Japanese vendors look for overseas expansion, this time for real...

I decided to write this post in a response to a very thoughtful analysis of 2010 handset vendor trends made by Tomi Ahonen on his Communities Dominate Brands blog. Among other vendors, Tomi lays out his expectations for Japanese vendors, especially citing Fujitsu as the world's fifth biggest smartphone maker. Thanks, Tomi ;) I am not going to touch here the very tricky subject of smartphone definition, but am just going to say that in Japan the most phones sold by domestic vendors, including Fujitsu are not considered to be smartphones. However, Tomi's post made me wonder when we can expect Japanese vendors compete on a worldwide scale. After several failed attempts in the past, this and next year will be crucial for Japanese vendors to launch internationally as the window of opportunity is quickly closing.

Gloom in domestic market

The Japan mobile phone market saw sequential decline in the third quarter of 2009, becoming the worst quarter in five years in terms of total handset shipments, according to IDC Japan. Mobile phone shipments totaled 7.32 million units, down 12.8% from a year earlier. Quarter-on-quarter growth remained negative for eight quarters in a row. The major showstoppers were:

• Lack of compelling high-end handsets
• Increased handset replacement cycle
• Excess inventories on operator side

To go global or not to go?

With such a pessimistic mood in their backyard, Japanese vendors face an invitable choice - to go global or die trying. Top five domestic mobile phone vendors by 3Q2009 (see chart above) - Sharp, Fujitsu, Panasonic, NEC and Kyocera are already selling phones in some markets outside Japan or planning to do so very soon. It doesn't mean everybody will succeed and I expect some market consolidation by the end of this year or earlier into the next year. Here is a summary of who done what and what to expect next.

Sharp

Sharp is the one to watch closely after as the company is rumored to be the manufacturer of the first "Microsoft" phone - a device based on Danger Hiptop/Sidekick platform acquired by Microsoft a couple of years ago. Sharp also plans to enter markets in Europe and North America after it tasted the waters in the nearby Asian markets including Taiwan and China. Sharp sold about 1.6 million devices abroad in 2008 and aims to boost that number to 4 million units by March 2010.

Fujitsu

Fujitsu made a modest enter into the Taiwan market, partnering with FET in January 2009. Last year, the company also joined Symbian Foundation reinforcing its support for Symbian OS domestically and utilizing the membership as an opportunity to broaden the Symbian appeal elsewhere. However, Fujitsu is not only focused on Symbian - the company is also known for manufacturing Windows Mobile handsets and it created the whole market niche in Japan with its very successful Raku-Raku lineup targetd at senior end-users. Obviously, I can't say anything beyond that but expect Fujitsu to make some headlines in future.

Panasonic

Panasonic is rumored to enter neighboring markets, with the main destination being China. There are some talks of Panasonic considering South American markets, especially Brazil where the similar with Japan's mobile TV standard is being adopted.

Toshiba

Backed by NTT DoCoMo, Toshiba added its first customer win in Europe in June 2009 by partnering with Spain's Telefonica. Having attracted industry's attention with the release of the TG01 - one of the thinnest Windows Mobile smartphones produced by ODM vendor for Toshiba, the company made a decision to outsource the manufacturing of phones out of Japan from October 2009.

NEC (NEC/Hitachi/Casio)

Having retreated from overseas markets in 2006, NEC is planning a comeback. First, it joined forces with two other players - Hitachi and Casio. As the leverage, the new company can utilize Casio's existing channel in the US. As you might've known, Casio found its niche in the US with a ruggedized and water resistant phone line bound for Verizon Wireless. Hitachi also rebranded its Wooo W53H keitai into the canU S1000 and shipped it to South Korea

Kyocera

Kyocera is an old-timer in the US market and now company also sells in Soth America as well. It got into Sprint's storefronts through the acquisition of another troubled Japanese vendor Sanyo. The prospects are still not clear for Kyocera overseas and domestically the picture is even worse.

Japanese vendors overseas
Kyocera	USA/Canada/Russia/India/Thai/Vietnam/New Zealand
Sharp	Europe/North America/China/Taiwan/Hong Kong
Toshiba	Europe/Asia
NEC-Hitachi-Casio	USA/South Korea
Fujitsu	Taiwan
Source:	M-Report

NEC, Casio and Hitachi in joint mobile phone development

Consolidation of Japan's mobile phone sector continues as three domestic handset manufacturers NEC, Casio and Hitachi have decided to jointly produce mobile phones. According to Nikkei, the newly created venture will start its operations from the beginning of next financial year in April 2010. NEC would take over the leadership with the 70.4% stake in the venture, which will be named NEC Casio Mobile Communications. In 2004 Casio and Hitachi have already merged their production units together to sustain in a highly competitive market. Other examples of market consolidation include the Kyocera and Sanyo marriage and exit of Mitsubishi in prior years. I expect the squeeze to continue and more consolidation to happen in the coming years.

Stakeholders of new venture
NEC	70.4%
Casio	20%
Hitachi	9.6%

Source: Nikkei

KDDI au ships Hitachi Woo mobile TV phone

Mobile phones with built-in one-seg TV tuner are driving replacement sales in Japan, making any self-respecting handset manufacturer release its version of mobile TV phone. Now that everybody does mobile TV phone, how are you supposed to differentiate your product from the bunch of others. Well, there are some ways to do so. First of all, you are in luck if your company is also in flat-screen TV business, because you can borrow its established brand and re-use it for mobile phones. As a result, we have Sony Ericsson Bravia, Sharp Aquos, and Panasonic Viera mobile TV phones attacking the market. Hitachi is not exception here as it also uses its TV brand Wooo to woo mobile phone customers. In order to make the appeal of Wooo handset stronger, Hitachi says they adopted the same graphic quality control technology Picture Master they are using in Wooo TV sets. Besides, the external design of the Wooo handset also borrows from the Cutting Edge Design concept used in Wooo TVs. To further differentiate itself Hitachi brings into play Wide QVGA organic light emitting display that complements handset’s slim body (14.2 mm) in a very cool way. Not to mention handset’s 2MP camera, contactless payment capability, GPS navigation and full HTML browser. KDDI au is shipping it this week at unknown price under the Wooo W53H model name. I can only say, “Wow Wooo!”

Phone Specs
Model:	Wooo W53H
Carrier:	KDDI au
Maker:	Hitachi
Price:	N/A
Form factor:	Clam/Swivel
Color variations:	Black, White, Purple
Weight:	131 g
Dimensions:	51 X 107 X 14.2 mm
Main display:	2.8 inch WQVGA (240 X 400 pixels) OLED
Talk time:	250 min
Standby time:	360 hours
Platform / OS:	N/A
Memory:	100MB shared with BREW folder
Memory card slot:	microSD card
GPS / Location:	Yes (EZ Navi Walk - Voice input 3D navi)
Bluetooth:	No
Infrared:	Yes
USB:	N/A
Wi-Fi:	No
Camera:	2MP
Video calling:	No
One-seg TV:	Yes
Music player:	Yes (Lismo, SD Audio)
Browser:	Full HTML
FM radio:	No
Mobile Wallet:	Yes (EZ FeliCa, QUICKPay)
QR-code:	Yes
Biometrics:	No

Source: KDDI au

Casio Hitachi to make inroads into US market

Credit: PhoneScoop.com

First news about Casio’s intentions to enter the US market appeared in November last year. It turns out that it was true. According to Phonescoop.com, the FCC approved the G’zOne handset model, with Verizon Wireless brand mentioned in the FCC documentation. The G’zOne is a ruggedized, water-resistant handset, first shipped to KDDI in May 2005. After more than warm reception of the G’zOne by Japanese users, the company brought it to Korea in December last year and enjoyed high-level sales. Riding on success of their G'zOne, Casio Hitachi worked with Verizon to optimize the handset for the use on Verizon’s high-speed 3G EV-DO network. It can take a couple of months before the handset hits Verizon store shelves.

Casio and Hitachi joined their forces in 2004 and they are relatively small handset vendors, being outside of top-five domestic handset manufacturers. Merging was their only option to sustain and it looks like they are doing fine by expanding their presence beyond Japan.