The project risked miserable failure on account of targeting an unproven market.
The decision on third party content was made in part to simplify the business model. However, NTT was then reliant on having willing third party suppliers that were able to deliver the content that would attract their audience. It was unknown at the time whether they could -- the result could have been failure.
There is always a risk in using inferior technology standards. The target market could turn its back on inferior technology. Worse, a competitor could find a way to achieve the same performance as NTT, but with superior technology. Content providers could have been less hesitant that anticipated with regard to implementing WAP, opening the door for a competitor to crush NTT.
There were two major risks with respect to the hardware. The first is that that manufacturers refused to meet NTT's specs. The result would have been products that NTT did not envision. Alternately, manufacturers may not have been able to deliver on NTT's specs. This could have delayed the project or forced NTT to accept inferior products. Remember that that size and pricing of the i-mode were built into those specs, and...
De-emphasizing the i-mode brand could have opened the door for competitors to deliver the same service offering, but build a higher degree of brand recognition and loyalty. NTT took a major risk in focusing its advertising efforts around the content -- it only had some control over content quality and consumers could easily have become disappointed.
The pricing strategy was perhaps the most risky. There were two major risks with the i-mode pricing. The first is that the price point conveyed an image of an inferior product. With technology, high prices can sometimes connote prestige and quality while low prices indicate products that are cheap and disposable. Giving off this image was risky for NTT, as it is not generally favorable. Another major risk to the pricing strategy is that NTT may not do enough volume to generate enough revenue to cover fixed costs. Additionally, by barely pricing above the cost of goods sold, NTT ran the risk of increasing COGS, which would have compromised the contribution margin or forced it to abandon its low-price strategy.
