Japanese vendors look for overseas expansion, this time for real...

I decided to write this post in a response to a very thoughtful analysis of 2010 handset vendor trends made by Tomi Ahonen on his Communities Dominate Brands blog. Among other vendors, Tomi lays out his expectations for Japanese vendors, especially citing Fujitsu as the world's fifth biggest smartphone maker. Thanks, Tomi ;) I am not going to touch here the very tricky subject of smartphone definition, but am just going to say that in Japan the most phones sold by domestic vendors, including Fujitsu are not considered to be smartphones. However, Tomi's post made me wonder when we can expect Japanese vendors compete on a worldwide scale. After several failed attempts in the past, this and next year will be crucial for Japanese vendors to launch internationally as the window of opportunity is quickly closing.

Gloom in domestic market

The Japan mobile phone market saw sequential decline in the third quarter of 2009, becoming the worst quarter in five years in terms of total handset shipments, according to IDC Japan. Mobile phone shipments totaled 7.32 million units, down 12.8% from a year earlier. Quarter-on-quarter growth remained negative for eight quarters in a row. The major showstoppers were:

• Lack of compelling high-end handsets
• Increased handset replacement cycle
• Excess inventories on operator side

To go global or not to go?

With such a pessimistic mood in their backyard, Japanese vendors face an invitable choice - to go global or die trying. Top five domestic mobile phone vendors by 3Q2009 (see chart above) - Sharp, Fujitsu, Panasonic, NEC and Kyocera are already selling phones in some markets outside Japan or planning to do so very soon. It doesn't mean everybody will succeed and I expect some market consolidation by the end of this year or earlier into the next year. Here is a summary of who done what and what to expect next.

Sharp

Sharp is the one to watch closely after as the company is rumored to be the manufacturer of the first "Microsoft" phone - a device based on Danger Hiptop/Sidekick platform acquired by Microsoft a couple of years ago. Sharp also plans to enter markets in Europe and North America after it tasted the waters in the nearby Asian markets including Taiwan and China. Sharp sold about 1.6 million devices abroad in 2008 and aims to boost that number to 4 million units by March 2010.

Fujitsu

Fujitsu made a modest enter into the Taiwan market, partnering with FET in January 2009. Last year, the company also joined Symbian Foundation reinforcing its support for Symbian OS domestically and utilizing the membership as an opportunity to broaden the Symbian appeal elsewhere. However, Fujitsu is not only focused on Symbian - the company is also known for manufacturing Windows Mobile handsets and it created the whole market niche in Japan with its very successful Raku-Raku lineup targetd at senior end-users. Obviously, I can't say anything beyond that but expect Fujitsu to make some headlines in future.

Panasonic

Panasonic is rumored to enter neighboring markets, with the main destination being China. There are some talks of Panasonic considering South American markets, especially Brazil where the similar with Japan's mobile TV standard is being adopted.

Toshiba

Backed by NTT DoCoMo, Toshiba added its first customer win in Europe in June 2009 by partnering with Spain's Telefonica. Having attracted industry's attention with the release of the TG01 - one of the thinnest Windows Mobile smartphones produced by ODM vendor for Toshiba, the company made a decision to outsource the manufacturing of phones out of Japan from October 2009.

NEC (NEC/Hitachi/Casio)

Having retreated from overseas markets in 2006, NEC is planning a comeback. First, it joined forces with two other players - Hitachi and Casio. As the leverage, the new company can utilize Casio's existing channel in the US. As you might've known, Casio found its niche in the US with a ruggedized and water resistant phone line bound for Verizon Wireless. Hitachi also rebranded its Wooo W53H keitai into the canU S1000 and shipped it to South Korea

Kyocera

Kyocera is an old-timer in the US market and now company also sells in Soth America as well. It got into Sprint's storefronts through the acquisition of another troubled Japanese vendor Sanyo. The prospects are still not clear for Kyocera overseas and domestically the picture is even worse.

Japanese vendors overseas
Kyocera	USA/Canada/Russia/India/Thai/Vietnam/New Zealand
Sharp	Europe/North America/China/Taiwan/Hong Kong
Toshiba	Europe/Asia
NEC-Hitachi-Casio	USA/South Korea
Fujitsu	Taiwan
Source:	M-Report

Fujitsu announces world's first "separate" handset

Fujitsu is in a spotlight today (disclosure: I'm an employee of Fujitsu) as the company announced the first-of-its-kind mobile handset. It might look as an ordinary slider but in reality the sliding panels can be detached from each other. While someone might argue about the merit of handset's detachable atribute, nevertheless the engineering implementation of the idea is worth praising on its own. Besides the "wow" factor, Fujitsu thought about practical use cases for its detachable phone. When separated, the display (3.8" touchscreen) and the dialing pad communicate with each other via Bluetooth. In this state user can make and receive phone calls by using the dialing pad while having a browser, email or other application open on the display panel. The dialing pad also can be used as a remote control or game controller. Also, the dialing pad turns into QWERTY keyboard and when not needed it can be left behind allowing the user to travel light. Fujitsu plans to have several detachable options. For instance, instead of QWERTY keyboard someone would prefer carrying a projector. The device under the F-04B name should hit the DoCoMo's shelves in 1Q2010. Stay tuned more details to follow.


- Posted on the go

Japan mobile phone market contracts by 19% in 2Q09

Japanese handset vendors sold 2.3 million less mobile phones in 2Q2009 than in the same quarter last year. With 9.5 million unit sales this quarter became the seventh consecutive quarter with negative growth in Japan. On a brighter side, at least for Sharp, this is the 13th consecutive quarter for the vendor to retain top share. The hard times will likely continue in 2H09 for mobile vendors in Japan, the IDC press release states.

Source: IDC Japan

Bar code scanner Windows smartphone from Fujitsu

This niche but powerfull smartphone manufactured by Fujitsu for DoCoMo impressed me after looking under its hood. Oh boy, it's got some power. Of course, it is compatible with any kind of bar code standard you can imagine. Too bad it is limited to some vertical industry use scenarios like transportation or logistics. It should be available in 1Q2010.

Phone Specs
Platform / OS:	Windows Mobile 6.5 Pro
WCDMA:	FOMA 7.2Mbps
WLAN:	802.11 b/g
Bluetooth:	Yes
GPS:	Yes
Water resistant:	IPX5/IPX7
Shock resistant:	IP5X
Touch screen:	2.8inch WQVGA TFT 65K
Memorty:	MicroSD(2GB)/SDHC(8GB)
Camera:	2.0MP
Weight:	180g
Dimensions:	154mm X 51mm X 20mm

Source: NTT DoCoMo

Mobile phone sales drop by 29% in Japan in 2008

According to MM Research Institute, the cellphone shipments decreased by 29.3% YoY in Japan in 2008, totaling in 35.8 million units. Sharp was leading the pack for four years consecutively, shipping over 8 million handsets last year. International players failed to make a big impact in 2008, grouped in the Other category where Apple iPhone and HTC Diamond were notoriously visible. The 2009 outlook doesn't look bright as the handset shipments are expected to drop by another 7.5% hitting the low of 33.2 million units.

Source: MM Research Institute via Keitai Watch

Top ten handset models sold by DoCoMo in second week of Oct 08

ITC Network, a retail kisok operator, released NTT DoCoMo's handset sales popularity rank in the second week of this month. Panasonic P906i in metallic and black color variations was the favourite followed by Sharp's SH906i in white. Fujitsu's senior users-oriented phone Raku-Raku 5 F884iES in Golden color closed the top-five rank letting another Panasonic's P906i in white to get in front of it. See details below.

1. Panasonic P906i (Metallic)
   
2. Panasonic P906i (Black)
   
3. Sharp SH906i (White)
   
4. Panasonic P906i (White)
   
5. Fujitsu F884iES (Golden)
   
6. NEC N706i (Pink)
   
7. NEC N906iμ (Saphire Black)
   
8. NEC N906iμ (Pink Diamond)
   
9. Panasonic P706iμ (Champagne)
   
10. NEC N706iII (Polish Black)
    

Source: ITCNetwork via K-tai.impress.co.jp

iPhone sales go flat in Japan?

Market research company GfK has just released handset sales rankings for the first week of October in Japan. Surprisingly, Apple iPhone didn't make it to the country's top ten and even ended up third in Softbank's line up. Talking about the novelty effect evaporating...Overall, October is a slow month in Japan as the industry holds its breath for carriers' winter handset lineup announcements. But will Apple have something new to offer? I doubt that. To make it worse for Softbank, an iPhone's operator in Japan, none of its models was listed in top ten list. At the same time DoCoMo's models occupied the top list taking seven out of ten positions including the first top three. Unfortunately, GfK doesn't make public the handset sales numbers but at least you can see the top ten list below:

1. Panasonic P906i (NTT DoCoMo)
2. NEC N906iμ (NTT DoCoMo)
3. Sharp SH906i (NTT DoCoMo)
4. Sharp W62SH (KDDI au)
5. Toshiba W61T (KDDI au)
6. NEC N706iμ (NTT DoCoMo)
7. Panasonic 706iμ (NTT DoCoMo)
8. Fujitsu Raku-Raku Phone V (NTT DoCoMo)
9. Sony Ericsson W62S (KDDI au)
10. NEC N706iII (NTT DoCoMo)

Source: GfK via ITMedia

DoCoMo-Google partnership: i-mode on Google steroids

In January, Google Japan and NTT DoCoMo announced their intention to work together to bring Google search, AdWords advertising platform and other Google apps to DoCoMo’s i-mode phone users. While Google already has relationships with KDDI au, the deal with DoCoMo goes beyond a simplistic inclusion of Google search box on the top page of i-mode portal. DoCoMo is about to stop playing a gatekeeper role as its users will search and browse beyond the operator’s own portal. So what are the changes that Google brings to DoCoMo i-mode?

Search results are fetched from three sources
Google search engine indexes three web domains for results: 1) i-mode sites approved by DoCoMo; 2) non-official i-mode sites; and 3) generic Internet websites. Before, users couldn’t perform searches that included non-official and Internet websites from i-mode portal.

Search results are grouped by three types
The way search results are displayed on i-mode portal is also will be changed to reflect the addition of non-official i-mode sites and Internet websites. Based on the source, Google and DoCoMo will group the search results accordingly.

Google keyword-based ads are integrated into search results
A big win for Google is the decision to integrate its AdWords advertising platform into i-mode portal. Now, keyword-relevant text ads marked with a [PR] sign will be placed in up to three locations across the page with search results with a total number of ads not exceeding four. No word about the revenue-sharing model between Google and DoCoMo though.

Display ads to compliment text ads
While details are not clear, there are some reports that Google AdWords platform will also be used to serve display ads such as banners across a bunch of DoCoMo’s services including i-mode portal, Message F (free), G-guide and others. DoCoMo’s D2Communications ad agency will work with Google on implementation of this new mobile marketing structure.

More Google apps to be preinstalled on DoCoMo handsets
Two companies agreed to preinstall a set of Google apps on DoCoMo handsets in near future. The first app to be preinstalled is Google Maps. The Fujitsu F905i and NEC N905i handset already spot Google Maps. All future handset models will be equipped with Google Maps, according to DoCoMo. Having started with the integration of Google Maps, the companies also plan to make Gmail, Picasa, YouTube and Google Calendar optimized for i-mode usage. The idea is to enable all kinds of mashups between these apps and search results like having a link from search results page to Google Maps for example.

Google to become a default page for DoCoMo Full Browser
It was decided that DoCoMo’s all future handsets with a full browser installed will have Google’s top page as a start page by default.

DoCoMo’s Android plans
It seems that DoCoMo wanted to ensure both the i-mode services and Android working seamlessly on its handsets when it joined Google’s led OHA initiative. We can expect i-mode handsets optimized for Google services rather than a complete shift to one platform – Android. Thus, DoCoMo’s handsets based on Symbian MOAP and Linux MOAP platforms will be optimized for Android experience, while some new Linux-based Android handsets will be optimized for i-mode service.

Related articles on Google's mobile strategy in Japan:

• Mobile Google localization primer: emoji and mobile Gmail
• Google Japan intros new single portal for domestic mobile operators
• Google befriends with KDDI, plans global expansion from within Japan?

NTT DoCoMo’s top ten selling phone models

GfK, a market research company, published ranks of top selling mobile phones with each operator in Japan during the last week of November. This post will cover NTT DoCoMo. As DoCoMo starts rolling 905 series phones, devices from the 904 series line-up occupied the top positions due to discounts and general popularity of one-seg phones. Fujitsu’s one-seg F904i model ranked first for the second week in a row followed with another one-seg model the 704i by Sharp (see table below for the rest).

NTT DoCoMo Top Ten
1 (1)	Fujitsu F904i
2 (3)	Sharp SH704i
3 (4)	Panasonic P904i
4 (2)	Sharp SH904i
5 (5)	Fujitsu Raku-Raku4 F883iES
6 (6)	Fujitsu Raku-Raku3 F882iES
7 (9)	NEC N704iμ
8 (8)	NEC N904i
9 (10)	Mitsubishi D904i
10 (7)	Sharp SH903iTV

Source: GfK via ITMedia

Sharp is still undisputed handset leader in Japan: 1Q07 data

Sharp continues to hold its dominant position in Japan’s handset market through four consecutive quarters, increasing its market share to 22.6% in 1Q07 from 21.2% in 4Q06, reports IDC. Strong sales of Raku-Raku series phones are worth mentioning among other 1Q07 highlights as they helped Fujitsu get in the top five handset vendors.

Overall, handset shipments increased by 3% from last year, reaching the five-year record of 14.39 million handsets. National carriers’ flourishing spring handset collections targeting at various segments with ultra-thin and easy-to-use models and improvements in service and pricing contributed to this rather unusual burst in handset sales.

Source: IDC Japan

Fujitsu F704i is not afraid to plunge into water

Fujitsu's water-resistant F704i phone is scheduled to hit DoCoMo shops' shelves on July 20. This is a slight modification of the F703i model released in Spring. The main change is the inclusion of a global WCDMA/GSM support to bring piece of mind to Japanese users when they accidently drop their handsets into water abroad.

Phone Specs
Model:	F704i
Carrier:	NTT DoCoMo
Maker:	Fujitsu
Bands:	FOMA/WCDMA/GSM
Form factor:	clamshell
Color variations:	Magenta, White, Golden, Black
Weight:	109g
Dimensions:	100 x 48 x 17.9mm
Main display:	2.2inch, 262K color TFT LCD 240x320
Standby:	420 hours
Talk time:	145min
Platform / OS:	Symbian
Memory:	21.5MB (for music)
Memory card:	microSD
GPS / Location:	No
Bluetooth:	No
Infrared:	Yes
USB:	Yes
Wi-Fi:	No
Camera:	1.3MP (main)/ 1.1MP (sub)
Video calling:	Yes
TV tuner:	No
Music player:	Napster (WMA/AAC)
Browser:	Full Web
Water resistance:	IPX5/IPX7
Mobile Wallet:	Toruka, DCMX, FeliCa
Barcode reader:	JAN/QR/NW7/CODE39
Pust2Talk:	No

State of the art: Fujitsu waterproof F703i handset

Engineers at Fujitsu worked three years to advance the water resistant technology in cellphones. The idea of waterproof handset is not new to Japanese market as Sony Ericsson was first to offer the SO902iWP handset to DoCoMo users last year while Casio shipped the G'zOne TYPE-R for KDDI au. However, while the predecessors of the F703i were rugged devices designed for the use in rogue conditions, Fujitsu made a waterproof handset that looks like a regular cellphone. The main target of the F703i is women who might use the phone in places where the water can easily get inside the phone and damage it. The F703i is graded to be IPX7 compatible (capable of being underwater for 30 minutes at 1 meter depth), which makes the phone suited for use in bath, shower or kitchen.

Besides the water resistant feature, the F703i spots quite a fancy look and employs a so called floating illumination with three LEDs placed across the front panel. Application-wise, the F703i has a built-in MP3 player compatible with Napster to Go music streaming service and FeliCa-based mobile-wallet. DoCoMo sells the F703i at JPY16,400 ($135).

Phone Specs:
Model	Fujitsu F703i
Carrier	NTT DoCoMo
Form factor	clamshell
Color variations	snow white, blossom pink, lamp black
Weight	109 g
Dimensions	48X100X18mm
Main display	Type: LCD (color TFT); Colors: 262,144; Size: QVGA 2.2inches (240X320)
Battery life	145min (talk); 80min (video call); 300-420 hours (standby)
Battery type	unknown
Platform / OS:	Symbian
Memory	unknown
Memory card slot	microSD
GPS / Location	No
Bluetooth	No
Infrared	Yes
USB	Yes
Wi-Fi	No
Camera	1.3MP (main); VGA (internal)
Video calling	Yes
One-seg TV	No
Music player	WMA/AAC compatible
WAP / Web browser	unknown
Push-To-Talk	No
Mobile Wallet	i-mode FeliCa
Barcode	JAN, QR, NW7, CODE39
Biometric authentication	unknown

Best selling phone in Tokyo area: Fujitsu F882iES

K-tai Watch routinely published a table of best-selling NTT DoCoMo's phones in Tokyo metropolitan area for the 10/5~10/11 time period. The king of the hill was the golden color FOMA Raku-Raku 3 phone also known as Fujitsu F882iES offered by NTT DoCoMo. What is interesting is that Raku-Raku series models target at older users by simplifying handset features and keeping "bells and whistles" away. For example, Raku-Raku phones spot bigger keys with easy-to-see numbers, the on-screen font size is also made larger, while menu is simplified for easy navigation. The F882iES also comes in pink and black, but the golden is this time favorite. During the last update it was third in the ranks and now it is on the top. I'll see how long it will hold to this sweet position. The F882iES was followed by two color variations of the same model by Panasonic: the P902i in silver and black. The fifth place was also occupied by the P902i - this time in white color variation. The white N701i by NEC was placed fourth.

Source: ITC Network via K-tai Watch

Japanese handset makers markedly contribute to global smartphone shipments

The Asia-Pacific region claimed 46% of smart mobile device shipments worldwide in Q1 2006, according to Canalys. Overall, the global shipments of smart mobile devices increased 55% from 1Q 2005. Japanese handset makers played an important role in the increased shipments of smartphones, making Symbian OS global share in smart mobile devices to reach new high of 69%.

“In addition to the shipment increases made by Nokia and RIM, Japanese vendors such as Mitsubishi and Sharp have achieved very high volumes of their new Symbian-based FOMA smart phones in Q1, catapulting them into the global top five. With increased shipments from Fujitsu, and a new device from Sony Ericsson, Symbian is enjoying not only significant Japanese market success, but also seeing record global market share,” said Canalys senior analyst and research manager Rachel Lashford.

Japan's wireless market week wrap-up

DoCoMo postpones launch of Nokia handset
NTT DoCoMo has delayed indefinitely the launch of a 3G phone from Nokia, saying the handset had software glitches. The phone, which is Nokia's first 3G model for DoCoMo, was scheduled to go on sale today.

DoCoMo achieves 2.5Gbps packet transmission
NTT DoCoMo announced that it achieved 2.5Gbps packet transmission in the downlink while moving at 20km/h.

Two new Symbian OS handsets announcement
With the launch of two Symbian OS handsets from Fujitsu (FOMA F702iD) and Sharp (FOMA SH702iD), the total number of Symbian handsets shipped in Japan increased to 24.

iPod in Japan faces stiffer competition from mobile phones
While Apple's iPod is enjoying 51.3% share of the domestic digital-music player market and iTunes online music store leads in song downloads, Japan's carriers and handset makers are plotting a counterstrike to topple Apple by shipping music phones with improved battery life and song higher-quality compression format and launching user-friendly online music stores. Apple's weakness in Japan is the lack of tie-ups with domestic labels, thus Aplle can offer a limited number of songs by Japanese pop-stars.