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To: Caxton Rhodes who wrote (9349)	3/31/2001 2:15:05 PM
From: Caxton Rhodes	Respond to of 197227

Mitsubishi Electric misses handset sales target in 2000/01 By Eriko Amaha, Reuters 30 March 2001 Japan's third-ranked maker of mobile phone handsets, Mitsubishi Electric Corp, said on Friday it failed to achieve a global sales targets for handsets in the year just ending. This was partly because of a delay in deployment of GPRS (General Packet Radio Service) systems in Europe, it said. Mitsubishi Senior Vice President Michio Nakanishi estimated it has sold 18.5 million units in the global handsets market in the year to March 31, compared with its target of 27 million. In particular, sales in Europe and the United States fell well short of expectations. European sales were nine million against a target of 16 million, and U.S. sales reached just half of the targeted four million. Nakanishi said the poor performance was partly due to a delay in GPRS packet systems, which were originally expected to be launched last October. The systems maximise use of radio channels and allow many users to access a network at the same time. "The market shrank quite a bit from the latter half of 2000," he said. For the business year beginning on April 1, Mitsubishi aims to sell a total of 28.2 million units in the global market. Of those, it wants to sell 16 million in Europe, where it uses the brand name "Trium" and has a market share of about seven percent. It set a less ambitious target of 2.5 million for the U.S. market for the year to March 2002. Nakanishi said GPRS packet systems are expected to be up and running by the autumn in Europe, which would help Mitsubishi to achieve its goals. He said all handsets sold in Europe in the next business year will be GPRS-compatible and the company will begin offering colour-screen handsets in the July-September period. Japan was the only market where Mitsubishi attained its sales target of seven million this business year, and aims to sell 8.5 million there in the next business year. Alliances still in view Mitsubishi has said it may seek alliances with other handset makers to boost its research and development efforts to meet vendors' demands, although it has given no details. Nakanishi said: "The key is to meet each vendor's demand and create products and deliver them at the right time." Mitsubishi was one of the first Japanese handset makers to venture overseas, but now faces competition from Japanese peers. These include Matsushita Communication Industrial Co Ltd (MCI) and NEC Corp, Japan's biggest cell phone maker, which are gearing up for overseas expansion, especially in Europe. MCI said it aims to boost its global market share to 10 percent by 2003 from the current six percent. But Nakanishi said unlike the Japanese market, where consumers are willing to pay for high-end mobile phones and thus the replacement cycle is relatively short, European markets are tough to crack for Japanese handsets makers. "Operators won't buy expensive handsets because they earn money on transmission time," Nakanishi said. He also pointed to a difference between Japanese and European consumers. "I don't think downloading pictures or music will be popular. They have a different culture," he said. "Rather, what is needed is to enhance email functions." Nakanishi said the company will continue to sell low-end products such as pre-paid handsets to establish Mitsubishi's brand name in Europe, and then will begin offering more feature-rich products. © 1999 Reuters Limited. All rights reserved.