[photopress:pansonic.jpg,full,alignright]To make it in mobile phones you have to be very, very big or very, very specialised. Quite large is not good enough. Sort of different, does not help. Even our model, either catching or throwing her Panasonic, is not going to change the sales picture enough.
And so we have NEC of Japan, Taiwan’s BenQ and China’s Ningbo Bird in strife for they simply do not have the scale of production and distribution to compete with leaders like Nokia and Motorola.
Just possibly some could survive by doing major partnership deals with the companies who are making the momey, the telecoms carriers. Japan’s top mobile phone supplier Sharp works with Britain’s Vodafone while Toshiba has partnered with Orange in Spain and France. But there is no suggesion of exclusivity. I use the Vodafone network in Britain, but on my Nokia. My son uses Orange, but on another Nokia.
Bengt Nordstrom, chief strategy officer with research firm inCode, said, ‘The trend is that regional players are struggling and global players are winning. For a smaller Asian handset maker to compete with Motorola and Nokia in the low-end segment is almost mission impossible.’ (Incidentally, Google has worked out the figures and has categorically denied it will ever launch a mobile phone. Software working on such a phone, yes. A mobile phone, no. Possibly Apple, with its mad fanatical followers is the only company that could pull off this trick. Certainly Microsoft would not be in the race.)
Some of the small players, especially in South Korea, have nearly gone. Pantech and Curitel look sick while VK Corporation, once known for its ultra-slim phones, was placed under court receivership this month.
BenQ, Taiwan’s top mobile phone vendor, posted its fifth straight quarterly loss earlier this week. And it has other problems which worsen the situation. Even if you box in the welterweight division you are not big enough. Motorola warned last week of a first-quarter loss and a worse-than-expected 2007 outlook.
Meanwhile rubber boot and ice-breaker maker (true) the Finnish founded Nokia, expanded its market share in mobile phones last year (rubber boots did not do so well), while Sony Ericsson overtook South Korea’s LG Electronics to grab fourth position.
To get the figures in perspective the smaller Japanese cellphone makers command less than 1% share of the global market and the direction is down.
So what could save them? Totally amazing breakthrough technology. Which comes down to pretty much eternal-life batteries or super-sharp, super-massive screens or super-transmission speeds or something else which I simply do not have the wit to imagine.
Many Chinese mobile phone makers, with less than 1% share globally, will have to exit the market or merge with rivals. Analysts estimate that in China at least 35 domestic brands exist. And the outlook for them is weak compared with Nokia and Motorola.
A handful of Chinese phone makers such as Lenovo, ZTE and Huawei, which supply reliable and feature-rich handsets at reasonable prices to operators in Europe, Latin America and Africa, will undoubtedly hack it, but their small scale — everything here is relative — will still limit their global reach.