In an environment in which many companies are participating in the business of i-mode mobile phone Internet access services and competition is intensifying, the myth that any participating firm can make big profits is gradually being undermined. Nevertheless, some companies are making effective use of the i-mode service for electronic-commerce transactions and marketing, producing substantial results.

Such firms are (1) introducing highly effective e-mail advertising for cellular phone handsets, (2) using the i-mode service in combination with printed media to make up for a cellular phone's inability to provide sufficient information to users because of its small display, and (3) devising other ways to take full advantage of the service. Winners in cyberspace such as Yahoo Japan Corp. and Rakuten Inc. have also started to develop major services for cellular phones.

The most successful companies are making all kinds of efforts. Some companies use e-mail as a tool for "instant sales." Such e-mail is designed to promote impulse buying among users with attractive information, making use of a cellular e-phone mail's capability to reach a user wherever they are. Sales of the cellular phone version of "Rakuten Ichiba" service provided by Rakuten, an operator of a Web-based shopping mall, recorded about 70 million yen in December 2000. The figure is about 2 percent of its total monthly sales of 3.54 billion yen.

E-mail advertising sent to cellular phones has contributed to the increased sales. Takashi Yoshida, chief producer of Rakuten, said: "As soon as we send promotional e-mail to cellular phone handsets, we start receiving many orders. However, such sales end just a few days after the e-mail is delivered." In a bid to enhance the effect of such "instantaneous sales," Rakuten provides timely information on its feature pages to explore more demand.

Tsutaya Online Corp., a major rental video company, also focuses on e-mail advertising. According to the firm's survey on user responses to its e-mail advertising, about half of those who clicked on the ad took action within three hours after the e-mail's delivery. About 80 percent reacted to the e-mail within a half day. These results show how promptly users respond to e-mail advertising.

Many companies have started to use printed media to make up for cellular phone's shortcoming -- the small display. For example, Senshukai Co., Ltd., a mail-order house, offers Senshukai Bellne, a shopping service compatible with the i-mode service. Users of the Bellne service can order products shown on a printed catalog from a cellular phone by entering the order numbers for each item in the catalog. About 90 percent of users registered with the service are in their 20s and 30s, just like those registered with its earlier Web-based shopping service. However, the mail order house discovered that more than 80 percent of the users of the Web-based shopping service order only from their cellular phone. This means that, with the i-mode service, the company was able to successfully win young female users who are unfamiliar with personal computers.

In the near future, i-mode services are likely to go through some changes in quality and gain a greater variety of users. Yuichi Washida, research director at Hakuhodo Institute of Life and Living, says that the middle-aged and the elderly also can be targets for the future i-mode contents service. The survey by the research institute finds that the number of women users of Internet-capable cellular phones in their 30s and 40s is rising. However, only 9.6 percent of them actually access the Internet. "This is because few services are designed for such age brackets, however, the potential market is huge," Washida explained.

Some content providers may look to unexplored markets with potential growth. One such market is the i-Appli service to deliver Java programs and other content that introduce leading-edge technologies. NTT DoCoMo released i-mode cellular phone models compatible with Java programs on Jan. 26, 2001, and sold 200,000 units in thee days. Java-enabled models are expected to be a mainstream and create a huge market.

Industry observers also anticipate new services that link a cellular phone terminal and another Internet terminal. By the end of this year, all makers of car navigation systems plan to release car navigation systems compatible with the i-mode service. Increment P Corp., a provider of map content, is offering a town information database for the i-mode service, which can link to car navigation systems.

Also, NTT DoCoMo is showing an interest in linking its i-mode service with other Internet terminals. In December 2000, DoCoMo made AOL Japan Inc. (the current DoCoMo AOL Inc.), an Internet connection provider, its subsidiary. It plans to provide in the future AOL Instant Messenger service, in which PC users can chat with i-mode users.