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JAPAN’S IDO MARKETS 69-GRAM KYOCERA TERMINAL

TOKYO-IDO, a cellular operator covering the Kanto and Chubu regions of Japan, will market a 69-gram cellular terminal starting in mid-July, the company announced recently. While this is just the latest in a succession of increasingly lighter handsets sold in the Japanese market, what is unusual about the announcement is that NTT DoCoMo is not making it first.

Market watchers see this as a sign the conventional market structure, in which DoCoMo traditionally has enjoyed an advantage as a technology innovator, is changing.

The new product, the Digital Minimo 526G, is manufactured by Kyocera. The lightest cellular terminal up until now has been DoCoMo’s Digital Mova P206 Hyper, at 79 grams. DDI Cellular Group, a subsidiary of DII, is planning to market the same terminals soon. DDI is a subsidiary of Kyocera.

Both IDO and DDI have complained that since DoCoMo has occupied all the basic technology for PDC (Personal Digital Cellular), they have had a bad time with their sales. That was the main reason why the two firms decided to launch cdmaOne service in 1998 and 1999 and are jointly studying W-cdmaOne, the next-generation cellular system based on cdmaOne. NTT is developing next-generation systems based on W-CDMA (Code Division Multiple Access).

DoCoMo always has released the lightest terminals first since it launched PDC-based digital cellular services in 1993. PDC basically was developed by NTT, but the technology was supposed to be open to all carriers. However, other carriers have been forced to wait a couple of months or sometimes a half year after DoCoMo markets a new terminal.

DoCoMo jointly developed the Mova series along with NEC Corp., Fujitsu, Mitsubishi Electric Corp. and Matsushita Communications Industries Co. DoCoMo and the four venders reportedly concluded an agreement that these venders would supply their terminals for DoCoMo on a preferential basis.

In the Japanese market, the increasingly lightweight terminals are significant for carriers. The timing of when a carrier has released a new “lightest” terminal has influenced sales. Gaps between DoCoMo and the rest of the carriers have been widening since Matsushita developed a terminal weighing less than 100 grams.

When the other carriers have introduced the latest, lightest terminals, DoCoMo usually is ready to introduce much lighter terminals. Other carriers had no way to challenge DoCoMo except with lower prices for their terminals and communications fees.

Supported by such preferential arrangement and its strong brand name, NTT DoCoMo today has 57 percent of the market share.

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