UPDATE 2-Japanese firms seek Europe phone market share

Mon Feb 20, 2012 2:23pm EST

* Panasonic, Fujitsu plan wide European offering

* Panasonic aims to sell 1.5 mln phones in 1st year

* Fujitsu aims for over 10 pct share in 3-5 years -FT

By Tarmo Virki, European Technology Correspondent

Feb 20 (Reuters) - Japanese companies Fujitsu and Panasonic plan to enter the European smartphone market as rivals Apple and Samsung have piled on the pressure in their previously isolated home market.

Panasonic unveiled on Monday its Eluga model, marking its re-entry to the European market, and Fujitsu said it plans to roll out a wider portfolio of products in Europe.

Japanese handset makers have struggled to compete outside their home country, in part owing to a focus on technology for the domestic market, and analysts say they will likely also struggle this time to break into the tightly competed sector.

"The push into the European smartphone market makes sense given the limited room for growth back in Japan. However, the challenge they will face to gain traction is huge," said Dominic Sunnebo, analyst at research firm Kantar Worldpanel ComTech.

Last year Apple alone took a 10 percent share of the Japanese market, the third-largest smartphone market globally, according to research firm Strategy Analytics.

Panasonic will sell its Eluga model for slightly over 400 euros, excluding operator subsidies, from April. The model comes with a 4.3 inch touchscreen, uses a Texas Instruments processor and runs Google's Android software.

The company said it was the first of many new smartphones to its portfolio. Panasonic aims to sell 1.5 million smartphones in Europe during its next fiscal year to March 2013.

"(The) Western European market is saturated and very competitive. Why they would pick this market to try to find renewed growth is a mystery to me," said analyst Carolina Milanesi from research firm Gartner.

The smartphone market in Western Europe grew 12 percent last year to 97 million handsets, compared with 58 percent growth seen in the global market, according to Gartner. Samsung is the largest player on the market, followed by Apple and Nokia.

Fujitsu, already a large handset and tablet maker in Japan with about a fifth of the market, is also planning to bring a range of smartphones and tablets to the European market.

Fujitsu is still in negotiations with operators and specific launches and timetables are yet to be agreed upon, a spokeswoman for the company said.

Earlier the Financial Times said the company was targeting a "double-digit" market share in the next three to five years.

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