Japan Inc. re-enters Mobile Wireless: Sony Corp, Matsushita (Panasonic), NEC and NTT are launching new U.S. phones.
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Japan Cell Phone Makers Draw Up New U.S. Strategies
The Nikkei Industrial Daily Monday edition
April 25, 2000
Nikkei English News via NewsEdge Corporation : TOKYO (Nikkei)--Japan's cell phone manufacturers are revising their strategies for the U.S. market. Until last year, a number of producers were forced to curb their U.S. presence, including Sony Corp. (6758) which withdrew. But now that the standardization of digital cell phones has been completed in the country, they are now focusing efforts on next-generation models.
Matsushita Communication Industrial Co. (6781) virtually ceased analog mobile phone operations in the U.S. in 1996, as the company was unable to carve out a market share in the face of strong rivals, such as Motorola Inc. of the U.S. and Finland's Nokia Corp. The failure was blamed mainly on the lack of sufficient marketing channels and high production costs.
Matsushita Communication, however, has recently succeeded in forming a partnership with AT&T Corp. In July, the Japanese company will begin shipping cell phones featuring TDMA (Time Division Multiple Access) technology, one of the current U.S. standards, in the country. It has also decided to set up production facilitates in either Mexico or Brazil.
Japanese manufacturers are renowned for their ability to develop products. "The full-fledged entry of Japanese makers into the global market, with their advanced technologies, may pose a serious threat to us," says Kurt Hellstrom, president of the world's largest communication equipment maker LM Ericsson.
Next-generation mobile phone services are slated to start in Japan next year, while they are unlikely to begin in the U.S. before 2005 at the earliest. Japanese makers should pave the way for establishing sales channels in the U.S. now, as the world's mobile phone market is likely to be unified under a single standard in future.
NEC Corp. (6701), however, is taking a cautious approach to the American market, although the company was once ranked one of the top three analog cell phone makers there.
This spring, the firm started shipping dual-mode mobile phones in the U.S. and Mexico. A combined total of 150,000 units a month will be supplied to Mexico's largest telecommunications company Telcel and U.S. companies, such as AT&T. "Monthly shipments of less than 200,000 units cannot be regarded as full-scale entry. But it is important to maintain ties with U.S. telecoms companies for now," says Tsutomu Nakamura, deputy director of NEC's mobile terminal operations.
NEC also plans to focus on developing next-generation phone models. The major high-tech company has been selected as one of the suppliers of the new phones, which will be developed jointly with NTT DoCoMo Inc.
Sales of cell phones are forecast to exceed 1 billion units worldwide as early as 2003. In Japan, almost one in every two persons owns a mobile phone, compared with the U.S., which is considered one of the most promising markets, since only 30% of its population has a cell phone.
Japanese manufacturers have learnt the lessons of past mistakes and are now drawing up new strategies.
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