Thomas White Global Investing
Japan
Japan Stamp
March 11, 2011
A Postcard from Asia
Japan: Mobile handset makers riding on Android popularity to go global

Sony Ericsson mobile handsets

While Sony Ericsson has already launched its Android smartphone globally, at least three other Japanese handset makers are getting ready to release their Android smartphones in overseas markets.

Envision the Los Angeles Lakers at the bottom of the NBA league rankings. As unlikely as this would seem, this is exactly the position Japan’s mobile handset makers find themselves on the global market. See the irony? A technology superpower, Japan is home to an ultra innovative mobile telecommunications industry, and yet Japanese handset makers such as Sharp, NEC, and Kyocera are merely fringe players in a market where the likes of America’s Apple, Canada’s Research In Motion (RIM), and South Korea’s Samsung are cashing in on the worldwide smartphone boom. But now Japanese handset manufacturers are preparing for an aggressive overseas push. They plan to ride on the popularity of Google’s Android mobile operating system to go global.

Truth be told, the Japanese handset industry’s insignificance on the world stage today is somewhat of its own doing. The sector has been tardy in sensing opportunities beyond Japan’s shores and has concentrated too long on making handsets suitable for only the Japanese way of life. It seems Japan has a unique mobile culture. Mobile phones are bought and sold here not just as communication devices but also multipurpose tools that help consumers do everyday chores. With this, handset manufacturers in the country have typically obsessed over designing hardware that could fulfill as many practical needs as possible.

In fact, Japanese handsets are so sophisticated that it is commonplace for phones to be used to pay for the subway, watch digital TV while commuting to work, register attendance at work, or purchase fresh fruit from a vending machine. Clearly, such handsets have no special quality outside Japan’s technologically advanced scene and, therefore, very few Japanese handset firms have even attempted to sell their products outside their home market. And in this intensely competitive, low-margin market, few have had the resources to even venture outside Japan. What’s more, due to their fixation on hardware design and innovation, Japanese handset makers have neglected to improve their software and now find themselves out of sync with the global consumer craze for apps, which are downloaded using a software platform.

So how can the Japanese handset market possibly come from behind in this global race now? Given these constraints, Android is arguably the only way for Japanese handset makers to reach global consumers. The mobile operating system, which Google provides free to manufacturers, has emerged as the world’s best-selling smartphone platform. And Android is widely considered to be the strongest competitor against the proprietary operating system Apple uses for the iPhone, the world’s most profitable smartphone. Not surprisingly, the majority of smartphone producers, including those that initially used their own mobile operating systems, have adopted Android to take on Apple’s iPhone.

According to a New York Times report, at least four Japanese handset makers have already adopted Android. Sony Ericsson, which had initially launched its high-end smartphone with operating systems promoted by Nokia and Microsoft, has used the Android in all its recent product launches. NEC’s Android smartphone, the Medias N-04C, is now being sold only in Japan, but the product is soon going to be marketed in Mexico and Australia, the report said. NEC claims the Medias N-04C, which is eight millimeters thick, is the world’s thinnest smartphone. Sharp is getting ready to launch its Android-powered smartphones in the China market while Kyocera will soon release a two-screen Android smartphone in the U.S. Japanese manufacturers of handsets may have been disconnected from the global market in the past, but it looks like this network with Android may put an end to their connection problem after all.

 

Image Credit: yisris under a Creative Commons license

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