3G handsets: Japan will invade Europe
3gnewsroom.com
date: 29 March 2001, source by: Commentwire
Unlike their Western rivals, the Japanese manufacturers
NEC and Matsushita, followed closely by Mitsubishi, are
reasserting their technological advance in 3G. This will
give them a significant competitive advantage not only
in Japan but also in Europe, constituting a serious threat
to European handset manufacturers' revenue prospects.
It emerged last week that of the eleven handset
manufacturers who have signed contracts with the
Japanese mobile operator NTT DoCoMo for its 3G
launch this May, only two will be ready on time - the
Japanese manufacturers NEC and Matsushita.
The mobile phone shortage won't hit DoCoMo too hard,
as it only expects 150,000 people to sign up for 3G in
the first year. But it is serious for the manufacturers who
failed to meet the deadline. Their problem is that 3G
handsets are extremely complex, requiring expertise in
areas such as chipsets and memories, radio interface,
displays and power consumption. But most important is
the sophisticated software, which needs to be tested
and debugged.
Still, NEC and Matsushita have managed to get round
the difficulties, while Mitsubishi and Fujitsu aren't far
behind. It's not hard to see why. Japanese electronic
devices have many of the same characteristics as 3G, in
terms of miniaturization, power consumption, modern
design, weight and integration of different electronic
functions. Also, Japanese manufacturers have made
substantial efforts in R&D. Matsushita has been working
on 3G technology for nearly seven years, spending
around $42-50 million a year and devoting around 1,000
people to the project.
As a result, the Japanese will have a considerable
competitive advantage. In Japan, Panasonic, NEC and
Mitsubishi already have 60% of the market. Their head
start in 3G will make it still harder for Europeans to get a
look in.
The Japanese firms are also well placed in Europe.
Complying with different European radio protocols will
not be a major issue. And they will gain a serious
competitive advantage if they are the first to offer 3G
phones. They might also gain early support in phone
subsidies from European operators, who will need to
offer handsets as soon as possible to recoup the huge
cost of licenses and infrastructure. European
manufacturers will have a tough time in the 3G market. |
