TOKYO-Japanese vendors are in the final stages of developing third-generation (3G) terminals. Japanese 3G services are scheduled to be launched earlier than any other country in May 2001 by NTT DoCoMo, followed by J-Phone, the mobile business of Japan Telecom and the newly merged KDDI Corp.
NTT DoCoMo has already selected its 3G terminal vendors. All 10 vendors are gearing up their efforts to develop commercial products. J-Phone and KDDI have not yet selected their vendors.
At CEATEC Japan 2000, an exhibition for communications equipment and consumer electronics held in Tokyo in October, a variety of innovative 3G cellular terminals were displayed.
NTT DoCoMo showcased a wristwatch-type wearable cellular terminal. Users turn the device off and on by touching their two fingers together. The wearable cellular terminal has a tiny microphone, which picks up a speaker’s voice, but there is no earphone or ear piece for transmitting the caller’s voice to the user’s ear. Rather, the user inserts his index finger into his ear, so the caller’s voice is transmitted from the tiny microphone on device to his ear through his hand.
The displayed model did not have an antenna. When the product is commercially available, an equipped antenna will pick up the counterpart’s voice and relay it to the user’s ear. NTT DoCoMo has not decided when it will commercially release the product.
NTT DoCoMo two years ago released a wristwatch-size PHS terminal that was used by the Olympics staff during the Nagano Winter Olympic Games in 1998. The unit is not commercially available.
NTT DoCoMo also displayed a PHS terminal that can download and replay music and another mobile terminal that can download and display short motion pictures. The carrier is planning to launch both music distribution and motion-picture distribution services by the end of this year.
J-Phone displayed a camera-equipped mobile phone. The terminal, called J-SH04 and manufactured by Sharp, has a tiny color complementary metal oxide semiconductor (CMOS) image sensor with 110,000 pixels. Users of the camera’s built-in cellular phone can take pictures and display them on the phone’s screen or send them to friends via e-mail. The carrier also exhibited a tiny color printer, which can print pictures taken with the camera phone in full color in 70 seconds. The carrier will market what it calls the world’s first camera with a built-in cellular phone in November.
KDDI displayed a new cellular phone that can replay music. The terminal, called the C404S DIVA and manufactured by Sony, has a slot for a Magic Gate Memory Stick, a storage device developed by Sony. Users can listen to music with the terminal by inserting the Memory Stick with a stored music piece into the cellular phone. The terminal does not have music download functions.
KDDI also demonstrated a tiny camera called Pasha Pa, manufactured by Kyocera, which can be used with a cellular phone. By connecting the tiny camera to a cellular phone, users can take a picture and display it on the phone’s screen. KDDI will begin marketing both the DIVA and Pasha Pa in November.
Further advances
In spite of their innovative functions, these units are all 2G terminals. For 3G services, vendors are developing more advanced, unique terminals.
NTT DoCoMo, the first planned 3G service provider, will release four types of 3G units in May 2001, with the launch of its 3G services. Basic terminals will be manufactured by Matsushita Communications, NEC and Nokia. Video phones will be manufactured by Matsushita, Fujitsu, Mitsubishi and Sharp. The carrier will also offer terminals with similarities to PC data cards and car navigation systems.
Because 3G services will initially be limited to the Tokyo metropolitan area, NTT DoCoMo plans to release dual-system terminals based on both PDC and widebandCDMA. Dual-system terminals tend to be heavier and bigger than other terminals, so the vendors’ skills for miniaturization will be tested.
Japanese vendors are in the final stages of developing 3G terminals. Their strategies and tactics are different. Matsushita Communications has 40 percent of the market for NTT DoCoMo terminals. For 3G services, Matsushita will focus on W-CDMA terminals, but is also planning to develop cdma2000 terminals, in addition to 1XRTT and High Data Rate (HDR) phones. Because the domestic handset market will be saturated, the vendor is targeting the worldwide market.
In the United States, Matsushita will supply terminals for AT&T Wireless later this year. In the 2.5-generation arena, it will offer terminals based on Enhanced Data Rates for Global Evolution (EDGE) and 1XRTT in 2002. The vendor is targeting to win 10 percent of the U.S. handset market by fiscal year 2004 and 15 percent of the worldwide handset market by fiscal year 2005.
NEC, which has 15 percent of the cellular terminal market in Japan, is currently selling popular small, light terminals with big screens. Besides terminals, including basic 3G phones for DoCoMo, NEC will provide infrastructure equipment, such as base transceiver stations (BTSs) and remote network controllers (RNCs) for DoCoMo. In the European market, the vendor is considering dual-mode terminals based on GSM and CDMA.
Fujitsu, one of the four so-called NTT “family vendors,” meaning it has a close partnership with NTT DoCoMo, has a small handset market share of 3 percent in Japan. The company will provide video phones for NTT DoCoMo in May 2001.
However, Fujitsu’s strength is in network products, and like NEC, it will also provide BTSs and RNCs for DoCoMo. While maintaining its close relations with NTT DoCoMo, the vendor will also explore the non-NTT market. In September, Fujitsu released a new “networking” PC called LOOX, a small PC with DDI Pocket’s PHS “Edge” service. Fujitsu is going to gear up its sales effort for LOOX using its nationwide distribution channel.
Non-NTT family firms such as Sanyo, Sharp and Sony are taking different approaches for 3G using their original technology and branding.
Sanyo is focusing on cdmaOne cellular terminals and PHS handsets. Riding on a rapid expansion of cdmaOne technology worldwide, the vendor is expanding its sales not only in Japan, but also in the United States, Canada and Hong Kong. It is targeting to sell 10 million handsets worldwide by 2001. At CEATEC, Sanyo displayed a unique 3G conceptual terminal with two screens.
Sharp plans to focus on the worldwide handset market by partnering with global players, such as Lucent Technologies and British Telecommunications. The vendor’s new flagship product Zaurus has a keyboard, an SD Memory Card slot and MP3 player functions as standard specifications.
Sony, with 6.7 percent market share in handsets in Japan, plans to pursue its strategies relying on its own technology and strong brand name. Sony’s Memory Stick product, a storage device, is the cornerstone of the firm’s handset strategy. Sony will release its Memory Stick-enabled cellular phone C404S
DIVA in November. Sony’s new palm device called Clie also has a slot for the Memory Stick.
Kyocera Corp., the parent company of KDDI, maintains 10.2 percent of the Japanese cellular terminal market. Through its cooperation with KDDI, the second-largest telecom company in Japan, the vendor plans to challenge NTT DoCoMo.
Hitachi and Toshiba, major manufacturers in Japan, are providing terminals only to non-NTT carriers. Hitachi is exclusively providing cdmaOne terminals to KDDI. Due to it cdmaOne concentration, Hitachi is now the largest vendor of cdmaOne terminals in Japan with sales of 1 million units in fiscal year 1999. The vendor is planning to release 1XRTT terminals in mid-2001 and hopes to bring its total handset sales to 1.2 million terminals in fiscal year 2000. It is also planning to develop HDR terminals.
Toshiba is supplying phones to both J-Phone and KDDI. Fully
using its strengths in technologies, such as Bluetooth, System LSI, MPEG4 and batteries, the vendor is target
ing to sell 10 million units of handsets in fiscal year 2000.
Mitsubishi Electric is focusing on GSM terminals. In Europe, where the vendor has a factory and a research and development center with a 400-person work force, it is selling GSM standard terminals under the brand name of Trium. The company aims to sell 27 million units in fiscal year 2000, including 15 million GSM terminals.
