Western handset vendors turn Japanese
3gnewsroom.com
date: April 20, 2001 - source by:
telecomasia.net
With the pending launch of the world?s first 3G mobile
network in Tokyo next month, it seems the whole
wireless industry is turning slowly Japanese. That's good
news for struggling handset makers, but perhaps an
ominous sign for market leader, Nokia.
In several recent reports, Ericsson, Motorola and Agere
Systems, the microprocessor specialist spun off from
Lucent Technologies, are rumored to be positioning
themselves as partners of Japanese handset makers.
Ericsson has confirmed its talks to merge its loss-making
handset division with Japanese electronics giant Sony
Corp. The move has been seen as a lifeline to the
Swedish vendor?s handset activities, which lost $1.58
billion last year and is projected to lose another $700
million in the first quarter of 2001.
Another rumor pits Motorola with another major Japanese
company, Mitsubishi. The initial report by Nihon Keizai
Shimbun says that the companies were planning to
launch a handset joint venture to develop next
generation handsets. While Mitsubishi and Motorola have
denied the report, Mitsubishi has confirmed earlier talks
on the same topic.
Yet another report suggest that NEC Corp. is in the last
stages of securing a partnership with chipmakers, Agere
Systems, as well as possibly Texas Instruments and Intel,
also to develop next generation handsets.
The only notably names in the handset sector left out of
the rumor mill are Nokia and Panasonic, and, to a lesser
extent, Samsung and Siemens.
While Nokia is still considered by far to be the leader in
the handset market, with close to 30% of the worldwide
market last year, there is a clear indication that Asian
handset manufacturers, with their strong electronics
background, access to much needed components and
their proximity to global 3G leader NTT DoCoMo, now
represent a significant threat.
With both Ericsson and Motorola in the red, it comes as
no surprise that they are turning to their Japanese
counterparts for help. Already, both Ericsson and
Motorola have given up making their own phones,
electing to outsource most of their manufacturing
processes to low-cost centers like Taiwan and Mexico.
The partnerships between Western and Japanese firms
could pose a serious challenge to Nokia?s throne,
simply because they combine the technology innovation
of the Japanese market with the global infrastructure and
logistics support of the Western players. This way,
someone like Sony, who has so far concentrated most of
its efforts on the domestic Japanese market, can design
the phones with the latest technology and then leverage
Ericsson?s global distribution channels to sell them
overseas.
In addition, Asian carriers are expected to get a head
start on their European rivals because they did not pay
billions of dollars for their spectrum. Together, licensees
in the UK and Germany paid in excess of $80 billion for
their 3G licenses, compared with the combined total of
less than $3 billion from three of the region?s biggest
cellular markets ? Australia ($570 million), Korea ($2
billion) and Japan (free).
"The low 3G licensing cost will benefit cellular operators
in Asia-Pacific," said Evelyn Goh, analyst at Gartner
Group. This would free up capital resources for the
region?s carriers to roll out their networks and services. |
