“With mixed feelings, but no real shock, we announce the premature passing of iMode.” You won’t find this announcement in the obituary columns. You probably won’t hear any eulogies of the departed, either. Actually, iMode is now in a coma -- a vegetable. Its life support systems aren’t being completely shut off, so the announcement of its death is unofficial. To tell the truth, though, the entity that was to have given iMode life, and to have infused it with blood in the form of financial resources and management attention is no longer doing so.
iMode is the content platform of Japanese wireless giant NTT DoCoMo (TSE: 9437; NYSE: DCM; LSE: NDCM). It includes technological tools, local and international content, and special end-user devices. IMode’s content delivery features simplicity and a minimum of clicks by users.
Launching the iMode platform last September was supposed to be Israeli wireless operator Cellcom’s most important innovation in years, and one of its most significant ever. It was designed to distinguish Cellcom from the other wireless operators, and to substantially boost the company’s content revenue. Cellcom’s previous management worked on it for over 18 months. Now, a few months after the launch, it is evident that iMode will not take off.
Timing is everything in life, and that’s true for iMode, too. Its fate was sealed the moment that Cellcom’s new owners replaced the company’s management. The new team, headed by CEO Amos Shapira, doesn’t believe that iMode should be Cellcom’s main content platform. It expresses this lack of belief in iMode by not allocating resources to it.
I don’t want to judge whether adopting iMode was correct or a fundamental error. Not even results can answer that question now, because such results do not exist, and never will. Cellcom’s competitors had two main criticisms of iMode. The first was that the service was more suitable to Japan than to Western countries. The second was that the wireless industry had greatly changed since the service was launched in Japan in 1999, and iMode is no longer needed for offering diverse wireless content.
Consistency was never a Cellcom virtue
Other operators around the world joined the “iMode alliance”, including giant Russian and British operators. This fact indicates that many operators nevertheless found the iMode vision logical, even outside Japan, because the platform was powerful, and made it easy to use content.
iMode, however, demanded Cellcom’s full attention. Benign neglect won’t do the trick. Installing the iMode platform, with its technology, switching, content, and education of subscribers, is a very expensive project that takes management resources away from other areas. Cellcom’s previous management, headed by former president and CEO Dr. Yitzhak Peterburg, decided on an unconventional approach to wireless content and its use. The system they chose might have proved successful in the Israeli wireless content market, which has not yet taken off. However, it also risked a loss of direction, resources, and time, thereby turning Cellcom into a loser in its competition with the other wireless operators. The company’s new management has decided that the risk outweighs the reward.
Don’t get me wrong. iMode currently has 70,000 subscribers, and Cellcom’s target is 150,000 by the end of this year. The platform is not being abandoned completely, perhaps because the company realizes that choking it off is more expensive than letting it die on the vine. What management has decided is to turn iMode into a shelf product with minimal investment. Today, it’s clear to practically everybody that iMode won’t survive Cellcom’s transition to 3G.
The bottom line is that Cellcom wasted millions of dollars and huge personnel resources on a product that was given no chance of succeeding. Consistency was never a Cellcom virtue, and iMode has become a key part of the company’s inconsistency.
Published by Globes [online] - www.globes.co.il - on January 26, 2006