A Japanese executive holds back tears as he watches his infant son take his first step -- all by watching a video on the screen of his mobile phone.
Vodafone Group Plc's latest ads in Japan feature clean-cut, young professionals exchanging video clips using handsets with built-in cameras. Gone is Norika Fujiwara, the model-actress whose appeal helped make the product of Vodafone's J-Phone Co a hit among the country's teenagers.
The campaign is a sign that Europe's largest wireless phone company is courting the traditional customers of Japan market leader NTT DoCoMo Inc as it tries to boost the No. 3 operator's 17 percent market share. Advertising executives say the image shift won't be easy.
"Trendy young girls, easy to use, cost effective" are words that sum up J-Phone's image, said Gary Nevin, a Tokyo-based brand consultant at FutureBrand Inc, a unit of Interpublic Group Cos Inc the world's largest advertising agency. "Repositioning the brand is going to be seriously difficult."
Trendy may not be good enough anymore. Growth in Japan's cellphone market is slowing. In March, mobile-phone shipments shrank by almost half compared with a year ago, declining for a 10th straight month, the Japan Electronics and Information Industries Association said.
Faster wireless Internet access, phones loaded with location finders and digital cameras aren't much help either. Japan's three largest mobile-phone companies all added fewer new customers in April, a sign the country's US$70 billion cellphone market is reaching saturation.
J-Phone isn't immune. The company added 9 percent fewer new users last month than the year-earlier month. And J-Phone's users don't spend as much as subscribers to the services offered by DoCoMo or No. 2 cellphone service provider KDDI Corp.
According to figures released in November, J-Phone's subscribers spend about Y7,900 (US$63) a month on phone services, compared with more than Y8,000 for its rivals.
Moreover, the company doesn't have DoCoMo's deep advertising pockets. J-Phone has a marketing budget about a third DoCoMo's, said Kenji Nakamura, general manager of J-Phone's marketing communications department, who was hired from advertising agency Ogilvy & Mather in December to help J-Phone make more with less.
"With a much smaller budget than DoCoMo, the challenge is to be more efficient," Nakamura said.
To compete against DoCoMo and KDDI, J-Phone was the first in Japan to introduce handsets with built-in digital cameras. The result, before last month's decline, was that J-Phone added more new subscribers than a year earlier, while the pace of growth slowed at rivals.
Now, the novelty of J-Phone's camera phones may be wearing thin. DoCoMo started a high-speed Internet service in October last year that also allows trading video clips. KDDI introduced a camera phone in April and is already operating a high-speed service. What's more, J-Phone delayed the commercial rollout of its own quicker service until December.
J-Phone will need to offer incentives to win market share, said Peter Yeh, who helps manage US$7.5 billion in assets at Merrill Lynch Investment Managers Co.
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