The Interview: Masanari Arai, CEO of Kii

3 Mar 2015

Masanari Arai, CEO of Kii

Nokia went from pioneering mobile phones to smartphone afterthought, with Apple mostly to blame. Former Nokia employee Masanari Arai, who is now CEO of mobile backend services provider Kii, elaborates.

Once consumers discovered a clean, straightforward process of purchasing content for smart devices, Nokia’s days were numbered.

When Apple originally announced the iPhone, which instigated what has now become a smartphone mega-industry, with a direct credit line from iTunes, the Finnish communications hardware company’s relevance began to vanish.

“Nokia was always very strong in its productrisation, cost management, inventory management, and channel management,” explains Masanari Arai, who served as country manager for Nokia Japan Enterprise System after the company had acquired Intellisync, a data software company for mobile phones.

Always in iTune’ with the customer

Arai claims Apple did something genius, with iTunes – which originated as an online shop for music, with regards iPods, before iPhones came along and helped drive the app craze we currently endure – “something that is very easy to understand for the end user.”

“Nokia could not establish that with their services (though they tried) and, as a result, Nokia became limited to becoming device providers instead of ecosystem providers. It is very difficult to survive in a battle against Apple.”

Arai now heads up Kii, a Japanese business that provides mobile backend services, something very prominent in this internet of yhings (IoT) age. A computer science master of Toyohashi University of Technology, Arai has worked for numerous major tech players in the past, including IBM back in the mid 1990s, Intellisync, Nokia and Synclore.

Now jumping between Japan and Silicon Valley every month – Kii has bases in both places – Arai’s view of Apple’s business model is that it is very simple, and very effective.

Follow the profit

The effectiveness should not be a surprise, of course, with the US tech giant nabbing 93pc of all smartphone profit in the fourth quarter of 2014 (79pc for the full year), but it’s still something that should be noted. Indeed Arai feels Apple simply release products at the perfect time for consumers, including just a couple of attractive functions, making for a market where they can charge more than their rivals, thus driving profits.

“When you look at Android devices,” explains Arai. “There are so many manufacturers and not many differences in their offerings. This positions all of these companies into a competitive price war, I have even seen these phones go for US$50. As a result of this situation, and the lack of marketing savvy, the profits will inevitably go to Apple.”

Indeed IoT is an area that greatly excites Arai. Platforms such as HomeKit, technologies like drones and accessories like wearables are shaping the immediate future, with the current envioronment barely scratching the surface of what is possibe and, indeed, inevitable.

There are underwater smartphones, for those who like to text and dive presumably, pieces of furniture that charge your devices, and a growing number of ways to buy things without worrying about handling cash.

So much more to come

Internet connectivity is spreading globally, speeds are improving by the month and with open source development (within reason) for apps and the likes, it’s understandbale that innovation is playing such a constant and immediate role in this phase of the information age.

Sensor technology and battery life advancements will help push us on from what Arai calls a “trial phase” in IoT. Successfully capitalising on innovation in these two particular areas will see everyday life altered entirely – “toothbrushes, combs, golf clubs, wearables, etc. [will] improve the life of the end user.”

Indeed sensor technology has played such a role in revolutionising activities as simple as jogging, hiking or cycling. There are wearable wristbands, smart pedals, GPS tracking footwear and even a weird sweat sensor that Kenzenware has developed.

“With all of the new technologies that are becoming available, companies can create some very interesting high-end, user-value services. In fact, we are working on that at Kii,” explains Arai.

City slickers

However an often underappreciated side of IoT is the industrial changes it will make, things like energy optimisation, transport efficiencies, architectural advancements etc.

Just look at India, where the state of Andhra Pradesh is set to smarten up, with Singapore enlisted to help create its new IT-focused capital city. The plans include the construction of ports, airports and utilities such as power, water, and sanitation.

However IoT in the immediate future does remain the domain of the wrist.

For all the drone advancements – which are frightening, from a political, freedom and social protection point of view – and smartphone and tablet connectivity announcements, it is the smart watch that has consumers drooling, thanks in particular to the soon-to-be-released Apple watch.

Watch as the world goes by

There are some who query the relevance of smartwatches, wondering what it is they do that a smartphone can’t. And, considering how rarely fans of such devices go out without them, what’s the benefit, need or relevance of having both? Arai, it seems, thinks they are mutually beneficial.

Continually in contact with users’ skin, in a highly sensitive part of the body that can yield significant biological readings when sensors are programmed correctly, smartwatches can gather much more information than a smartphone ever could. By connecting the two devices, users can take advantage of the ‘reading’ value offered by smartwatches and access the data gathered through their smartphones.

This all plays into the generally established ‘want’ of today’s consumer: Simple solutions for everyday, even menial, quibbles. 

“When you have innovative technologies that are functional, and don’t compromise battery life, usability, and quality [then] customers will respond with a high demand.”

Gordon Hunt was a journalist with Silicon Republic