WW-102 -- NEC's Mobile Business Begins to Grow Globally

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J@pan Inc presents the Wireless Watch Newsletter:
W I R E L E S S W A T C H
Commentary on the Business of Wireless in Japan
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Wireless Watch Newsletter
Commentary on the Business of Wireless in Japan
Issue No. 102, Tokyo, Wednesday, August 6, 2003

CONTENTS

++ Viewpoint: NEC's Mobile Business Begins to Grow Globally

++ Noteworthy News:
-- Survey Finds Online Shoppers Prefer PCs to Mobile Devices

++ Useful Link:
-- http://www.tca.or.jp (The Telecom Carriers Association)

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++ Viewpoint: NEC's Mobile Business Begins to Grow Globally

Most of us know NEC from its popular i-mode phones, but the
electronics giant has a complete product lineup of mobile
communications products ranging from base stations to sales of
ringtones. In the business quarter ending June 30th, the sales of
mobile infrastructure decreased, while shipment for mobile handsets
grew in Japan and full-scale sales to overseas markets began. Despite
the slowdown of its mobile infrastructure business, NEC's mobile
communications division sales increased by 35 percent to 249 billion
yen. What are the company's growth plans for the coming year?

NEC has been No. 1 in phone sales in Japan for nine straight quarters.
Recently, NEC also overtook Sharp for the most camera-phone sales. On
a global scale, however, NEC is still a minor player. About 1 million
handsets (10 percent of the company's production) are sold outside
Japan. This week, NEC announced that it would ramp up its production
to 15 million, of which 5 million are targeted for overseas markets.
The company's main production lines are in Japan and China. NEC's GPRS
i-mode handsets are currently sold in the markets in Europe and
Taiwan, while its WAP handsets are shipped to TIM (Italy), AT&T
Wireless and China Mobile. 3G is a main growth market for NEC because
it can leverage on its experiences in Japan and work with Hutchison 3G
in Europe and Australia.

Another area of growth is the infrastructure business for i-mode and
3G networks. NEC has delivered the i-mode platforms to KGT (Taiwan),
Bouygues Telecom and Telefonica. Surprisingly, Bouygues picked NEC as
its platform supplier last year, while European vendors like LogicaCMG
were also interested in getting their share of the i-mode market. The
growth numbers of Bouygues indicate that NEC's i-mode platform is
performing well.

NEC and Siemens have successfully rolled out a part of the 3G network
for Hutchison 3G UK. Their base stations work much better than
Nokia's, whose part of the UK network has had quite a few problems.
Rumor has it that Hutchison will soon replace Nokia's base stations
with those supplied by NEC and Siemens.

Although NEC is not a direct threat to Nokia and its handset strategy
is less aggressive than that of the bullish Samsung, the company is
building a solid basis for sustainable growth in its mobile business.
It is well positioned to play a major role in the W-CDMA 3G business.

-- Arjen van Blokland

Link:
"One for the Road" (on plans by NEC and Toshiba to develop nanotech
fuel cells) from our July issue (subscription required)
http://www.japaninc.net/inc/login.html?articleID=1131

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++ NOTEWORTHY NEWS
(Long URLs may break across two lines, so copy to your browser.)

** Survey Finds Online Shoppers Prefer PCs to Mobile Devices

In Brief: Popular Japanese Web site K-tai Watch's mobile-shopping
survey found that 63 percent of the 315 people who responded had no
interest in mobile shopping, and just 15 percent had bought something
using a mobile device. Popular products to buy are CDs, DVDs and
books.

Commentary: The respondents said they prefer PC-shopping to the mobile
version. The user interface for the PC is much better to compare and
visualize products. But books, CDs, DVDs and tickets are suitable for
mobile shopping because buyers know exactly what they are going to
get.

Source:
http://www.cnnic.net.cn/develst/2003-1e/index.shtml

Link:
"Shopping on the Small Screen" from our March issue
http://www.japaninc.net/article.php?articleID=1039

++ Useful Link: http://www.tca.or.jp

In Brief: The Telecommunications Carriers Association (TCA) publishes
every month the number of subscribers of Japanese mobile communication
networks and mobile Internet statistics on its bilingual Web site. The
TCA also gives historical data and is kept very up-to-date.

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SUBSCRIBERS: 4,160 as of August 6, 2003

STAFF
Written by Arjen van Blokland; edited by the
J@pan Inc staff (editors@japaninc.com)

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