Japanese companies are dark horse in the Chinese handset market

September 16, 2004 - source: Telecoms Korea

LG Economic Research Institute released a study calling for keen attention to Japanese handset makers' recent move in the Chinese market where they have been lagging behind.

According to the report, "Global companies' counterattack in Chinese handset market," Japanese companies are enhancing business in China in an attempt to survive the domestic market saturation.

NEC appointed a Chinese national who had been working for Motorola to a high ranking position to step up its business in China. The Japanese company released about 10 new models during the first half of this year and prepares to add 10 more for the second half. Another Japanese handset maker, Sharp largely increased the number of Chinese engineers for its R&D centers in Japan to make them core competence in capturing the Chinese market, the research report added.

As China evolves into the market of cutting-edge mobile technologies, Japanese handset makers consider the country as the most important market to replace the saturated domestic market and the stepping stone to get into the global market. Being experienced in 3G commercial service, Japanese companies are likely to demonstrate its mobile competence in full swing starting from 2006 when Chinese commercial 3G service starts, LGERI study said.

The research institute affirmed, "Chinese handset market trend is drifting toward sophisticated multi-functional devices such as camera phones or MP3 phones. The portion of camera phones which just appeared in the Chinese market this year is now over 20%."

LGERI quoted SNO-MR, a market research institute, reporting that Motorola had the biggest 34% market share in China as of June 2004. Nokia ranked second with 12%, while Sony Ericsson acquired 11% and Samsung Electronics 10%, the report added. Japanese Panasonic and NEC were also on the list with 7% and 5%, respectively.