-

• HackOsaka 2014– Key note speakers: • Eric Migicovsky, Pebble

Technology CEO, (USA)• Matt Webb, BERG CEO (UK)

– International Pitch Contests: • From Taiwan, Singapore,

Indonesia, Australia, UK, ..

HackOsaka 2015 : February 10th, 2015WELCOME to Pitch your Smartphone Apps..

Conclusion• The Mobile content market is USD 8.5 Bill. Its related

market, Mobile commerce market is USD 15 BilL. (Acc.to Mobile Content Forum Survey)

• Some portion of the Advertisement market on Internet and Promotional media (USD 30 Bill.) should be additionally considered to the Mobile content market.

• The Japanese mobile content market is one of biggest in the world, and has been commercially well cultivated since the “i-mode” created the market in 1999.

• According to Anny App Intelligence, Japanese revenued market on Smartphone has become #1 in the world in 2013.

Conclusion (2)

• The transition to Smartphone from Feature phone has been remarkably taking place since 2012.

• Trends in Japan for Mobile apps are, we see from the financial market, , 5 categories:

1)Fin.Tech, 2)Commerce, 3)Edu.Tech, 4)Social & Crowd & Curation, 5)Hardware (Internet of Thing)• Osaka Innovation Hub will hold a International Pitch

Contest, called “HackOsaka” in 2015; Registrations on Smartphone Apps, including IOT( Internet of Things) are to be welcomed!

Documents

Mobile & Smart Phone Apps. and its related Market in Japan Masaaki Yoshikawa Director General Osaka Innovation Hub Osaka City Government Japan