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Mobiles Fast Becoming Pocket-size Computers (July 17, 2003)

The owner of this cellphone uses it to take her picture.
Cellphone companies are engaged in a fiercely fought race to add new advanced functions to their handsets. The first new battleground is the task of enhancing the built-in cameras many phones now feature from the previous 300,000-pixel level to the one-megapixel level that puts them on a par with some digital cameras. Among the functions found on some recently unveiled handsets are infrared remote control, fingerprint recognition, electronic books, and MP3 players. A gadget that began life as a mere phone is fast evolving into a pocket-size computer with which people can perform many of the tasks of modern life. As more than 60% of Japanese people already own a mobile phone, there is little scope for finding brand new customers, so in order to come out on top it is essential for firms to entice existing users to upgrade their phones by adding new features and making handsets as advanced as possible. Handset makers are also broadening their formerly domestic-centered focus by looking to overseas markets for new opportunities, and the fierce competition for users looks set to spread worldwide.

Picture Quality to Rival Digital Cameras
The standout products among the new models unveiled in late May by cellphone providers were those featuring built-in cameras with resolutions of over one megapixel (1,000,000 pixels), which produce pictures far superior to those taken with previous models with resolutions of up to 300,000 pixels. Just like previous models, these high-resolution cameras enable users to have fun viewing their photos on the handsets' liquid-crystal screens and sending them to their friends' phones; what is new is that the quality of the pictures they produce is high enough to save the data on a small memory card and get them printed at a photo lab. Photos can even be turned into stickers using automatic printing machines installed in places like amusement arcades and shopping malls. Most mobile phones in Japan are of the folding type, and some of the new models can take photos even in the folded position, enabling users to press the shutter while supporting the device with both hands, just like an ordinary camera. Industry insiders are confident that the market for camera-phones will overtake that for disposable point-and-shoot film cameras.

wristwatch phone
Calling Dick Tracy? The new wristwatch phone. (Jiji)

The development of other features is also proceeding apace. Some of the latest handsets can be used in place of an infrared TV remote control, while others feature fingerprint recognition, enabling users to prevent the addresses and other information stored on their phones from being accessed by other people. Some models enable users to consult electronic dictionaries and read electronic books or to plug in earphones and listen to music stored on a memory card.

One of the most innovative new features is a speaking phrasebook, which "says" useful phrases in English, Chinese, and Korean, helping users to perform tasks like booking a hotel room or shopping when traveling abroad. Many new models have a function that uses global positioning satellite data to gauge, at the press of a button, the exact location of the user and display a map of the surrounding area. These maps can even be e-mailed to other phones, making them ideal for people meeting up in a crowded or unfamiliar place. Meanwhile, for people who want to know that their phones are within reach at all times, the wristwatch-shaped PHS (personal handyphone system) - which changes shape into a regular phone at the touch of a button - is a popular choice. Wristwatch phones are currently only available to PHS users, but progress in miniaturizing technology is so fast that users of other mobile-phone systems are sure to benefit soon.

Manufacturers Look to Overseas Markets
Behind this battle among cellphone providers to add more and more advanced functions to their handsets lies the saturation of the mobile phone market. As of the end of April, there were 81.78 million cellphone and PHS contracts in effect in Japan, a number equivalent to 64.1% of the country's population. With so many people already in possession of a mobile phone, there is little prospect of firms attracting large numbers of new users. They must instead add more functions and other attractions in order to encourage users to switch to newer models.

As the first provider to begin offering camera-phones in November 2000, J-Phone Co. succeeded in increasing its popularity, especially among young people, and raising its share of the total number of contracts in Japan by 2.1 percentage points in the space of two years. Other companies have since followed suit in adding cameras to their handsets, leading to the competition seen today.

Thanks to this race to innovate, Japanese handset makers lead the world in camera-phone technology. Using this technology as a springboard, Japanese manufacturers are stepping up their efforts to break into overseas cellphone markets with what has been, until now, a product targeted squarely at domestic consumers. Matsushita Electric Industrial Co. (which operates worldwide under the name Panasonic) has beefed up its sales systems in China and Europe with the aim of increasing its current global market share of 3.1% to double figures by fiscal 2005 (April 2005 to March 2006), while NEC Corp. is also focusing on these two markets in its efforts to boost sales. Sanyo Electric Co. began shipping camera-equipped phones to a major American telecommunications firm in autumn 2002, while Kyocera Corp. plans to enter the US market with camera-phones and other advanced products in autumn 2003.

For the electronics makers in Japan and abroad that develop and produce handsets as requested by cellphone providers, however, handsets with more numerous and advanced functions mean that more and more time and money must be spent on procuring camera parts and electronic data-processing components. Despite these costs, manufacturers are still expected to unveil new models about once every six months. The companies that triumph in this unforgiving market will be those that successfully combine - in the limited time available - the twin tasks of enhancing handset functionality and reducing costs.

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Related Web Sites
J-Phone Co.
Matsushita Electric Industrial Co.
NEC Corp.
Sanyo Electric Co.
Kyocera Corp.

Copyright (c) 2004 Web Japan. Edited by Japan Echo Inc. based on domestic Japanese news sources. Articles presented here are offered for reference purposes and do not necessarily represent the policy or views of the Japanese Government.

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