By Sophie Knight
TOKYO, Sept 11 The decision by Japanese mobile
carriers to offer the newly unveiled 5C, a lower-end handset
that was expected to be released only in emerging markets, will
likely seal the fate of troubled Japanese handset makers as it
erases their price advantage.
The likes of Sharp Corp and Fujitsu Ltd
are also threatened by NTT DoCoMo Inc's decision to
offer the iPhone for the first time to its roughly 60 million
subscribers after haemorrhaging customers to iPhone-touting
rivals SoftBank Corp and KDDI Corp
Although it had been speculated that Apple would release a
low-end iPhone for emerging markets, some were surprised that
the less expensive plastic 5C, unveiled on Tuesday, will be
offered by DoCoMo and the other two major Japanese carriers.
"Japanese handset makers are already bound for extinction
and this will just accelerate that process," said Mitsushige
Akino, chief fund manager at Ichiyoshi Investment Management.
Now Sharp, Fujitsu and Kyocera Corp, which have
seen their market share shrink as the iPhone grew to claim more
than a quarter of the Japanese smartphone market, could go the
same way as NEC Corp, which is pulling out of handsets,
or Panasonic Corp, which is cutting back.
Until now, Japanese handset makers had been somewhat
shielded from the threat of the iPhone under the auspices of
DoCoMo, which promoted their devices to its massive user base in
the absence of an Apple product.
For example, Sony Corp 's Xperia A sold 1.3 million
units this summer in Japan, briefly overtaking the iPhone as the
most popular handset as DoCoMo discounted it as one of its top
With more than half of DoCoMo subscribers considering buying
an iPhone even before the carrier announced it would offer the
handset, according to a survey conducted by Tokyo-based IT
consultancy MMD, domestic handset makers could see their sales
That could be exacerbated if the 5C is sold for a price that
competes with low to middle-end smartphones. Although Japanese
carriers have yet to detail their pricing plans, the handset
will retail at $99 on a contract with U.S. carriers, compared to
$199 for the 5S.
DoCoMo will still promote handsets from Sharp, Fujitsu and
Sony as its top picks for winter, but any boost to sales is seen
"You're going to see a lot of Android users switch to the
iPhone," said Atsuro Sato, an analyst at research firm Gartner
in Tokyo. "I think the winter campaign's effect will be limited.
It looks like Kyocera, which is betting on its overseas
prospects, is the safest among Japanese makers."
Japanese suppliers for iPhone parts, however, could benefit
if the cheaper model is a hit in emerging markets, analysts say.
On the other hand, if its price tag of $733 for an unlocked
phone in China proves prohibitive, parts makers' margins may be
On Wednesday afternoon, share prices of Apple suppliers
Taiyo Yuden Co Ltd, Murata Manufacturing Co Ltd
and Ibiden Co Ltd were down between 1.4 and
2.5 percent, underperforming a 0.8 percent rise in the Nikkei