*Update 2-7-2009* It appears iPhone Software 2.2.1 broke this method of adding emoji to the iPhone. Alternative methods are the apps Typing Genius – Get Emoji and Touch Dial Emoji.
—-
Emoji are cute little Japanese icons that can be sent in SMS text messages. They will appear to the receiver of the message if their phone is an iPhone with 2.2 software, or if their phone has support for emoji.
Up to this point, only users in Japan had access to them on the iPhone (that is, if you didn’t want to hack your iPhone). Now, if you download a $0.99 app called frostyplace, you too can add emoji to your iPhone. Here are step-by-step instructions:
How to Activate Emoji on iPhone
1. Download Frostyplace for 99 cents from the iTunes app store.
2. Launch the frostyplace app.
3. Tap two or three stories (it doesn’t matter which). They will be in Japanese:

4. Tap the second icon on the bottom right of the app. Then tap on two or three stories (again, doesn’t matter which):
5. Close the app.
6. Open the iPhone Settings.

7. Tap General:

8. Scroll down and tap Keyboard:

9. Tap International Keyboards at the bottom of the screen:

10. Scroll down and tap Japanese:

11. Slide the Emoji tab to On:

And that’s it. To use the emoji, open the SMS app and hit the Globe icon at the bottom of the screen:

Note that there are 6 tabs for 6 sets of emoji, but there are multiple pages of icons for each set of emoji. Drag your finger right to left to view them all.
