Tag: Samsung

  • Docomo postpones Tizen OS mobile handsets for the second time

    Docomo postpones Tizen OS mobile handsets for the second time

    Below are notes for an interview for the French newspaper LesEchos. The full article can be found here.

    On Thursday January 16th, 2014, NTT Docomo announced the postponement of mobile phone handsets based on the TIZEN operating system. This is actually the second time that NTT Docomo has postponed the planned introduction of TIZEN handsets, so it might become doubtful whether NTT Docomo will ever introduce TIZEN handsets.

    In the announcement NTT Docomo essentially said that with the current market situation in Japan, it makes no commercial sense for Docomo to introduce a third smartphone operating system to the market.

    The French journal Les Echos interviewed me about Docomo’s repeated postponement of TIZEN OS handsets. Here some notes I wrote up to prepare for the interview:

    1. Both for handset makers like HTC or Samsung and it would be a dream to become independent of OS owners/controllers like Microsoft or Google, and for mobile operators like Orange or Docomo, it would be a dream to have an OS they can control, and where they can introduce their own services like Docomo’s “iconcier” personal digital assistant, which is to some extent competing with Apple’s SIRI and with various Google services. Its a dream but realization is a different story. Its not enough to make and further develop and maintain the full OS stack including UI, create a development environment and SDKs as easy to use and competitive with Apple’s and Google’s, app stores, build a developer community who create lots of apps. Its also necessary to make a critical mass of attractive devices, gain a critical mass of market share, create global scale, and most importantly win over all the most important Apps like Facebook, LINE, etc.
    2. With the dramatically increasing complexity and sheer size of software, it becomes harder to bring mobile services to market without global scaleability, or at least a major part of the world, which usually will need to include China. Docomo does not have this global scale, so it will become harder and harder for Docomo to introduce own software services, such as iMode or iConcier.
    3. Docomo has continuously lost market share and recently even net subscribers, and in December for the first time in recent memory succeeded to gain top position in subscriber gains, surely because of the iPhone. In addition, rumors are that Apple demands very high minimum sales shares of operator partners. So Docomo is under double pressure:
      1. to satisfy contract conditions with Apple
      2. to maintain subscriber gains

      in addition, Docomo still has a substantial part of “iMode-keitai”, also called “galake” (= “Galapagos keitai”). So Docomo already has a large variety of OS and handset styles, and has recently reduced the number of different handset it supports, so going to Tizen would go against this trend.

    4. Its not the end of Tizen. Tizen can in addition to smartphones also go into embedded applications such as cars, elevators, washing mashines etc.

    Copyright 2014 Eurotechnology Japan KK All Rights Reserved

  • NEC smartphone termination, discussions with Lenovo failed

    NEC smartphone termination, discussions with Lenovo failed

    NEC smartphone – admits losing against competition from Apple and Samsung

    NEC smartphone – NEC used to be No. 1 in Japan’s “Galapagos keitai” market

    Just a few years ago, NEC was No. 1 in market share of Japanese pre-smart phone “Galake” (Galapagos-keitai, for a review of Japan’s Galapagos effect click here) super-feature phones.

    Recently NEC attempted negotiations with Lenovo, to jointly manage a new NEC-Lenovo smart phone joint-venture company, into which the NEC smartphone division would be merged.

    NEC reported that these negotiations with Lenovo had failed, and NEC now reports that it will terminate NEC smartphone production, but will continue to manufacture “Galake” feature phones. Our expectation is that NEC Galake feature phone production will also be terminated at some point in the not too distant future.

    NEC smartphone failure: What has caused NEC’s fall from No. 1 to an impending exit from the mobile phone sector? Several factors in our view:

    • NEC focused mobile phone production on Japan’s domestic market, especially NTT-docomo, since NEC is one of the NTT-Groups traditional suppliers, NEC thought that NEC will also remain among NTT-docomo’s preferred suppliers.
    • NEC failed to build viable global mobile phone business outside Japan. NEC hoped to ride NTT-docomo’s global introduction of i-Mode, supplying NEC-i-Mode phones via NTT-docomo to the world. However, since i-Mode’s global introduction failed, this strategy fell flat.
    • NTT-docomo recently decided to focus on two core handset suppliers: Samsung and SONY. Since NEC is not included in NTT-docomo’s two core handset suppliers, NEC essentially lost docomo’s sales support.
    • Unlike Google/Motorola and Apple, NEC does not control the OS-software, and therefore always depended on others to supply the OS software, which is of course an achilles’ heel type vulnerability. Still, Samsung is successful without using its own OS, although Samsung is working hard along various paths hoping to create a viable OS and ecosystem, such as Tizen.
    • Patents: NEC does not have a strong mobile phone patent position to stand up to Apple, Google or Samsung in the mobile phone patent wars.
    • Lack of scale: while NEC was a temporary No. 1 in Japan, NEC never had sufficient scale on a global level in mobile phones or smartphones.
    • Lack of focus: NEC is active in a large number of business areas, and smartphones is a small part of total activities of NEC. Thus NEC does not have the focus on smartphones which would be necessary to create global success. Probably NEC considers smartphones and feature phones a secondary business.
    • Neither has NEC sufficient financial strength to build a global smartphone business at this stage.

    Here is an overview of NEC’s financial performance over the last 15 years, the period FY1998 – FY2012

    NEC smartphone: During the 15 years FY1998-FY2012, NEC revenues declined from YEN 5000 Billion to YEN 3000 Billion, while reporting on average annual net losses of YEN 39 Billion/year.
    During the 15 years FY1998-FY2012, NEC revenues declined from YEN 5000 Billion to YEN 3000 Billion, while reporting on average annual net losses of YEN 39 Billion/year. source: https://www.eurotechnology.com/store/j_electric/

    For a detailed analysis of Japan’s electronics industry sector including NEC, see:

    Copyright (C) 2013 Eurotechnology Japan KK All Rights Reserved