Europe’s Smartphone Market Awaits the Re-Entry of Once-Powerful Brands
This week seems to be the one in which Japanese companies formally unveil their intention to return to the European smartphone market. Fujitsu was first out the blocks, revealing in the Financial Times that it will offer a “range of high-end mobile devices for both Android and Windows operating systems”. This was quickly followed by an announcement of Panasonic’s Eluga smartphone. Rumour has it other companies, such as Casio and NEC, are poised to re-enter the European market as well.
This flurry of announcements is no accident. The Japanese government and big Japanese companies such as NTT DoCoMo are facing up to the reality that their home market has flat-lined. Worst still, the potential market is shrinking. According to the country’s Health and Welfare Ministry, Japan’s population will drop by about 1 million people annually for the next few years. Currently a quarter of the population is over 65 and it is estimated that by 2060 a staggering 40 percent of the population will fall into this category.
Large Japanese consumer electronics giants need future growth from foreign markets and the vibrant telecommunications sector has been selected to help fuel this growth.
The irony is that when I first entered the industry in the early 1990s, Japanese brands like NEC and Panasonic were kings of the hill. My first mobile phone was an NEC P4 on the analogue ETACS network and it was one of the hottest phones available. Over the next few years I also used a number of Panasonic phones. Sadly, the Japanese failed to move with the times. NEC missed the transition to digital networks and this misstep cost it dearly. Panasonic and others failed to listen to customers, and refused to tailor devices and user interfaces to local tastes. This meant their market shares dwindled and they were forced to retreat.
Those leading the charge back into Europe have clear lessons to learn from these historic mistakes. Problems with user interfaces should be mitigated by the use of Android, but that could be a double-edged sword, given Android’s tendency to stifle differentiation.
Furthermore, even if Japanese manufacturers can deliver best-in-class products with ultra-thin design and features such as waterproofing, getting back into the market will be a Herculean task. Selling phones has never been more competitive and operators are keen to cut the number of manufacturers and phones in their ranges, not increase them. In addition, the barriers to entry are immense. Eye-watering marketing budgets are expected to accompany new smartphones and one only has to look at the colossal spending by Samsung to see what new players are up against. Add to that ever-shrinking margins and the emergent threat of Chinese manufacturers such as Huawei and ZTE, and I’ve got to say I’m worried that any of the Japanese brands will be able to rediscover the glory they enjoyed two decades ago.
Subscribe to our blog
Make sure you don't miss out on our fresh insights on topical news in the connected world
"*" indicates required fields