According to a story in the Daily Yomiuri, NEC’s next president Kaoru Yano told a recent press conference that “It’s bizarre that there are more than 10 cell phone makers in Japan. We’ll definitely go for a tie-up”, showing his enthusiasm for a rearrangement plan. Following the Nokia-Sanyo announcement and as mentioned in our Predictions for 2006, we are not surprised to hear about his plans for consolidation in the Japanese OEM market.
Global mobile phone sales in 2005 rose 21 percent from the previous year to 816.6 million units, with Japanese manufacturers’ share shrinking from 2 to 1 percent, information technology research company Gartner Japan Ltd. said Thursday. Although Japanese-Swedish joint venture Sony Ericsson Mobile Communications AB’s share grew to the fifth-largest, total share by Japanese companies went down from the 2 percent level to the lower 1 percent.
NTT DoCoMo, Inc. and its eight regional subsidiaries have just announced they will postpone the launch of the 3G FOMA NM850iG handset, which had been scheduled for 24 February 2006. DoCoMo is confirming the handset’s quality and will launch the handset as soon as all confirmations are completed. (Ouch! — Eds.)
Last week’s announcement of Nokia and Sanyo joining forces to boost their combined CDMA market share in the US was lost in the next-gen mobile TV hype and media avalanche (not to mention complaints about pokey dial-up access from the venue) coming from the 3GSM World Congress. The Nokia-Sanyo combination is an obvious play with both sides bringing a decent value proposition to the table; Nokia has massive manufacturing capacity, established distribution channels and a global brand while Sanyo has proven experience producing ultra-cool high-tech handsets and strong operator/vendor relationships. The companies gave no financial details of the tie-up, which is expected to close in the second quarter, but the JV will be based in Osaka and San Diego with an estimated 3,500 employees.
The challenge — and rewards — of morphing these respective ‘best of’ brands into a unified product offering are significant. Sanyo has advanced mobile battery and GPS chip expertise that even a Nokia would be hard-pressed to build on their own and such technologies are fast becoming key competitive differentiators as the US (and other markets) mandate emergency location reporting and other public safety services. Sanyo was vaulted to the ranks of top-tier suppliers to national champion DoCoMo last year as the name behind some of Big D’s first GPS-enabled models, the SA800i and SA700iS.
A Nokia-Sanyo tie-up makes sense from an economy of scale perspective and the end result should be better hardware for the end user, potentially at a lower price, which should please the operators and — more to the point — their shareholders.
DoCoMo announced today they will start selling the 3G FOMA NM850iG handset, made by Nokia [ .jpg image ], which works on DoCoMo’s 3G FOMA network in Japan and W-CDMA, GSM and GPRS networks overseas where DoCoMo’s global roaming services are available, beginning February 24, 2006. Application to DoCoMo’s WORLD WING 3G roaming service is required to use the handset overseas for voice calls, i-mode, videophone and short messaging service (SMS).The handset connects wirelessly with Bluetooth devices, including PCs for data synchronization and connection to the Internet.
Sanyo Electric Co. has reached a basic agreement with Finland’s Nokia Corp. to set up a 50-50 joint venture in the US as early as next autumn to make 3G mobile phones, the Nihon Keizai Shimbun reported without citing sources. The new joint venture, which will likely be located in San Diego will produce CDMA2000 3G cell phones, the business daily said. For Nokia, the joint venture will likely help it absorb Sanyo’s know-how, particularly in the development of thin handsets, according to the report.
