Telecommunications

August 2006

3 Cell Phone Firms To Sharply Expand Handset Lineups This Autumn
Three major cellular phone service providers will release a large number of new handset models during the September-November period to lure customers away from rivals after the introduction of number portability in October. KDDI Corp.'s au cellular phone service plans to introduce 10 or more new models between late September and October. NTT DoCoMo Inc. has already begun rolling out new models. The company normally unveils its latest models in December to coincide with the winter bonus sales season. This year, it will put around 10 models on the market by November. Vodafone KK, which will change its name to Softbank Mobile Corp. on Oct. 1, is expected to release a higher number of new handset models than the two rivals. The three firms are also fiercely competing in services. DoCoMo started offering downloads of complete songs in June to catch up with KDDI. KDDI plans to launch a videophone service in December to match rivals' offerings. Meanwhile, Vodafone is expected to offer a phone-based online social networking service. (The Nihon Keizai Shimbun, August 24, 2006)

3G Cell Phones Made Up 92.6% Of Domestic Shipments In June
Third-generation cellular handset models accounted for 92.6% of domestic mobile phone shipments in June, topping the 90% mark for the first time, according to data released Tuesday by the Japan Electronics and Information Technology Industries Association. Since December, shipments of 3G models have topped 80%. The increasing popularity of the handsets, which NTT DoCoMo Inc. introduced in 2001, was the main impetus behind the strong performance. Total domestic shipments of cell phones in June jumped 7.2% to 4.47 million units, registering the 10th straight month of year-on-year growth. In the January-June half, shipments totaled 26.47 million handsets, up 17% on the year. This follows a 4% uptick a year earlier and a 12% decline in the first half of 2004. (The Nihon Keizai Shimbun, August 09, 2006)

MARKET SHARE: Cellular Phone Handsets
Total domestic sales of cellular phone handsets increased 3.2% year-on-year to 44.95 million units in 2005, for the first annual climb in two years. Output was boosted by demand for models equipped with advanced features, http://hana/such as electronic-money and music-downloading functions. Panasonic Mobile Communications Co. regained the No. 1 spot in market share for the first time in five years, grabbing a 16.1% slice, up 0.8 percentage point. The subsidiary of Matsushita Electric Industrial Co. supplied products for all new lines of handsets released by NTT DoCoMo Inc. in 2005. Panasonic Mobile continued attracting people with such models as those with removable exteriors that come in various patterns and colors. NEC Corp., which had been the market leader for four years, slipped to second place with a share of 15.6%, down 3.5 points, because of lackluster sales of products with high-value-added features, such as the N901iS and N902i. Sharp Corp. remained in the third position, but boosted its share by 0.4 point to 15.2% -- only 0.4 point behind runner-up NEC -- mainly due to solid sales of models for Vodafone KK and NTT DoCoMo. Toshiba Corp. moved into fourth place from sixth, capturing 10.8% of the market, up 3.2 points, owing to its supply of products of a wider range of models for KDDI Corp.'s "au" phone service. Sanyo Electric Co. fell to fifth place from fourth, losing 0.9 point of its share to 9.8%. (The Nikkei Business Daily, August 03, 2006)