Japan Apple Pay Launch Week Analysis

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Tim Cook’s Keynote slide at the October 27 event were he mentioned the Apple Pay and Transit launch in Japan.

It was an interesting week, starting early October 25 with the iOS 10.1 update which rolled out Apple Pay and Transit services for Japan. The next day was 4Q financials day followed by the new MacBook event on October 27.

The Launch
The first few hours of the Apple Pay rollout was fascinating, especially the ebb and flow, and palpable excitement of Japanese iPhone users on Twitter.

  • 2:30 am (Japan time): First there was the actual iOS 10.1 update drop which took up to an hour to download and install from Apple’s stressed out servers.
  • 3:30 am ~ 5 am: Lots of users tweeted Apple Pay wasn’t showing up even after the update. The lucky ones who did see Apple Pay showing up in Wallet could not load Suica successfully but got a nice message from the JR East servers: Suica Apple Pay will be operational at 5 am.
  • 5 am: Suica Apple Pay went live at the promised time and Twitter was flooded with Japanese “I got Suica loaded in Apple Pay!” comments.

JR East and Apple should have been paying attention because all those excited and tweeting Japanese  iPhone 7 users got ready for work and hit the road on their daily commuter transit rush. Only this time with Suica Apple Pay loaded on their iPhone 7 phones.

The result: around 7 am the JR East Mobile Suica servers, the part of Suica which processes smartphone/feature phone transactions, went down under a deluge of traffic 10 times the normal amount. Apple Pay iCloud servers also jammed up making it difficult to load any new card into Apple Pay.

The Press
Most of the press reported the event like they usually do: “Apple servers fall down again, they just can’t do cloud stuff.” Grabbing page views by making fun of Apple is standard practice but not real reporting, let alone analysis.

The only English language journalist who got even close to what was going on was Johnny Evans It looks like Apple Pay is already really big in Japan. Evans actually took the trouble of asking a Bloomberg journalist who said, “It’s a shame that systems went down, but it shows just how much user interest there is.” As the Showa Emperor used to say, “Is that so?”

The Reality
If you paid attention there was a lot more interesting stuff going on that pointed to how big the Japan Apple Pay launch was, not just for Apple but also for Japanese companies. For starters, Tim Cook mentioned the Japan Apple Pay launch twice during the week.

The first was during the 4Q financial conference call. Tim said that Apple Pay had grown 500% and that September transaction volume alone was larger than the rest of the financial year. He then mentioned the Apple Pay Japan launch which was just in the first 24 hours of operation. The mention may only have been standard financial PR but it felt like Tim was preparing us for something much bigger… something much bigger after the first full quarter of Apple Pay Japan operations.

The second mention was during Tim’s iOS 10 update section at the MacBook event. He devoted two Keynotes slides, one to Apple Pay, one to the Japan Transit service launch and mentioned “everyday there’s over 160 million contactless transactions” made in Japan. He also promoted the Apple Pay – Japan Transit integration as “the best and easiest way to get around in Japan.”

The Smart Money
Anybody paying close attention to the Japanese market noticed that the stock of a Japanese FeliCa transaction processing company, Flight Holdings Inc. (TYO:3753), started gaining traction in August. This was just about the time that Japanese smartphone journalist Tsutsumu Ishikawa broke the Apple Pay – JR East story. Flight Holdings reached one peak on October 25, the Apple Pay Japan launch day. There was also an interesting under the radar PR blurb on October 28 announcing IBM Japan/ Rambus Bell support for Japanese banks integrating Apple Pay.

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Flight Holdings Inc. (TYO:3753) chart November 14~18.

Japanese investor Yujiro Hayami for one, says the Apple Pay Japan story has only just started and will play out in interesting ways, not only for Apple but for Japanese companies that provide FeliCa infrastructure support.

The most interesting question however is this: Apple made a big bet on FeliCa technology and Apple only makes a big bet on things that take years to play out. What’s the long term?

For Japan the Apple Pay launch is the “a-ha” inflection point when many disparate parts suddenly come together and shine, but it would be short-sighted to assume that Apple’s FeliCa bet is only for the Japanese market.

 

 

Riding The Suica Apple Pay Escalator

Inside JR Akihabara Station Central Entrance

JR East has spent a wad of money to promote Suica Apple Pay in select Tokyo area JR stations. If you live in Tokyo go to Akihabara JR station through the central entrance (across the street from Yodobashi Camera, I think).

You will be greeted by a huge Suica Apple Pay poster leading towards the Yamanote line escalator. Ride the escalator and you will be treated to some marvelous Suica Apple Pay launch campaign signage. The handrails, the walls are all Suica Apple Pay green. Here is a video clip.

The catchphrase is “sui-sui”, the Japanese equivalent of easy-peasy, a play on the similar sounding Suica: loading Suica into Apple Pay is ‘sui-sui’, purchases with Suica Apple Pay is ‘sui-sui’, and so on.

Photos and videos do not accurately capture the Suica green. It seems to be slightly different from the Yamanote green, eye catching but not gaudy. A strangly envigorating, yet relaxing green, almost like fresh spring foliage.

I wonder, did JR East have those Suica Apple Pay escalator hand belts made special? Are they decals, who makes them and how are they applied? What will they do with it all when the marketing campaign is over? So many questions…

Update: I finally remembered why the Suica green seemed so familiar: it is the color of fresh green tea leaves in the spring before the first harvest. I used to live in Shizuoka and helped pick tea at a tea farm of a good friend. At the time I worked at a local printing company and the color correction we had to do for local tea shop posters advertising “first harvest tea” was a nightmare. It had to be exactly the color of Suica green.

Suica Apple Pay and Japan Transit Integration

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Taro Matsumura was kind enough to tweet a screenshot of Suica Apple Pay and Apple Maps Japan Transit in action on Apple Watch Series 2. If you have Suica loaded into Apple Pay and a transit route set in Apple Maps, the Suica in Wallet shows you in-transit status Wallet alerts you if your Suica SF (stored fare) is short and needs recharging. When you get off at the last station Wallet shows start~finish transit points and the total fare.

Suica Apple Pay and Japan Transit integration on iPhone 7 are covered in detail here. The Hacks for Creative Life! blog has a full overview of setting up and using Suica Apple Pay on Apple Watch Series 2.

Japan Apple Pay Launch Slams Apple iCloud And JR East Suica Servers – Update

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Japanese users vented their frustration on twitter this morning as iCloud servers strained under Apple Pay Japan launch day traffic. The Apple Japan iCloud status page showed that some users could not access Apple Pay. NHK also reported problems with JR East’s Mobile Suica system that experienced extremely heavy traffic. The JR East Suica support page (image below) acknowledged the unresponsive Mobile Suica server status and asked for customer patience.

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Apple Pay card loading was working smoothly early this morning in Japan but the servers bogged down during peak commuting hours.

Update: JR East says the 3.5 hour Mobile Suica outage was due to 10 times the normal server traffic load. Service was restored by 11 am, IT Media has the details. Japanese iPhone customers in Tokyo really want to use Suica Apple Pay. It says something about the size of the Japanese iPhone installed base if it can take down the JR East Mobile Suica system: a road hardened infrastructure built for massive scale.

On a lighter note, JR East has plastered JR stations with Suica Apple Pay posters. There must be a Suica Apple Pay Yamanote train running somewhere too. Here is what it looks like at JR Akihabara.

On a final note, with a launch this big, both for Apple and JR East, I predict Tim Cook will remark on it during the fourth quarter results conference call later today. It had to be Apple’s largest Apple Pay launch ever.

A Quick Look At The JR East Suica App

 

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(A full review of the Suica App is here)

JR East has released their Suica app on the Japan App store. Here is a quick look using screen shots from the app store product description. I`ll post better versions later.

The opening screen shows your Apple Pay loaded Suica cards (up to eight cards can be loaded) with reload payment options via your designated Apple Pay credit card. There is also a green Ticket Purchase/Suica Management button at the bottom

The Ticket Purchase/Suica Management screen shows your current transit pass (if you have one). The purchase options below are: green car seating, Shinkansen express tickets, and transit pass purchase. Below that are Suica purchase history, change card info and name card options.

The next two screen shots: Suica Details shows the Suica ID#, card balance, and transit pass details (if applicable). Suica Purchase allows you to create a new Suica on your iPhone 7 or Apple Watch Series 2 device.

The last two screenshots: Suica Account details on the left. The last screen is the message you get on older iPhones that do not support FeliCa NFC: “This iPhone does not support Apple Pay. Please pair this iPhone with an Apple Watch to use Apple Pay

iOS 10.1 Update Launches Apple Pay And Transit in Japan – Updated

Update 10/25 5 am Japan time: Apple Pay went online at 5am Japan time. Twitter users report successful Suica loading. I successfully loaded a JR East View Card on iPad Pro 9.7. If you are not seeing Apple Pay on your Apple Pay supported device after updating, try restarting the device.

iOS 10.1 had been released. As expected the update brings Apple Pay to:

  • iPhone 7 and 7 Plus devices sold in Japan for store, App and web purchasing
  • Suica transit and purchase support nationwide
  • Suica reloading with Apple Pay in Wallet and Transit Pass renewal

For Apple Pay information see the Apple Pay Q&A Intro.

iOS 10.1 also brings transit support to Maps for

  • Every major train, subway, ferry and national bus line. Local bus routes for Tokyo, Osaka and Nagoya.
  • Underground arcade and major station passageway mapping, transit transfer information based on station premise mapping
  • Transit fare route comparisons

For a Japan transit introduction see the review.