TOKYO NTT DoCoMo Inc (9437.T), Japan's largest mobile operator, will select Sony Corp (6758.T), Sharp Corp (6753.T) and Fujitsu Ltd (6702.T) smartphone models for its main winter product lineup, sources familiar with the situation said.
Samsung Electronics Co Ltd (005930.KS), which along with Sony supplied one of the two models for the main summer range, will be excluded as it lacks a new flagship model for the winter, and after its Galaxy S4 fell short of DoCoMo's summer target despite strong sales for Sony's Xperia A, the sources said.
The move could be a major boon for Sharp, Japan's largest display maker and an Apple Inc (AAPL.O) supplier that was bailed out by its banks last year and is expected to issue new shares this year to shore up its weakened finances.
Representatives for DoCoMo, Sony, Sharp and Fujitsu declined to comment. No comment was immediately available from Samsung Electronics.
Details of DoCoMo's winter promotion have yet to be hammered out, the sources said. It is expected to be similar to the summer program in which the carrier offered discounts on only two handset models.
Sony profited handsomely from the campaign. A jump in smartphone sales helped to power its electronics division to a profit last quarter for the first time in two years.
Samsung's high-spec, relatively expensive Galaxy S4, however, fared poorly - especially against the home-turf Sony brand - in a promotion aimed at luring feature phone users to smartphones. Samsung has sold fewer than 700,000 phones in the campaign, short of the 1 million target and 1.3 million for Sony's Xperia A - DoCoMo's fastest-selling handset ever.
The sources said that, while DoCoMo would not include Samsung's Galaxy series in its smartphone promotion for this winter, it would continue offering the company's products when they are launched for the Japan market.
Japan's handset makers have been struggling to compete with global smartphone leaders Apple and Samsung. DoCoMo, the only one of Japan's three mobile carriers not to offer Apple's iPhone, remains the Japanese manufacturers' best customer, and while industry executives do not expect a DoCoMo-iPhone deal in the near future, one is expected eventually.
DoCoMo's new strategy to limit its discounts and promotions to a few brands, compared with nine models last winter, has helped to speed up the consolidation of Japan's handset sector, which once included a dozen manufacturers. It encouraged NEC Corp (6701.T) to effectively abandon its smartphone business last month.
Panasonic Corp (6752.T) has also said it is unlikely to supply a smartphone this winter to DoCoMo, its only smartphone customer.
Although Sharp and Fujitsu models were the best-selling DoCoMo smartphones outside this year's main summer lineup, due in part to long battery life, the exclusion cost them dearly.
In its latest quarterly earnings results, Sharp cut its handset sales forecast for the year to next March to 5.5 million units from 6.8 million, although strength in solar panels and other divisions lifted it back to the black. The company must earn an operating profit this financial year to meet the terms of its financial bailout.
(Additional reporting by Maki Shiraki; Writing by Edmund Klamann; Editing by Stephen Coates)