Since technology is almost meaningless without the phones, it also can be lonely to be a phone maker in a market where securing a cutting edge is the only pathway to success.
Recently, Sony Corp. and L.M. Ericsson teamed up to produce the Sony Ericsson phone as an answer to their Achilles’ heels in the market.
Last week, Japanese car component maker Denso entered an alliance with Kenwood and Kyocera to roll out a set of third-generation handsets to intensify the stakes for success in the 3G environment.
“Denso, Kyocera and Kenwood got together because it would be beneficial to all three,” said Denso spokeswoman Marlene Goldsmith.
Denso is emphasizing telematics as its area of comparative advantage.
“This is an attempt to boost its handset business by building relationships out there and get more clients,” said Ozgur Aytar, an analyst with the Strategis Group.
She said the move would enable the company to make more inroads into the telematics space.
“Denso Corp. will focus its telecommunications business on telematics in anticipation of the automobile industry’s rapid adoption of information technology,” said Denso in a statement.
According to the deals, Denso will work with Kyocera to develop and manufacture CDMA terminals for Japanese operator KDDI.
Denso said it will partner with Kenwood to develop and manufacture second-generation PDC terminals and next-generation wideband CDMA phones for J-Phone, which currently holds 16 percent of Japan’s mobile-phone market. By contrast, NTT DoCoMo owns a commanding lead of 60 percent of the market.
Denso said it decided to cooperate with Kyocera and Kenwood in order to share resources for telematics and market competitive wireless phone terminals.
“To date, a variety of onboard information terminals have appeared that provide a wide array of services,” commented Mitsuharu Kato, director of Denso and head of the company’s telematics business. “Telematics-related systems and products that Denso has introduced include car navigation systems that can operate in association with wireless phones, the Electronic Toll Collection systems that facilitate toll payment and fleet management systems.
Both Denso and Kenwood have had problems with their cell phones, which have flagged with huge financial losses. Denso’s cell-phone division suffered a loss of $81.7 million in its fiscal year, which ended in March. Kenwood has been searching for a formula to cut down its research and development costs since it recorded an $89 million loss last year.
Kyocera, which took over the phone business of Qualcomm Inc. last year, also has been looking for a comparative advantage for its phones. Aytar said the company is a new entrant in the United States and the new deal would help it improve its market share.
“In step with the progress of automotive information technology, Denso will develop the next generation of onboard information terminals in an effort to create more customer-friendly systems that link vehicles to information infrastructure through telecommunications,” noted Kato. “As a result, drivers will be able to access a variety of information services via the Internet.”
Prior to this agreement, Denso had rolled out its Map Code System, which enables easy identification of any location in Japan. “Conventional car navigation systems are unable to identify locations of which addresses or telephone numbers are not available, such as large sightseeing spots, rivers, ravines and airports,” said Kenji Oya, one of the company’s directors.
Aytar said partnerships are valuable models at this stage of the phone market.
“We’re going to see a lot of partnerships and manufacturers outsourcing their handset sections,” she said.
