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To: Joe Wagner who wrote (4720)	6/16/2003 10:39:54 AM
From: Joe Wagner	Read Replies (1) \| Respond to of 4808

OT-Japan Handset Makers Go Global with 3G, Photo Phones Sun Jun 15,10:48 PM ET By Kiyoshi Takenaka TOKYO (Reuters) - Japan's top cellphone makers, already powerhouses at home, are poised to become major players on the global stage, spurred on by the international appeal of camera phones and emerging third-generation services overseas. But industry giants such as Nokia (news - web sites) (NOK1V.HE) are not likely to lose much sleep over the foray by Japanese makers, who are expected to focus on high-end products, rather than offer a full-range of models. Still, their technological expertise in photo phones as well as 3G handsets that work on the W-CDMA (news - web sites) network will help Japanese manufacturers better compete in the hotly contested global cellphone market, analysts say. "Japanese manufacturers excel in just about every aspect of photo phones, from camera modules to liquid crystal display (LCD) panels," said Suguru Kagawa, researcher at Yano Research Institute. "For companies like NEC Corp (6701.T), Sharp Corp (6753.T) and Panasonic Mobile, now is a golden time to make a serious thrust into the global market." Panasonic Mobile Communications, a unit of Matsushita Electric Industrial Co Ltd (6752.T), is Japan's largest cellphone maker. But its global share of about three percent is dwarfed by Nokia's 35 percent. Japan's makers are betting that the rising popularity of photo phones overseas will provide them an opening. In the year to next March, NEC, Japan's second-largest handset maker, is targeting a 400 percent increase year-on-year in overseas cellphone shipments, while Panasonic Mobile is looking to bump its shipments to 10 million from six million. GLOBAL APPEAL Launched in November 2000, camera-equipped handsets took Japan by storm, with the top three operators -- NTT DoCoMo Inc (9437.T), KDDI Corp (9433.T) and J-Phone, a unit of Britain's Vodafone Group Plc (VOD.L) -- attracting more than 26 million users at the end of May, or about one in five people in Japan. Photo phones are also proving to have global appeal. Vodafone launched its flagship "Live!" camera phones in October and hit its target for one million users just over five months later. Also playing in their favor is the emergence of a 3G market overseas as foreign operators finally launch the service one-and-a-half years after its debut in Japan. The trump card for Japanese manufacturers is the technological lead they enjoy in the area. More than 90 percent of global demand for charge-coupled devices (CCD) is catered by the likes of Sharp, Matsushita and Sony Corp (news - web sites) (6758.T), all of which are handset makers. CCDs -- the "electronic film" in digital cameras -- are the key component of photo phones, which allow users to take and send pictures straight from the handset. When Hong Kong's Hutchison Whampoa (0013.HK) launched 3, Europe's first large-scale 3G service, early this year, it turned to NEC as well as U.S.-based Motorola Inc (NYSE:MOT - news), the world's second-largest cellphone maker, for 3G handsets. "Japanese makers already put out real, working 3G phones, and they've improved them with user feedback. That makes all the difference," said Hiroyuki Masuko, analyst at Daiwa Institute of Research. CLICKING SAMSUNG-STYLE Despite their advantage in camera phones and 3G handsets, Japanese makers are unlikely to pose an immediate threat to the dominance of cellphone titans such as Nokia and Motorola. "To be up there among the giants, you need to offer low-end phones for mass users," said Nahoko Mitsuyama, principal analyst at Gartner Japan. "With most Japanese makers focusing on middle- to high-end handsets with camera and data functions, I don't see them rushing up the rankings of handset vendors, although they are indeed gaining on their rivals." High production costs in Japan mean Japanese handset vendors must concentrate mainly on making advanced models, which carry higher profit margins than mass-produced models. As a result, Japan's cellphone manufacturers may not immediately reach the top rung of the ladder in the global arena. But South Korea (news - web sites)'s Samsung Electronics Co Ltd (05930.KS) may have the strategy for their Japanese counterparts to follow. "Samsung won a 10 percent market share by aggressively promoting home-grown high-end models to the rest of the world," Daiwa's Masuko said. "What Japanese vendors are striving for is a Samsung-style growth pattern." story.news.yahoo.com