Berman and an increasing bunch of analysts, including IDC’s Michito (Mitch) Kimura believes that next February’s batch of new 3G handsets from February 2004 could be a catalyst for huge growth for the company.
First, for Berman, the phones will offer many features superior to the best 2G handsets including videophone capability. For Kimura, it’s all about the price. Check it out, folks! A recent peek at the local shops shows them flogging FOMA for an astonishing 13-15,000 yen ($140-160) half the price of the coolest (2G) 505is.
While the real cost of a FOMA terminal is shrouded inkily by the Dark Side of DoCoMo, it’s commonly thought that the company has poured in something like 45 billion yen into R&D subsidies to Japan’s five major handset makers to get FOMA into pockets. Now with a top-class, camera wielding, video yielding 3G FOMA hitting 251 model price levels, we reckon that DoCoMo must be subbing each FOMA handset over $500 a pop!
No wonder they are flying off the shelves.
DoCoMo really seems to be turning the FOMA corner. With indoor coverage sorted, FOMA got Symbian-ized in September when DoCoMo and Symbian licensee Fujitsu huddled together to get Japan’s first Symbian OS smartphone figured.
Mmm, wonder whats coming out of the Fujitsu fabs for FOMA in February.
The new model is due to have an advanced user interface and PIM apps. Then today Reuters reported Big D plans to offer NEC-made Linux OS phones as early as 2H2004. DoCoMo, it’s reported, has already offered handset makers specifications specs to cut development costs.
While CSFB figures cellular additions (2G and 3G) should fall about 29% YoY this fiscal year, and drop a further 9% YoY in FY3/05, Berman notes that the shift towards higher ARPU generating camera handsets has helped stabilize 2G ARPU sequentially, and as we pointed out in our earlier article, FOMA ARPU broke the magic ten grand barrier to ･10,430, 8.5% up sequentially, and up 35% over the average of last fiscal year. Berman notes that FOMA ARPU was thus about 30% higher than DoCoMo’s 2G average, which he called “ an extremely strong showing.”
As a result of these factors, CSFB has revised its revenue growth rate for DoCoMo by 1.4% this fiscal year, by 4.5% next fiscal year, and by about 7% in FY3/05 on both a faster-than-expected take-up of 3G this year, and higher-than-expected 3G ARPU.
Cut’em a third, Triple your numbers.
With FOMA phones now a third of the price they were a year ago, CSFB is nearly TRIPLING its 3G subscriber growth forecast from under 1 million for this fiscal year to 2.8 million.
In fact, in 2005 FOMA subs could hit 12 million, or 25 percent of DoCoMo’s subscriber base, and finally the pressure will be off the PDC and they can run it down and really start hooking in the HSPD.
But why now triple the handset predictions for the year? One of the reasons for this again is the five-FOMA model February “flotilla” of new handsets. Actually the next Fab Five will be coming out between February 2004 and April, providing a series of things that often happen don’t: We at WWJ feel parts shortages and technical hiccups can’t ever be ruled out, but especially these days with rumors of lack of flash memory and camera modules getting louder each week.
That’s a story in itself, and we’ll be filing a Viewpoint with more on this later in the week.
Bye for now.
– Paul Kallender