MCI handsets in danger of missing 3G launch

date: 09th February 2001, source by: Reuters

Japan's biggest cell phone maker, Matsushita Communication Industries Co Ltd, already reeling from a delayed product launch and a profit warning, is now scrambling to be ready for the start of key ``3G'' next-generation wireless services.

Although a number of handset makers are working on cell phones capable of offering moving pictures and other advanced features of 3G, expected to be launched in May by Japan's dominant wireless carrier NTT DoCoMo , the pressure is on MCI as industry leader to play its part in 3G's lift-off.

``I think the May launch has become very difficult,'' said Kazushige Hata, an analyst at ING Barings. ``Even Java-compatible handsets were delayed for two months, and W-CDMA (wideband code division multiple access, or 3G) phones are lot more complicated.''

MCI's group net profit fell 40 percent year-on-year to 5.2 billion yen ($44.55 million) for the three months to December, partly dragged down by delays in introducing Java-compatible handsets that enable users to download games or shop online.

Mamoru Takagi, an analyst at Societe Generale Securities, said not only might MCI miss the 3G launch, but added: ``Even if MCI launches 3G phones on time, I'm not so bullish about demand.''

He noted DoCoMo's own projections of a modest 150,000 subscribers to 3G in its first year, compared with the 45 to 47 million mobile phone handsets sold every year in Japan.

NTT DoCoMo said there are several handset makers working on 3G phones, but analysts said MCI would ordinarily be one of the few firms capable of rolling out products on time.

BAD NEWS ABOUNDS

They added that MCI's efforts to push 3G as well as Java-compatible handsets would likely be hampered as carriers try to reduce inventories before selling new models.

MCI nevertheless remains hopeful that Java handsets, which finally hit the market in late January, and the introduction of 3G services will boost its revenues.

top