Friday, August 9, 2013

Why Japanese carriers put "bloatware" on your smart phone (aka Why docomo won't sell iPhone)



If you buy an Android handset in Japan, you will be surprised how much bloatware there is on your phone. It can't be uninstalled without root, and only a small portion of it can be disabled, so you it can be hard to escape all the advertisements being pushed from the bloatware. (fortunately, it seems that the heaviest of the "notification spam" bloatware can be disabled).

To understand why they do this, take a look NTT Docomo's income statement. (Source)

 14% of sales from bloatware


Net sales : Billion JPY (year on year)
Mobile communication service (△7.4%)
749
Device sales  (+42.8%)
212
Others (+32.7%)
151

(Others is "Contents, payment services, handset insurance, ads, etc")


 You can see that 14% of their sales is from other optional services, such as bloatware, and it's continuously growing.

 Carriers sell devices at a loss


 And also from the report, the first quarter device sales is 63B - monthly support 70B = -6.6B.

They also show ARPU (Average Revenue Per Unit) for the three segments.
ARPU (Yen, the 1st quater 2013)
ARPU
Voice ARPU
1,470
Packet ARPU
2,680
Smart ARPU
460

You see that 10% of ARPU is from other services. (That they call Smart ARPU)
The point here is that Voice / Packet service need a huge infrastructure investment, but bloatware doesn't require so much - only developing apps - so the profit rate is much higher (and push up your packet usage too!)

 Others Sales ≒ Smart ARPU




So, as long as their profit structure is
1. Selling devices at a loss; 
2. Earning their profit from packet communication fees and other services; 
You can't avoid bloatware. It's their goose that lays the easiest, fastest golden eggs.
(And that's why docomo won't sell iPhone, because they can't put bloatware on it)


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