Following NEC's announcement last week that it will exit the mobile phone market, there are rumors that Panasonic is also about to stop supplying smartphone devices to NTT DoCoMo, Japan's largest carrier. Considering Panasonic's severe losses last year, this year they have finally achieved profitability through cost-cutting measures. However, as the third largest mobile phone provider in Japan in 2012, Panasonic's withdrawal from the domestic smartphone market has come as a surprise.
At one point, Japanese mobile phones represented for me something wonderful and distant. I used to envy the Japanese who used devices with amazing specifications, beautiful designs, and incredibly low contract prices. Back then, if any flagship model was announced, its specs would only match the level of Japanese phones from the previous year. Before the iPhone, Japanese phones could already conveniently watch TV, provide GPS navigation, enable NFC payments, and check emails. At the time, most smartphones were clunky, large, and black, but mentioning you had a Sharp phone would immediately define you as a trendsetter rather than an ordinary person. Japan was the coveted destination for many phone enthusiasts.
However, that was during the era of feature phones. Now, we no longer need to elaborate on how the iPhone and Android have transformed the way Japanese people use their phones. In 2012, the iPhone became the best-selling phone in Japan (combining both feature and smartphones). The country’s largest carrier, NTT DoCoMo, sought powerful weapons to counter the iPhone, not from Sharp, but from South Korea's Samsung and internationally-backed Sony — remember, in the days when Japanese phones dominated, these two were absolutely insignificant players in Japan.
The reason is simple: Japan never lacked phones as beautiful as the iPhone, but in the smart era where ecosystems reign supreme, everything revolves around the system, and it is clear that Japan lacks this advantage. This year, Apple and Samsung have almost divided the profits of the mobile phone industry between them. The success of iOS and Android phones has resulted in the once profitable domestic phone manufacturers losing competitiveness due to their isolationist policies. A few years ago, the closed Japanese manufacturers began to change, embracing Android, but their biggest problem was not whether to use a new system or whether the CPU was quad-core.
Their biggest problem was that their products had already fallen out of the global consumer's view.
Ten years ago, Japanese mobile phone manufacturers could proudly claim that even international giants like Motorola and Nokia left Japan defeated, seeing the "isolation" of Japanese phones as a sign of strength. Currently, once the fortress of closed operation was breached, the unprotected Japanese phones faced an awkward situation: in the past, you kept world consumers at arm's length, today your products cannot capture the attention of world consumers; under intense domestic competition, phone manufacturers struggle to maintain profitability, and when looking towards the international market, they realize they are too late. NEC was one of the earliest Japanese phone manufacturers to embrace the smart era. In 2010, it formed a new alliance with Casio and Hitachi called NEC Casio Hitachi Communications, hoping to survive in the fiercely competitive Japanese mobile phone market, but the "strong alliance" did not reverse its tragic fate.
As phones become more PC-like, operating systems and hardware configurations have become highly standardized. Without market support, electronic powerhouses like NEC, Casio, Hitachi, and Panasonic have successively withdrawn. So, what remains?
Pity, pity!
Cover image from: Brickshelf, NTT DoCoMo