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Mobile Felica
Group-5 | Section-A
Aman (19/064)
Dharmanshu
(19/076)
Rishi Tarkesh
(19/313)
Shubham (19/346)
Suraj (19/350)
1.
Sources of Profit
and Barriers for
adoption of
Felica
As a major shareholder of Felica networks, Docomo, apart from the aforementioned profits,
also had the advantage of learning about new mobile apps before competitors. Thus it had
launch time advantages and a head start in negotiating for exclusive rights
Competing Technologies
to security
Users#2: Shoppers
Docomo should keep the platform open for rivals as this will help in ensuring that
the industry converges on this platform and it becomes the industry standard
In order to attract more customers, Docomo should keep the platform open for
component suppliers and all users
2.
Is Docomo wise
to offer existing
mobile phone
rivals access to
Felica?
Strong network effects; thus Felica applications and reader locations were
likely to proliferate if Docomos rivals also adopted the technology
Multi-homing Costs
Multi homing costs are high as the users would have to pay separately for
access to each of the platforms which is highly unlikely
Differentiated
features
Based on the above analysis, it can be concluded that the network market is likely to be
served by a single platform in the long term
Thus Docomo is right to offer existing mobile phone rivals access to Felica as this step will
help in promoting Felica to become the industry standard
Offering mobile phone rivals access will help in substantially improving the customer base
3.
Pricing of Felica
in short term &
long term?
Pricing of Felicia ?
The core objective of Felicia is rapid market adoption and make it the de- facto
standard.
With the launch of Felica phones by Docomo in June 2004, in a space of six months
Docomo was able to sell 1.3 million handsets (1.62% of the entire market).
We advocate making the consumers as the subsidy side. We can wave all app
installation fees in the initial period subsequent purchase thereby allowing faster
adoption.
In the long term, we envisage making Felica all encompassing platform, whereby 3rd
party developers would be allowed to develop apps for Felica. A commission would be
charged based on paid app sold over Felica.
As for the licensing fees and network management fees, we advocate retaining them
both in short term & long term.
4.
What strategy
should Docomo
use in E Money
and in Credit Cards
Users#2: Shoppers
Issue at Hand:
Deciding upon who would be the Platform Component Supplier
Options Available:
Docomo has already decided not to retain exclusive rights over Felicia buy
allowing Felicia Networks to license its technology to other carriers.
This would involve joint development of e-money reader, such that they can be rapidly
pushed to vendors who are now reluctant to invest in three different e-money readers.
When a single money reader would become the industry standard, they would have
no option but to co-opt to enjoy strong cross-side network effects.
As of now Edy, JR East & JCB are competing in different markets. Edy in mainstream
shopping, JR East in railway transport & JCB in post-paid revolving credit.
But essentially there target market is converging to the same segment, & each would
find it difficult to go on its own. Hence Docomo with its virtue of being Platform
Sponsor & a major platform provider could lead the industry in setting a common
standard.
The key here for Docomo is to keep its platform open, upon which different service
providers can build their services to access the strong cross-network effects. The
range of services (different credit card companies present on Felicia) would in turn
reinforce further adoption of Felicia by different credit card service holders.
We advocate, that Felicia should allow different credit card companies to build
upon its network & access its growing user base rather than getting in a exclusive
partnership and risk being involved in a internecine battle.
This in turn would lead Felicia to become a one stop platform for all mobile related
contactless communications & payment technologies.
Thanks
!