Nokia in Japan: Keep a low profile for now?

Keitai Watch did a good coverage of Nokia’s event in Japan dedicated to the upcoming launch of FOMA NM705i handset model by NTT DoCoMo. The event also included a press conference with Nokia Japan CEO Tyler McGee. First, let’s start with the phone and then a couple of thoughts about Mr. McGee’s answers to the press.

FOMA NM705i – let others tailor their handsets for Japanese market?
The NM705i is a typical mass-market Nokia candy bar and that is what makes it interesting in terms of how Nokia intends to position it in the market dominated by smartphones featuring built-in TV tuners and credit cards. According to Nokia, the key concepts they are promoting are style and design, which turn the handset into an accessory by complementing person’s looks and feelings. They believe that young women in their 20-30s will find the NM705i appealing. Nokia mentions a sophisticated European design, global GSM/3G roaming, compact size, original interface of home screen, and pre-installed Japanese-English dictionary as other points that should differentiate this device in Japan. At the same time the model misses (intentionally, I assume) some Japan-market only features such as a one-seg TV tuner, contactless payments chipset, full music download service, GPS, DoCoMo’s i-channel and others.

Nokia's press conference
Video conferencing is one high-end feature that can be found on the NM705i and this is very illustrative of Nokia’s strategy. I’ll explain why later. According to Keitai Watch, Nokia CEO was also asked a question about one-seg and mobile wallet, the features missing from Nokia’s Japan bound phones. In Nokia’s opinion these features are getting popular but their take up is not big enough for Nokia to add them to Nokia’s products, but Nokia doesn’t rule out the possibility of using them in future as value-added features. I assume this means that Nokia doesn’t want to waste its resources to tailor its handsets to Japanese market’s specific needs. First of all, Japanese market is not significant for Nokia in terms of its yearly handset sales volume. Second, Nokia’s huge competitive advantage is economies of scale through the unification of feature sets for each handset product segment. None of other global markets require one-seg tuners or contactless chipsets at this time except Japan. Nokia is not going to change its production lines to manufacture one-seg phones for Japan only. However, once a particular feature like video conferencing gets a widespread uptake, Nokia will use its economies of scale to incorporate this feature into its phones and ship them globally. As the contactless payments-based mobile wallet feature gets its portion of attention worldwide, Japanese users can hope to purchase Nokia’s own mobile wallet phones.

In conclusion, there are still some opportunities for Nokia to expand its market share in Japan without adding technological advancements to its phones. The Japan market is going through some changes such as reducing its dependency on carriers’ handset subsidies and warming up to the idea of sales of unlock phones. These changes should play out nice for Nokia as its economies of handset production will allow introducing a variety of mobile phones at lower prices. However, before that happens I expect Nokia to continue keeping a comparatively small presence in the Japanese market.

Source: Keitai Watch

Nokia NM705i Specs
Model:	NM7059
Carrier:	NTT DoCoMo
Maker:	Nokia
Price:	N/A
Form factor:	Candy bar
Color variations:	Orange, Black, White
Weight:	89g
Dimensions:	105 X 46 X 15mm
Main display:	QVGA, 2" (320X240) TFT
Talk time:	144min (3G), 186min (GSM)
Standby time:	216 hours (3G/GSM)
Platform / OS:	N/A
Memory:	47MB
Memory card slot:	MicroSD card up to 4GB
GPS / Location:	No
Bluetooth:	Yes (ver. 2.0)
Infrared:	No
USB:	Yes (mini USB)
Wi-Fi:	No
Main camera:	2.0MP
Video calling:	Yes
One-seg TV:	No
Music player:	Yes (MP3, M4A, eAAC+, WMA)
Browser:	Not a full browser
FM radio:	Yes
Mobile Wallet:	No
QR-code:	No
Biometrics:	No