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CIAJ Announces Telecommunication Equipment Production and Trade Figures For the First Half of FY2011 (April – September) – Seventh consecutive negative growth despite smartphone impact –

2012-01-18

The Communications and Information network Association of Japan (CIAJ: a general incorporated association) announces the telecommunication equipment production and trade figures for April through September, 2011 as follows.
The total value of production in the first half of FY2011 was 568.2 billion yen (-14.2% year-over-year growth). This was the 8th consecutive negative year-over-year growth. The domestic market in the early part of the first half saw the impact from the March earthquake and tsunami, with difficulties in procuring components, dropping demand, withholding of investment in facilities and/or direct damage at production facilities. Despite the disaster, the recovery progressed quicker than expected and the market saw signs of recovering demand. However, an influx of negative factors immediately ensued, such as limited electric power supplies during the summer months, the strong yen, economic slow down in Europe and the U.S. as well as the slowing growth of emerging markets, such as China.
The telecommunication equipment market experienced robust growth in smartphones and the resulting demand for base stations to keep up with the spike in data traffic, but despite the gradual overall recovery, the withholding of capital spending in facilities and the completion in the round of investment in infrastructure created tough domestic market conditions. Though the cell phone market is being revitalized by the popularity of smartphones, domestic brands are facing difficulty competing against foreign brands who have taken the lead.
The total figure for exports was 176.8 billion yen (-20.8% year-over-year growth) while imports was 692.1 billion yen (+13.8% year-over-year growth).

1. Production Trends in the First Half of FY2011

The total value of production in the first half of FY2011 was 568.2 billion yen (-14.2% year-over-year growth). This was the 8th consecutive negative growth, but an improvement over the 1Q (April – June) year-over-year growth rate of -24.0%.

[Figures by equipment categories]

  • Wireline terminal equipment: 44.1 billion yen (+2.3% year-over-year growth)
  • Mobile terminal equipment: 282.6 billion yen (-24.5% year-over-year growth) of which:
    • Cellular phones 242.6 billion yen (-27.1% year-over-year growth)
    • Public-use PHS terminals 12.5 billion yen (+9.7% year-over-year growth)
  • Wireline network equipment: 169.6 billion yen (-4.1% year-over-year growth).
    • Switching systems: 61.6 billion yen (-5.8% year-over-year growth)
    • Transmission equipment: 108.0 billion yen (-3.2% year-over-year growth)
  • Wireless network equipment: 41.6 billion yen (-13.9% year-over-year growth)
    • Base stations: 11.4 billion yen (-32.7% year-over-year growth)
  • Network access equipment: 20.4 billion yen (+79.2% year-over-year growth)
  • Wireline parts: 9.8 billion yen (+24.4% year-over-year growth

<Major equipment category trends in the first half of FY2011>

  • The figure for wireline terminal equipment reflects the shrinking of the market itself, but the recovery of parts supplies after the earthquake/tsunami contributed to 2-digit growth for telephones and intercom equipment.
  • In mobile terminal equipment, there was a growth in the number of subscribers, but an influx of foreign products and a continuing shift of manufacturing abroad contributed to the lasting drop in manufacturing figures. With the launch of new services by a telecom carrier, there was an increase in subscribers to public-use PHS terminals – focused around young users – however, this was offset by the lower pricing of the terminals themselves.
  • In wireline network equipment, modems and digital transmission equipment figures exceeded previous year’s figures. However, with the completion in the round of NGN-related investments, figures for switching systems and other transmission equipment (including optical transmission equipment) decreased over the previous year.
  • The figure for wireless network equipment dropped substantially, due to the decrease in fixed communication equipment and a large drop in base station equipment.
  • Network access equipment, such as routers, and wireline parts indicated a significant spike after the earthquake/disaster, with disaster recovery efforts and BCP measures taken by enterprises to strengthen system durability.

2. Noteworthy Export Developments in the First Half of FY2011

The total figure for exports in the first half of FY2011 was 176.8 billion yen (-20.8% year-over-year growth)

Telephone sets and terminal equipment4.3 billion yen
Cellular phones1.1 billion yen
Facsimiles0.9 billion yen
Cordless handsets for landline phones1.1 billion yen
Other1.3 billion yen
Network equipment77.0 billion yen
Base stations9.1 billion yen
Data communication equipment65.9 billion yen
Other network equipment2.1 billion yen
Parts95.5 billion yen

Significant increase in year-over-year figures were in cellular phones (+27.4%) and cordless handsets for landline phones (+104.0%), while significant decrease was recorded in data communication equipment (-3.6%), other network equipment (-38.9%) and parts (-31.9%)

By region, Asia was 106.6 billion yen (-29.5% year-over-year growth, accounting for 60.3% of the overall figure), of which China was 49.3 billion yen. North America was 41.8 billion yen (-0.3% year-over-year growth, accounting for 23.6% of the overall figure), of which the U.S. accounted for 40.4 billion yen. Europe was 18.6 billion yen (-15.0% year-over-year growth, accounting for 10.5% of the overall figure) of which the EU was 12.5 billion yen.
The figure for export of parts to Asia saw an especially steep decline at 59.4 billion yen (-41.7% year-over-year growth).

3. Noteworthy Import Developments in the First Half of FY2011

The total figure for imports in the first half of FY2011 was 692.1 billion yen (+13.8% year-over-year growth)

Telephone sets and terminal equipment328.0 billion yen
Cellular phones319.3 billion yen
Facsimiles2.3 billion yen
Cordless handsets for landline phones3.4 billion yen
Other3.0 billion yen
Network equipment239.4 billion yen
Base stations35.1 billion yen
Data communication equipment197.5 billion yen
Other network equipment6.8 billion yen
Parts124.7 billion yen

Significant increase in year-over-year figures were in cellular phones (+36.5%) and data communication equipment (+22.8%), while significant decrease was recorded in facsimiles (-45.2%), base stations (-2.7%) and parts (-21.3%)

By region, Asia was 16.2 billion yen (+17.8% year-over-year growth), of which China was 429.7 billion yen. North America was 38.6 billion yen (+9.0% year-over-year growth), of which the U.S. accounted for 36.8 billion yen. Europe was 26.4 billion yen (-31.9% year-over-year growth) of which the EU was 26.0 billion yen.
Import figures from Asia for cellular phones was 318.3 billion yen (accounting for 51.7% of the overall figure), data communication equipment was 149.5 billion yen (accounting for 24.3% of the overall figure) and parts was 110.6 billion yen (accounting for 18.0% of the overall figure), with cellular phones accounting for over half of the total figure.

Note: The figures mentioned in this press release are based on tallied figures as of the press release date. It is possible that revisions will be made at a future date.

For details, contact

Market Research
CIAJ
tel: 81-3-5403-9356 fax: 81-3-5403-9360

For more general inquiries, contact

Corporate Communications
CIAJ
tel: 81-3-5403-9351 fax: 81-3-5403-9360