Why Japan’s Cellphones Haven’t Gone Global?

TOKYO — At first glance, Japanese cellphones are a gadget lover’s dream: ready for Internet and e-mail, they double as credit cards, boarding passes and even body-fat calculators.

But it is hard to find anyone in Chicago or London using a Japanese phone like a Panasonic, a Sharp or an NEC. Despite years of dabbling in overseas markets, Japan’s handset makers have little presence beyond the country’s shores.

“Japan is years ahead in any innovation. But it hasn’t been able to get business out of it,” said Gerhard Fasol, president of the Tokyo-based IT consulting firm, Eurotechnology Japan.

The Japanese have a name for their problem: Galápagos syndrome.

Japan’s cellphones are like the endemic species that Darwin encountered on the Galápagos Islands — fantastically evolved and divergent from their mainland cousins — explains Takeshi Natsuno, who teaches at Tokyo’s Keio University.

This year, Mr. Natsuno, who developed a popular wireless Internet service called i-Mode, assembled some of the best minds in the field to debate how Japanese cellphones can go global.

“The most amazing thing about Japan is that even the average person out there will have a superadvanced phone,” said Mr. Natsuno. “So we’re asking, can’t Japan build on that advantage?”

The only Japanese handset maker with any meaningful global share is Sony Ericsson, and that company is a London-based joint venture between a Japanese electronics maker and a Swedish telecommunications firm.

And Sony Ericsson has been hit by big losses. Its market share was just 6.3 percent in the first quarter of 2009, behind Nokia of Finland, Samsung Electronics and LG of South Korea, and Motorola of Illinois.

Yet Japan’s lack of global clout is all the more surprising because its cellphones set the pace in almost every industry innovation: e-mail capabilities in 1999, camera phones in 2000, third-generation networks in 2001, full music downloads in 2002, electronic payments in 2004 and digital TV in 2005.

Japan has 100 million users of advanced third-generation smartphones, twice the number used in the United States, a much larger market. Many Japanese rely on their phones, not a PC, for Internet access.

Indeed, Japanese makers thought they had positioned themselves to dominate the age of digital data. But Japanese cellphone makers were a little too clever. The industry turned increasingly inward. In the 1990s, they set a standard for the second-generation network that was rejected everywhere else. Carriers created fenced-in Web services, like i-Mode. Those mobile Web universes fostered huge e-commerce and content markets within Japan, but they have also increased the country’s isolation from the global market.

Then Japan quickly adopted a third-generation standard in 2001. The rest of the world dallied, essentially making Japanese phones too advanced for most markets.

At the same time, the rapid growth of Japan’s cellphone market in the late 1990s and early 2000s gave Japanese companies little incentive to market overseas. But now the market is shrinking significantly, hit by a recession and a graying economy; makers shipped 19 percent fewer handsets in 2008 and expect to ship even fewer in 2009. The industry remains fragmented, with eight cellphone makers vying for part of a market that will be less than 30 million units this year.

Several Japanese companies are now considering a push into overseas markets, including NEC, which pulled the plug on its money-losing international cellphone efforts in 2006. Panasonic, Sharp, Toshiba and Fujitsu are said to be planning similar moves.

“Japanese cellphone makers need to either look overseas, or exit the business,” said Kenshi Tazaki, a managing vice president at the consulting firm Gartner Japan.

At a recent meeting of Mr. Natsuno’s group, 20 men and one woman crowded around a big conference table in a skyscraper in central Tokyo, examining market data, delivering diatribes and frequently shaking their heads.
The discussion then turned to the cellphones themselves. Despite their advanced hardware, handsets here often have primitive, clunky interfaces, some participants said. Most handsets have no way to easily synchronize data with PCs as the iPhone and other smartphones do.

Because each handset model is designed with a customized user interface, development is time-consuming and expensive, said Tetsuzo Matsumoto, senior executive vice president at Softbank Mobile, a leading carrier. “Japan’s phones are all ‘handmade’ from scratch,” he said. “That’s reaching the limit.”

Then there are the peculiarities of the Japanese market, like the almost universal clamshell design, which is not as popular overseas. Recent hardware innovations, like solar-powered batteries or waterproofing, have been incremental rather than groundbreaking.
The emphasis on hardware makes even the newest phones here surprisingly bulky. Some analysts say cellphone carriers stifle innovation by demanding so many peripheral hardware functions for phones.

The Sharp 912SH for Softbank, for example, comes with an LCD screen that swivels 90 degrees, GPS tracking, a bar-code reader, digital TV, credit card functions, video conferencing and a camera and is unlocked by face recognition.
Meanwhile, Japanese developers are jealous of the runaway global popularity of the Apple iPhone and App Store, which have pushed the American and European cellphone industry away from its obsession with hardware specifications to software. “This is the kind of phone I wanted to make,” Mr. Natsuno said, playing with his own iPhone 3G.

The conflict between Japan’s advanced hardware and its primitive software has contributed to some confusion over whether the Japanese find the iPhone cutting edge or boring. One analyst said they just aren’t used to handsets that connect to a computer.

The forum Mr. Natsuno convened to address Galápagos syndrome has come up with a series of recommendations: Japan’s handset makers must focus more on software and must be more aggressive in hiring foreign talent, and the country’s cellphone carriers must also set their sights overseas.

“It’s not too late for Japan’s cellphone industry to look overseas,” said Tetsuro Tsusaka, a telecom analyst at Barclays Capital Japan. “Besides, most phones outside the Galápagos are just so basic.”

Pakistan UAV Project

Mechatronics systems are taking the world by storm. Manual work is being replaced by automatic machines that yield efficiency, repeatability and cost‐effectiveness. One area wherein a lot of progress has been done is unmanned ground, marine and aerial systems. Armies of the future are aiming towards ‘mechatronization’ of their fighting force which can give them a decisive advantage over their rivals in the battlefield.

Unmanned aerial systems have been successfully deployed by several countries around the world. In Pakistan, an earnest effort is being made to develop unmanned aerial vehicles (UAV) and bring them at par with the advanced UAV squadrons of the developed countries. One such initiative is being taken at the Mechatronics Department, College of E&ME, National University of Sciences and Technology. A team headed by Col. Dr. Javaid Iqbal is undertaking a project to develop an autopilot system in order to transform an RC airplane into an autonomous aerial vehicle capable of flying to designated waypoints without human intervention or guidance whilst avoiding obstacles and also have the capability to search and identify designated target buildings in an area of interest. Asad Ullah Awan and Sheir Afgen Zaheer are two research engineers working on this project.

UAV’s would be preferred over remote controlled vehicles as they are independent of human assistance. Given this, they can monitor large amounts of data for extended periods unaided by humans. Also the vehicle may be sent deep into harsh environments impossible for the human body to withstand. Furthermore, they will not be bound by the range of wireless network, which usually is restricted. Finally, the human independence factor also allows us to design vehicles of varying sizes, i.e., one may design thousands of micro UAV's, which may be used in a variety of military and commercial applications.

For this purpose, a mathematical model of the airplane was used to simulate its dynamics over a certain flight envelope. A flight control system for the autopilot was designed, tested and tuned in the MATLAB environment on the mathematical model of the airplane. Data coming from the sensors onboard the aerial vehicle is always vulnerable to noise. To tackle this problem, noisy sensory data was simulated in the MATLAB environment and a multisensory Kalman Filter based localization module was developed in order to estimate the status of the vehicle at any given instant from the onboard sensory data. The control system and localization module were integrated and tested on the dynamics model of the airplane. The modules were then implemented in C++ in the Linux operating system. A target tracking module has also been developed and tested in the MATLAB environment.

The project is currently in its implementation phase. The control system and localization modules have been ported onto a single board computer running the Linux operating system. Work has also been carried out to stream video feed from onboard cameras to a ground station terminal via a wireless link.

A research paper titled "Autonomous Control for a Kadet MKII RC airplane" has also been published in the Proceedings of the IEEE International Conference on Emerging Technologies, October 2008. The group aims to participate in the International Aerial Robotics Contest at Georgia Tech, USA in the near future.

Telenor and China Mobile ~ Merger ?

Few days back, there was rumour on TGP of possible merger of Telenor and Zong. Dawn News has conformed of possible merger negotiations.

According to sources, Telenor group is interested to sell its shares in Pakistan and is holding talks with the China Mobile.

Though both the operators have denied any such development, sources said that negotiations were being held secretly at the group level.

Though Telenor, a Norwegian company, has a subscriber-base of 20 million or so in Pakistan, it has been deliberating to sell its management shares since long because of ‘security issues’.

The Telenor group has already focused on India for investment, as it recently sought to buy about 67 per cent shares of Unitech Wireless and telecom arm of Unitech Ltd in India.

The Indian market is experiencing a major growth in mobile penetration and currently it stands at 27 per cent with a total population of about 1.2 billion.

There has been a lot of potential in the market and the global operators see it a best place for future market.

China Mobile’s first international business venture, Zong, currently has over six million subscribers.

Before the merger talks with the Telenor group, the China Mobile had offered to buy the management shares of Warid Telecom Pakistan.

However, deal could not materialise owing to price issue.

Mobilink, Telenor, Ufone, Warid and Zong (CM-Pak) have reportedly conveyed to the PTA that there was a room for only ‘four’ players.

A PTA official said there were chances that by 2010, the country may have four operators.

The number of cell-phone users in Pakistan has reached over 90 million. Though Average Revenue Per User (ARPU) shows declining trend over the last few years, aggressive marketing and expansion of network has enabled mobile operators to grab more subscribers on their networks.