Vodafone Group Plc's bid to turn mobile phones into portable game players and digital cameras may be tested next year, judging from the experience of Japan's mobile-phone operators, investors say.
Nokia Oyj, Motorola Inc and other handset makers are in the midst of releasing new models with larger color screens and built-in cameras in the hopes of stoking demand. In turn, phone operators such as Vodafone, the world's biggest mobile-phone company, and Sprint Corp want to use the new services to offset shrinking revenue from voice calls.
In Japan, the introduction of picture messaging and video games two years ago proved new features could stem a slump in handset sales. Now, operators such as Vodafone's J-Phone Co, NTT DoCoMo Inc and KDDI Corp are finding new services aren't enough.
Their answer: promotional campaigns to retain subscribers and to court consumers reluctant to buy new handsets.
"More and more, operators and handset makers are going to have to come up with new ideas in order to win the loyalty of their customers," said Nahoko Mitsuyama, an analyst at research company Gartner Japan Ltd. "They're going to face another tough year next year."
The global handset market shrank last year for the first time in its history. Sales sputtered again this year as economic growth slowed and consumers saw few reasons to buy new handsets.
While phones with color screens and cameras helped lift global mobile-phone sales by 7.8 percent in the third quarter -- their biggest gain in 18 months -- sales may run out of steam after rising this quarter and next, Gartner said last month.
Gartner expects global handset sales of between 415 million and 420 million in 2002, up from 400 million last year.
To appeal to fickle customers tired of downloading video games and browsing Web pages on tiny screens, Vodafone's Japanese mobile-phone unit started mailing a gift kit containing a neck strap and a diary with a Vodafone logo to 50,000 of its heaviest users on Nov. 1.
The effort was the result of a special marketing division J-Phone formed late last year to look at subscribers' billing trends and ways to reward those users who regularly have the highest phone bills.
J-Phone, a unit of the world's largest mobile-phone operator, DoCoMo and KDDI are wise to focus more on retaining their subscribers, analysts and investors say.
Six of every 10 people in Japan own a cellular phone, according to subscriber records from the country's three largest mobile-phone operators.
One of the best hopes for phone operators to boost profits next year may be by identifying their heaviest users and making sure they don't defect to rivals offering cheaper calling rates.
"The growth period is over, so customer retention, or cancellation reduction, will be the key to success next year," said Michitaka Kato, who oversees Japanese Yen 15 billion (US$125 million) in assets at Japan Investment Trust Management Co. "The road ahead for Japanese carriers will be severe."
To retain users, DoCoMo plans to offer "a series of customer-oriented" services, even if revenue is hurt, DoCoMo President Keiji Tachikawa said two weeks ago.
DoCoMo, which once dominated Japan's US$70 billion cellular-phone market with a 70 percent share, saw its grip on Japan's 72 million cell-phone users shrink to 58.3 percent last month.
"The time has come for DoCoMo to start seriously thinking about how to keep their custom-ers," Merrill Lynch Japan Ltd. analyst Yasumasa Goda said. "They didn't have to care about it before," when the company's i-mode Internet service fueled growth. More than 35.8 million people now use DoCoMo's i-mode.
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has appointed Rose Castanares, executive vice president of TSMC Arizona, as president of the subsidiary, which is responsible for carrying out massive investments by the Taiwanese tech giant in the US state, the company said in a statement yesterday. Castanares will succeed Brian Harrison as president of the Arizona subsidiary on Oct. 1 after the incumbent president steps down from the position with a transfer to the Arizona CEO office to serve as an advisor to TSMC Arizona’s chairman, the statement said. According to TSMC, Harrison is scheduled to retire on Dec. 31. Castanares joined TSMC in
EUROPE ON HOLD: Among a flurry of announcements, Intel said it would postpone new factories in Germany and Poland, but remains committed to its US expansion Intel Corp chief executive officer Pat Gelsinger has landed Amazon.com Inc’s Amazon Web Services (AWS) as a customer for the company’s manufacturing business, potentially bringing work to new plants under construction in the US and boosting his efforts to turn around the embattled chipmaker. Intel and AWS are to coinvest in a custom semiconductor for artificial intelligence computing — what is known as a fabric chip — in a “multiyear, multibillion-dollar framework,” Intel said in a statement on Monday. The work would rely on Intel’s 18A process, an advanced chipmaking technology. Intel shares rose more than 8 percent in late trading after the
FACTORY SHIFT: While Taiwan produces most of the world’s AI servers, firms are under pressure to move manufacturing amid geopolitical tensions Lenovo Group Ltd (聯想) started building artificial intelligence (AI) servers in India’s south, the latest boon for the rapidly growing country’s push to become a high-tech powerhouse. The company yesterday said it has started making the large, powerful computers in Pondicherry, southeastern India, moving beyond products such as laptops and smartphones. The Chinese company would also build out its facilities in the Bangalore region, including a research lab with a focus on AI. Lenovo’s plans mark another win for Indian Prime Minister Narendra Modi, who tries to attract more technology investment into the country. While India’s tense relationship with China has suffered setbacks