Management of Technology and Innovation in Japan

Exploiting “Interface Capabilities” in Overseas Markets 151
Handset Development Strategy of Japanese
Manufacturers
Major European and US manufacturers build a platform for each of the product
lines, which defines a standardized product design and core components common
across handset models over several years (Funk 2002). Even though developing
several handset models in a product line for the years, a platform/basic product design
is shared among handset models within a product line.
Taking advantage of a standardized basic product design and a set of common
parts, particularly a platform, enhances the cost reduction, and enables the manufacturers
to provide the handset models for various providers within a mobile telecommunication
technology in the world 10 . Based on the basic product design/platform,
the manufacturers modify the exterior designs, specifications, and
software for each of the customer providers. This strategy helps these manufacturers
gain large market shares in the global market.
On the other hand, the functions and structures of the relationship between mobile
service providers and manufacturers in Japan are similar to the manufacturersupplier
relationship in the Japanese automobile industry (Funk 2002). The product
development strategy of Japanese handset manufacturers is largely influenced
by the close manufacturer-provider relationship, which is characterized by the collaborative
product and technology planning and OEM vender contract based on
the subsidy system. In the close relationship with specific domestic providers,
Japanese manufacturers have developed most of the handset models “customized”
for each of the customer providers.
The harsh competition between manufacturers as well as the sales subsidy system
has encouraged the manufactures to pursue product novelty and/or product integrity
rather than development and manufacturing costs. As a result, the basic
product design (architecture, circuit design, and mechanical design) and components
are almost entirely furbished in a new handset model even if succeeding a
preceding model of a product line.
In contrast to the case of international major manufacturers, Japanese manufacturers
have not developed sufficient consideration of product lineup strategies and
platform management (Funk 2002). However, in recent years, several Japanese
firms also attempt to have the handsets in a product line mutually share common
parts 11 . The handsets which are developed in a season mutually share 70-80 % of
10 In one year, Motorola develops more than 50 models, and Samsung develops more than
200-300 models. However, most of the models would not be platform models, but derivative
models according to various providers and markets in the world.
11 Based on a questionnaire sheet on product development, the clinical data was collected
from manufacturers in the US and Japan from 1999 to 2004. The responding manufacturers
for the Japanese market include Kyocera (Oct 18, 2000; Dec 2, 2003), Mitsubishi
Electronics (Oct 20, 2000), NEC (Jun 16, 2004), Panasonic (Aug 19, 1999; Nov 9,
2000; Oct 26, 2004), Sanyo (Dec 26, 2002; Jun 25, 2003), Sharp (Jul 7, 2004, e-mail
response), Sony-Ericsson Mobile Communications (Oct 17, 2002), and Toshiba (May
19, 2004, e-mail response). For the US market, the responding manufacturers are Kyo-