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1. Market Trends in Communications
Equipment in Japan
The telecommunications market witnessed the bursting of the IT bubble in FY2002, followed by gradual recovery from 2003 onwards, supported by Internet equipment and cellular phones. The start of MNP (number portability) services intensified competition among mobile carriers, pushing up demand for handsets and base stations, and resulting in a total figure of 4.437 trillion yen for FY2006, or a 1.9% growth over the previous year. With cellular phones accounting for over half the market, it is now the determining factor of the market trend.
The FY2007 telecommunication equipment market was 4.290 trillion yen (negative 3.3% growth over the previous year), with the domestic market accounting for 3.784 trillion yen (negative 3.4% growth over the previous year), and exports accounting for 506.2 billion yen (negative 2.7% growth over the previous year).
Categories with negative figures included negative 5.1% growth of cellular phones, due to the drop in handset prices, switching systems and key telephone devices. On the other hand, growth categories included multi-functioning facsimiles for both home and office use. This is due to the rise in their price tags in accordance to the more advanced and complex functions. The figure for camera and video-screen equipped intercoms also rose, pushed by concerns for security. The export figure for digital transmission devices showed significant growth with new demand for undersea optical cables. Optical access equipment for FTTH and NGN, as well as routers and LAN switches also continued to show healthy growth. Demand from the public sector for fixed communication devices in association with disaster prevention and emergency systems continued to contribute to positive growth.
Demand for IP network equipment and optic communications equipment are expected to continue growing with the building of the next-generation broadband networks in FY2008 and onwards. However, the total value of shipments is forecast to decrease with intensifying competition, despite efforts to inject new robustness through such initiatives as “Mobile Business Stimulation Plan (unofficial translation)” by the Ministry of Internal Affairs and Communications.
2. Midterm Projection (FY2008 - FY2012)
CIAJ forecasts the market structure to undergo dramatic change in the direction of triple play: integrated IP networks and the convergence of telecommunications with broadcasting. In conjunction with this transition, CIAJ expects the emergence of new communication equipment, terminals and services. At the same time, further globalization and borderless markets will intensify price competition and require further revision of telecommunication business policies. All of these changes will have significant impacts on equipment manufacturers and telecommunication carriers.
The new sales plan for mobile handsets is expected to lengthen the upgrade cycle, translating into lower unit figures as well as value of shipments for FY2008 through 2010. However, the upgrade cycle is expected to stabilize from FY2011, with a recovery in handset demand.
Altogether, the telecommunication equipment market for FY2012 is projected at 3.888 trillion yen (-12.4% over FY2006), with the domestic market accounting for 3.323 trillion yen (-15.2% over FY2006) and exports accounting for 565.5 billion yen (+8.6% over FY2006).
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