NEC Corp, which makes cellular phones for Japan's NTT DoCoMo Inc, may build assembly plants in Europe to be closer to potential customers of handsets for faster wireless Internet access, NEC's president said.
"We are internally discussing how to broaden our global service and sales network" by moving production to Europe, Koji Nishigaki said in an interview. "We may make handsets overseas, though Japan will remain our major production center." NEC is hoping to translate its experience in Japan, where it makes handsets for the world's first high-speed Internet access service over mobile phones, to Europe, where Vodafone Group Plc and other European carriers will offer similar services. NEC now makes handsets in China and Japan.
Tokyo-based NEC has a head start over foreign rivals such as Nokia Oyj and Motorola Inc, which are behind Japanese phone makers in developing the new technology. However, NEC runs the risk of making a costly mistake if Europeans don't take to the new mobile-phone services, analysts say.
"NEC shouldn't be in a hurry," said Yoshihide Otake, an analyst at Tsubasa Research Institute, who rates the stock "average."
"European users aren't likely to find faster wireless services as attractive as the Japanese." Shipments of handsets compatible with the new technology, called wideband code division multiple access, are likely to reach 81.9 million units by 2005, 10 percent of all mobile-phone shipments, according to Nomura Research Institute. W-CDMA will eventually transmit data at up to 2 megabits a second, DoCoMo says.
NEC produced 13 million handsets -- 90 percent in Japan -- in the year ended in March, company spokeswoman Akiko Shikimori said.
* NEC produced 13 million handsets -- 90 percent in Japan -- in the year ended in March.
* The company expects output to rise 15 percent to 15 million this fiscal year, with 80 percent coming from Japan and the remainder from China and Taiwan.
* NEC wants to expand its share of the global market to about 15 percent within `a few years.'
The company expects output to rise 15 percent to 15 million this fiscal year, with 80 percent coming from Japan and the remainder from China and Taiwan, she said.
NEC, the No. 11 maker of handsets, wants to expand its share of the global market to about 15 percent within "a few years" to place among the top three makers, NEC's Shikimori said.
In Japan, some 3,300 testers randomly selected by DoCoMo began using W-CDMA phones from NEC and Matsushita Communication Industrial Co last month. Another 1,200 users will begin testing phones equipped with video screens this month. DoCoMo will begin its commercial service on Oct. 1.
Nokia had 30.6 percent of total global mobile phone sales of 412.7 million units in 2000, according to market researcher Dataquest Inc Motorola had 14.6 percent share and Ericsson AB -- which will combine its handset business with Sony Corp in October -- accounted for 10 percent of the market.
More than 80 percent of cellphones in Japan use technology unique to Japan, making it difficult for NEC and other Japanese vendors to sell handsets abroad.
Japanese makers and sellers of mobile phones face a dilemma of figuring out how much to invest in Europe, analysts said.
"NEC must want to strengthen European operations because it wants to gain customers from Nokia and Motorola," Ohtake said.
"But NEC could easily lose money if it invests too much." The Japanese company tried to make inroads into the European cell-phone market in 1987 only to give up in December to focus on advanced handsets that help connect to the Internet. The company sold its UK factory, which makes just voice-only phones, to Celestica Inc in December. The factory had 460 employees making up to 2 million units a year.
RSS