Figure 2-2-1-8 Summary of Figure 2-2-1-6 and Figure 2-2-1-7 shown in bar chart

(Source) MIC "Research and Survey on International Comparison and Trends in Information and Telecom Industries and Services" (2012)

layer and the upper layer (contents/application layer and platform layer) are significant and worth watching in the global market.

The comparison of Japan’s market with that of the US shows the following: the US market size is twice that of Japan; while in Japan, the network layer occupies more than half of the entire industry, in the U.S., it is the terminal layer that occupies more than half of the entire industry, and the size of the upper layer is larger than that of the network layer; in terms of growth rate, while the upper layer's growth rate is generally high in both countries, in the US market, the growth rate of the network layer and the terminal layer is high.

Figure 2-2-1-8 shows the market size, the share of each layer, and the predicted growth rate of each layer of the Internet-related industries. The figure indicates that, in terms of growth-rate-prediction, the upper layer shows the highest in every region.

### 2. Coming Competitions among ICT Business Eco-system and Overview

Smartphones are a driver of competition and growth and also a potential transformer of the present mobile industries through the platforms that will be prepared by network business players. Recently, the term “Ecosystem” — an analogy to the ecosystem of the natural world — is frequently used to express the growth dynamics in the ICT industries involving the complimentary goods and services such as applications provided by a variety of the by-players, in addition to network services and terminals. As shown in the popularity of the term, the growth of the ICT industry is widely researched and analyzed from the standpoint of the concept of an ecosystem, in such a way that, as the industry moves toward inter-ecosystem competition, as the common foundation, platforms (for example, OS or application-stores for smartphones) will come to play a key role in each of the ecosystem competition strategies.

## (1) Competition among ICT business eco-systems

Conventionally in Japan, goods and services have been provided through two different and co-existing structures on the Internet: the “Separated-by-layer-boundary” type such as PC-Internet, and the “Carrier-controlled-vertical-integration” type such as the conventional mobile Internet. However, the spread of smartphones is leading to the creation of a variety of structures (Figure 2-2-2-1).

Apple, which has conventionally been doing businesses on a proprietary foundation and reportedly generating earnings mainly through terminal sales, is seeking for the quality improvement of over-all user-service through the operation of platforms for contents or applications (see iTunes or App Store).

Google, which has reportedly generated earnings mainly through selling Internet advertisements around their search system, is seeking, through supplying Android OS to mobile terminal manufacturers, to increase access to their search system from the terminals equipped with their OS and to increase their earnings coming from their application store. The other players are seeking to build their own ecosystems; in many cases, they are seeking ecosystems which will give them profits through supplying their OS or through providing ID registration service or charging-system services in their application store. On the other hand, as shown in the trend in the Internet connection-method in which both the 3G network or Wi-Fi are available, the simple classification of business formations into vertical inte-