- Competition Strategy Emphasizes Stronger Handset Lineup -

In the face of a maturing Japanese mobile phone market and the impending implementation of mobile number portability in October, DoCoMo's fiscal 2006 strategy emphasizes aggressive development of the company's handset lineup, backed by broad nationwide coverage, extensive services, easy-to-understand fees, and comprehensive after-service.

While mobile users in most other countries are concerned with handset design and usage costs, Japanese users are demanding phones that precisely fit their individual lifestyles. Even back in February 2005, a survey conducted by the Ministry of Internal Affairs and Communications found that the Japanese already viewed their mobile phones as e-mail terminals (85% of respondents), timepieces (66%), cameras (52%) and Web browsers (32%).

DoCoMo is also introducing unique services offering enhanced customization and convenience. Chaku-moji lets the caller send a simple text message to the receiver's screen while it is ringing, to let them know the subject of the call. Remote Locking enables the user to contact DoCoMo to remotely lock their phone's smart card features, including personal data, if the phone is lost. Also, a convenient phonebook-saving service backs up and restores phone numbers if a phone is lost or when the user changes phone models.

DoCoMo even offers handsets for people other than those in their teens through early thirties, who tend to prefer 9 or 7 series models. For example, the Raku-raku Phone targets seniors with universal design and ease of use, the Raku-raku Phone Simple offers voice functions only, and the Kids Keitai has GPS location-tracking and other safety functions to help parents keep track of their young children.

The new P901iTV even supports terrestrial digital broadcasting, enabling users to watch TV programs with their handsets.

Kiyohito Nagata, director of the Product Division for handset planning, development and commercialization, explains: "We no longer can compete by simply developing new services. "He notes that if DoCoMo misses an opportunity to exploit any segment of the handset market, the competition will quickly fill the void: "This is why we continue to expand and modify our handset lineup with models highly tailored to specific user segments. For example, we have started to offer various types of simplified models because some users have decided they don't require handsets packed with all of the latest high-end features."

For DoCoMo, which does not manufacture products itself, working closely with a range of handset manufacturers is crucial to ensuring that the company's lineup fully meets the needs of an increasingly diverse market. Since product development takes roughly one year, the challenge is to accurately project what users will want a year later.

DoCoMo is also enhancing its lineup with technology from non-Japanese manufacturers that have a history of success in other countries. The line of models for corporate users was enhanced with the July 31 release of DoCoMo's first Windows Mobile OS phone, which is made by High Tech Computer Corp.

In view of the intensifying competition, DoCoMo cannot afford to be overly confident of retaining its top market share, and will continue to respond to the diversifying requirements of users looking for handsets that suit their individuality.

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