Finding A Promising Market For An App, Smartphone Landscape in Japan

http://mobile.i-freek.co.jp/en/ ©I-FREEK MOBILE INC.

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Finding A Promising Market For An AppSmartphone Landscape in Japan

2013-2014ver.

I-FREEK MOBILE INC.An I-FREEK HOLDINGS INC. Company(Listed on the JASDAQ, securities code:3845)

http://mobile.i-freek.co.jp/en/

TEL：：：：+81-3-6743-3004(JAPAN)Mail：：：：[email protected]


1．Promising Market In Japan

In Japan, the most promising model is “Unlimited content model” in which a carrier provides the platform. I-FREEK MOBILE Inc. distributes apps to all major platforms.

From app development, distribution, to operation, I-FREEK MOBILE is an expert in Japan.

①Stickers and emoticons：DecoColle ②Camera App：photodeco+Updated daily. Over 150,000

emoji, emoticons, and stickers

are available for unlimited

usage. These can be used on

email and major messenger

apps such as Facebook, LINE, Kakaotalk.

High Usage!Ranked in the top!

Carrier NTT DoCoMo au KDDI Softbank Mobile

Name of platform Sugotoku au SmartPass Yahoo Premium

Numbers of

subscribers

1 million 8 million 9.52 million

Lots of stickers and frames,

and useful features to

make your photographs

super cute! You can share

photos on major SNS such

as Facebook, Twitter.

High Usage!Ranked in the top!


32．Our Performance

I-FREEK MOBILE is successfully adopting smartphone landscape in Japan. Our sales are increasing because of continuing growth of smartphone business.

More!

Strong sales on “Unlimited content model” in which a carrier provides the platform.

More!

More!

64%, now, comes from smartphone business.

Unlimited content model platforms operated by carriers

Continuing growth! More apps will be launched!

2013 1Q 2013 2Q 2013 3Q 2013 4Q 2014 1Q 2014 2QFY


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I-FREEK MOBILE INC. has been successfully adopting unique and lucrative smartphone market in Japan. In Japan, “Unlimited content model” in which a carrier provides the platform, is the most important distribution channel, now. I-FREEK MOBILE has been distributing several apps on this promising channel, and I-FREEK MOBILE has also established credibility and high performance.

Therefore, I-FREEK MOBILE is the best partner for app publishers for entering and developing business in Japan. So, call or email us now if you are an app publisher with a great app.

【CALL US OR EMAIL US NOW】I-FREEK MOBILE INC.

TEL：+81-3-6743-3004(JAPAN) Mail：[email protected]

3．Our Role for App Publishers Abroad


54．Now Offering!

We monetize your app in Japan!Start to Success Program for Apps

1. Localization• Japanese translation• Data preparation for Japanese users

2. Grant funding for development• Grant funding for app-to-web development

3. Channel acquisition for subscription model with unlimited use of apps and digital contents.

• Preparation of proposal material for cellular service operators.• Negotiations with cellular service operators.• Registration with cellular service operators.(IP under I-FREEK

MOBILE INC.)4. Service management

• Service management• Content planning and update for Japanese users.

5. Revenue sharing• We share 20% of revenue provided by a cellular service operators.

For example: If we receive ¥5,000,000 from an operator, we share ¥1,000,000 to your company.

I-FREEK MOBILE knows what-to-do and how-to-do for your app to be successful in Japan! Let us monetize your app!


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※RemarksThis document (p6-p13) is a summary of “Mobile Content Market Scale 2012” published by Mobile Contents Forum.

Full article available for download. http://www.mcf.or.jp/en/releasedata/files/mobilecontent_market_scale2012_en.pdf

Appendix

Mobile Content Business and Smartphone Landscape in Japan


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1. The 2012 total for mobile content related markets was 2,350.7 billion yen.

2. The mobile content market accounted for 851 billion yen.

3. Uniqueness of mobile content market in Japan

4. Major billing models in Japan

5. Summary

Table of Contents


8１．The 2012 total for mobile content related markets was 2,350.7 billion yen.

▶The 2012 total for mobile content related markets was 2,350.7 billion yen.▶The mobile content market accounted for 851 billion yen.▶The mobile commerce market accounted for 1,499.7 billion yen

Mobile content market statusMobile content

Mobile content related markets

Mobile commerce market

2009 2010 2011 2012


9２．The mobile content market accounted for 851 billion yen in 2012

Note: Values for the smartphone market prior to 2010 are reference vales and are not included in the market scale.

▶The mobile content market accounted for 851 billion yen in 2012▶The feature phone market accounted for 479.3 billion yen▶The smartphone market accounted for 371.7 billion yen

*1 Feature phones are defined as conventional mobile phones that can make use of IP services for mobile phonessuch as the i-mode. The feature phone market is defined as the market for selling digital content such as musicand games, based on a main model representing carrier charges on an official website related to feature phones.*2 Smartphones (including tablets) are defined as terminals that are Internet connectible open operating systems thatcan make general use via applications and Web browsers. The smartphone market is defined as the market forselling digital content (including applications) related to smartphones. Although game dedicated terminals, whichcan download game titles, and notebook PCs are capable of connecting to the Internet, they have not beenincluded in this market.


10３．Uniqueness of mobile content market in Japan▶In Japan, there are 3 billing models.1. Application model in which the market of the OS business operator is the

platform.2. Web content model in which the browser is the platform3. Unlimited content model in which a carrier provides the platform

Unique in

Japan

▶ Unlimited content model High barrier to entry. Need high

performance record on web content

model. Entrance is limited and need to

pass review by carriers.

▶ Web content model Publisher company needs to be

registered in Japan.

▶ Application model Low barrier to entry. At oligopoly

situation by major publishers.This image is made by I-FREEK MOBILE INC.


11４．Three Major Billing Models ①, ②

① Application model ② Web content model In this model, market management businesses, which distribute applications, set forth the business model, creating a need to use the charging system (charging fees of 30%) that the market management business provides. Sales in the application market have been dominated by games and social games. In addition to social game makers such as mobage and GREE, which have been providing applications since feature phones have been available, content that is peculiar to smartphones has been spreading, such as game applications like Puzzle & Dragons, and communication applications like those represented by LINE.

App Store

All three major mobile carriers in Japan, NTT DoCoMo, au KDDI, SoftBank Mobile used to provide a portal site

for web-content from a range of publishers. Now NTT

DoCoMo provides “dmenu”, and SoftBank Mobile provides

“menu-list”. Compared with applications, it is considered to

be the best model for constructing a profitable

business model since charges are mostly left to the

discretion of the publisher. However,

browser based content is not as expressive as native

applications, so if users begin to require richer

content, it can be thought that this will have a big impact on

the expansion of the market.

▶Low barrier to entry▶Numerous competitors worldwide ▶Stable monetization is difficult

Characteristics▶Needs to work with each carrier▶Publisher company needs to be registered in Japan▶Stable monetization is expected, but high barrier to entry

Characteristics


12４．Three Major Billing Models ③

③ Unlimited content model Unlimited content model is unique in Japan. All major three mobile carriers such as NTT DoCoMo, au KDDI, and Softbank provide platforms under this model. This model provides popular applications for a flat monthly rate. This plan is also popular with users who don't use many applications, people who are new to smartphone. Content providers receive revenue according to the usage status of the contents. As Smartphone usage in Japan is growing, this model is successfully attracting smartphone users in Japan. It is expected that this model continues to grow.

▶High performance on web content model is required to be a candidate.▶Should be approved by a carrier which provides the platform.▶There is a limitation on the number of apps to be accepted.▶Stable monetization.

Characteristics

Name of platform Available apps Number of subscrivers

Compatible devices

About 500 About 8 million AndroidiPhoneWeb

About 100 About 1 million AndroidWeb

About 1,000 About 9.52 million AndroidiPhoneWeb

※As of Oct 2013


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The market scale of the "mobile content market" in 2012 was 851 billion yen, which is up, providinga year-on-year increase of 116%. The market scale includes calculation divided between the feature phone market, which is the market for selling digital content such as music and games, based on amain model representing carrier charges on an official website related to feature phones, and the smartphone market, which is the market for selling digital content (including applications) related to smartphones.

Among the figures for the market, the "feature phone market" accounted for 479.3 billion, but but shrank rapidly at only 73% of the previous year's figures. On the other hand, the "smartphone market“ experienced quick growth at 371.7 billion yen for year-on-year growth of 461%.

In this trend, there is a unique billing model, Unlimited content model, that started influencing smartphone landscape in Japan.

５．Summary

※RemarksThis document (p6-p13) is a summary of “Mobile Content Market Scale 2012” published by Mobile Contents Forum.

Full article available for download. http://www.mcf.or.jp/en/releasedata/files/mobilecontent_market_scale2012_en.pdf

Date post:	09-May-2015
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Finding A Promising Market For An App, Smartphone Landscape in Japan

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