Is the Handset War Over Already?
Thursday December 7 4:23 PM ET
dailynews.yahoo.com
HONG KONG (Reuters) - As wireless manufacturers and equipment makers from around the world try to outdo each other at a huge telecommunications conference being held here this week, Japan is silently stealing the show with its handsets.
``Everyone else here is showing plastic prototypes in displays, but we are the only ones with working models,'' says Takeshi Natsuno, one of the main architects of NTT DoCoMo (news - web sites) Inc's (9437.T) hugely successful 'i-mode' Internet system for mobile phones, which have more than 14 million users browsing the web on business card-sized screens.
In his hand is a new blue and silver 503 series i-mode cell phone built by Sony Corp (6758.T) set to go on sale next month.
The folding phone is Java-enabled and comes with a TFT (thin film transistor) color display, the brightest on the market.
Manufacturers of handsets -- also called mobile phones, cell phones, handyphones -- are lining up to wage a battle over a share of the next growth market, identified as third-generation, or 3G, services that will send and receive data over airwaves at speeds capable of delivering video and CD-quality sound.
NEC Corp (6701.T) has developed a 3G handheld phone that will go on sale when DoCoMo begins broadband mobile Internet services over its WCDMA (news - web sites) (Wideband Code Division Multimple Access) standard next May, the first company to do so.
By contrast, Motorola Inc (NYSE:MOT - news) the world's second biggest cell phone maker after Nokia (NOK1V.HE) (NYSE:NOK - news) also has a working WCDMA prototype at the show, but it hasn't been scaled down yet and takes up four liters of space.
NEC, one of the main suppliers of current generation i-mode phones for DoCoMo, is confident the global pie for mobile handsets is about to be carved up in its favor.
``This is a great chance,'' said Hideyuki Tsunoda, general manager of NEC's handset division, as he looks over to DoCoMo's exhibition next door.
Tsunoda says NEC will aggressively market its cell phones in Europe as DoCoMo pushes into the market with partner KPN Telecom (KPN.AS). I-mode services are set to begin in Europe next year ahead of 3G services at a later stage.
North American i-mode services are just a step behind, but are now possible through the recent $9.8 billion alliance between NTT DoCoMo and AT&T Wireless Group (NYSE:AWE - news).
The 3g Race
Other Japanese cell phone manufacturers are close behind.
Matsushita Electric Industrial Co Ltd (6752.T), which operates the Panasonic brand, has indicated it will beef up research, development, and manufacturing of cell phones in Britain.
Sanyo Electric Co (6764.T) also makes cell phones and key components such as batteries, an area where it leads. Fujitsu Ltd (6702.T) makes phones and the infrastructure such as the stationary equipment that communicates with cell phones over airwaves.
A DoCoMo employee demonstrates new Java-enabled phones, which offer more interactive content thanks to the flexible Internet Java language.
On an i-mode Web-based fishing game -- entertainment sites are the most popular -- the phone vibrates when a fish catches the hook, and is ready to be reeled in through the jog-shuttle dial.
Such functionality, analysts say, is still beyond the reach of the other big global names in mobile phone manufacturing.
Unless Sweden's Ericsson (LMEb.ST), France's Alcatel (CGEP.PA) and Dutch group Philips (PHG.AS) tie up with their technologically advanced counterparts, Europe's manufacturers will be left behind, analysts warn.
There may be a way out. Sun Microsystems Inc's (NasdaqNM:SUNW - news) Java system will be compatible on any operating system for handsets -- which virtually act as mini-computers these days.
``It can be deployed on any type of environment,'' said Nicholas Lorain, senior product manager of the wireless division. ``Handset manufacturers like Java.''
The other hurdle is hardware technology.
No new Japanese-European tie-ups were announced at Hong Kong's International Telecommunications Union conference, although there was some expectation Alcatel would upgrade its infrastructure joint venture with Fujitsu, called Evolium, to include handsets. |
