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Japanese Phone Makers Allied to Grab 3G Market(SinoCast China IT Week Via Thomson Dialog NewsEdge) BEIJING, August 17, SinoCast -- NEC announced at the end of last month that it established strategic partnership with Panasonic home appliances and Panasonic Mobile. The three jointly set up a new mobile phone R&D company. Due to their failure at China's 2G market, Japanese companies began to adjust their overseas strategies, hoping to ally to grab a lucrative piece from China's 3G market. Japanese companies are the first ones to bring color screen phones and camera phones to China. However, they encountered overall defeat in China. Two years ago, Japanese phones began to show signs of decline. Phone makers like Toshiba, Panasonic and Mitsubishi had to reduce their business in China due to difficulties they met in promotion. At the beginning of 2005, Toshiba declared to quit Chinese mobile phone market. Shortly after that, NEC abandoned low-end market and focused on manufacture and sales of high-performance phones priced above CNY 2,000. High-end phones constituted 40% of its sales in China. On December 9, Panasonic declared to close down its two mobile phone factories in the Philippines and Czech Republic, and mobile phone R&D centers in the United States and the UK. This means that Panasonic withdrew from all its overseas 2G and 2.5G markets, including China. On January 31, 2006, Mitsubishi also retreated from China. Only NEC and Kyocera are still trying hard to promote their business in China. Japanese phones enjoy high popularity in Japan. However, they are facing a declining condition at overseas markets. This is particular evident in Chinese market. Insiders believe that Japanese phone makers' difficulties in China are mainly resulted by their lack of technology innovation and good distribution channels. In Japan, telecom carriers are responsible for the sales of mobile phones, and phone makers do not need to do too much. So phone makers are quite used to such business mode. Things in China are completely different. Consumers are more likely to go to shopping malls to buy mobile phones. Under such circumstance, Japanese phone makers still paid little attention to marketing and promotion. They also did not build their own distribution network. Take Panasonic as an example, due to its unfamiliarity of China's mobile phone distribution network and its own misjudgment, it got a swollen inventory and directly affected sales agencies' confidence. In recent years, international phone giants like Nokia and Motorola all expedited their speed in technology innovation. Nokia continued to improve phone quality. Motorola, on the other hand, launched thin and light phones, which attracted many consumers' eyes Compared with them, Japanese phones are not creative enough in technologies. Besides, Japanese phone makers are lagged far behind in launching new products. In fact, news about the alliance between NEC and Panasonic was already spread among the industry from the end of last year. During the 2005 financial year, the mobile phone sector of NEC incurred 35 billion yen losses. The former president of NEC expressed last year that NEC would search cooperation with other companies to get out of the difficult situation. In China, NEC's new products are reduced from 30 to 15 this year. This April, when Lu Gan was appointed as the president of NEC (China), there was news that NEC, Panasonic and Toshiba would merge their phone business. If the cooperation was successful, the three companies would grab 45% shares of Japanese phone market. The above three companies also signed agreement with NEC Electronics and Texas Instrument, and declared to set up a new joint venture Adcore-tech. The new company will focus on 3G and 3.5G core technologies and products. Both of the two new joint ventures are engaged in 3G development. It is obvious that Japanese phone makers want to take a considerable piece from China's 3G market. Copyright 2006 Sinocast |