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EPTE Newsletter from Japan--The iPhone Has Landed

Last week, Soft Bank, one of three wireless phone carriers in Japan, announced the launch of the first iPhone entry into the Japanese cellular phone market. Apple granted Soft Bank an exclusive contract as the sole provider of iPhones in Japan. Soft Bank representatives did not comment on the details of the contract or the negotiations between the companies.

The announcement came as a surprise for many industry experts. Most were aware that Apple was soliciting bids--the two front runners were NTT DOCOMO and Soft Bank. The prognosticators assumed NTT DOCOMO would be the winner since they have the lion's share of market (51.9%), followed by KDDI (29.3%) and Soft Bank (18.2%).

The cellular phone market in Japan is very perplexed. Since the late 90s, Japanese cellular phone manufacturers have held the title as global technical leaders, and estimates show over 80% of the population in Japan own cellular phones. The market seems almost saturated; however, handset sales remain brisk at more than fifty million sold every year. Japanese customers upgrade their phones every two years and manufacturers are continuously upgrading and releasing new models with more functions, bells and whistles.

There are about dozen handset manufacturers in Japan, and more than 100 new phone models are released each year.Fifty million units sold may seem a hefty number, but this number is relatively small when compared to sales at a global level (over billion units), and sales from each model is less than 500,000 units. Japanese manufacturers have tried to tap into the overseas business, but, unfortunately, their cellular phone designs are not well-received in other countries. Japanese electronics companies are very strong in the global consumer market, but their cellular phone segment is the exception--most have abandoned the exporting business.

The same holds true for foreign manufacturers trying to penetrate the Japanese cellular phone market. Nokia, Motorola and Samsung have been unsuccessful in their attempts to gain market share in Japan over the last few years and their share of the market remains extremely low. Most Japanese customers do not even consider purchasing foreign models.

Rigid board manufacturers face similar situations. The group is happy with the lucrative domestic business and satisfies circuit board needs from Japanese cellular phone manufacturers, but sales from overseas handset manufacturers are lackluster (Japanese flexible circuit manufacturers and component manufacturer's export to foreign handset manufacturers.) The Japanese cellular phone industry seems to be a closed market.

When iPhone its debut last year, many industry experts wondered if it would have an impact on the Japanese cellular phone market. The water cooler talk centered on the provider of the iPhone in Japan, since the providers choose the handset vendors. This launch is different--the handset vendor chooses the customer.

The chatter in Japan revolves around Apple's partnership with Soft Bank--a company with the third lowest market share in the country. At this point, the situation is water under the bridge. The next few months will be interesting as the industry watches to see how much share iPhone can gobble up from the Japanese cellular phone market. If the introduction is successful, not only will cellular phone manufacturers be affected, but ripples will be felt all the way to the circuit board manufacturers and component vendors in Japan.

Dominique K. Numakura

DKN Research, http://www.dknresearch.com/.

Headlines of the Week

(Please contact haverhill@dknreseach.com for further information on the news.)

1. Showa Denko (Major chemical company in Japan) 5/29The company has commercialized a new red LED device--the four element semiconductor (Al/Ga/In/P) provides super high brightness (80 lm/W).

2. Chisso (Major chemical company in Japan) 5/28The company has formed a new joint venture with Shin Nikko and Toho Titanium for the volume production of poly silicon substrates for solar cell applications.

3. Shin Nippon Petroleum (Major petroleum chemical company in Japan) 5/30The supplier plans to build a new plant for the production of liquid polymer resin in Kawasaki, Japan to increase the manufacturing capacity to 1,200 tons per year.

4. TDK (Major device manufacturer in Japan) 5/30The manufacturer has commercialized a new solid state drive (SSD) with capacities of 64GB, 32GB and 16 GB for industrial applications.

5. Nikko Metal (Major non iron metal supplier in Japan) 5/30The supplier as developed a new copper alloy, "C7025-H(HP)," with higher strength for fine pitch lead frames of IC packaging.

6. Toshiba (Major electronics company in Japan) 5/30The company has developed a series of packaging technologies for MEMS devices. Recent trials have enabled a 0.8 mm thick package for a multi-chip module.

7. Toppan Printing (Major printing company in Japan) 5/29The company will invest 16 billion yen to increase the manufacturing capacity of color filters for 5G LCD lines to 240,000 sheets per month as part of a joint venture with AUO in Taiwan.

8. Ibiden (Major circuit board manufacturer in Japan) 6/3The manufacturer has canceled plans to build a factory for the production of DPF products used in diesel engines in the U.S.

9. SMK (Major device manufacturer in Japan) 6/4The company has demonstrated an ultra small pitch connector (0.1 mm pitch for 80 pins) for the termination of the high-density flexible circuits.

10. Toray (Major chemical company in Japan) 6/5The supplier has developed a new optical wave guide material for future hybrid E/O circuit boards (loss: 0.1 dB/cm).

11. SMK (Major device manufacturer in Japan) 6/6The manufacturer has unveiled a new touch screen panel produced with a new zinc oxide transparent electrode material.

12. AUO (major display manufacturer in Taiwan) 6/6The company has developed a new, curved LCD display for possible use in vehicle instrument panels.

Interesting Literature Concerning the Packaging Industry

Articles from DKN Research

1. "Screen Printing for High-Density Flexible Electronics," Robert Turunen, Masafumi Nakayama and Dominique Numakura, Printed Circuit FAB, October, 2007, http://pcdandm.com/cms/content/view/3846/95/.

2. "Total Process Solution for the High-Density Multi-layer Flexible Printable Electronic Circuits," Dominique Numakura, Denshi Zairyo, October, 2007 (Japanese only).

3. New "Roll to Roll Production of Flexible Circuits, Possibilities and Issues," Dominique Numakura, Joho Kiko, Tokyo, March, 2008 (Japanese only).

4. "Coombs' Printed Circuits Handbook, 6th Edition, Part 15-Flexible Circuits," Dominique Numakura, McGraw Hill, New York, September, 2007.

5. New "Screen Printing Process for High Density Flexible Electronics," Robert Turunen, Dominique Numakura, Masafumi Nakayama and Hisayuki Kawasaki, IPC Printed Circuit Expo/APEX and the Designers Summit, April, 2008.

6. New "Global Flexible Circuit Industry, Market Trends and Technology Trends by Applications," Dominique Numakura, International Symposium of KPCA Show, April, 2008 (English PowerPoint file is available).

From the Major Industry Magazines

1. "Vacuum Etching Technology, Combined Processes and Interesting Development," Volker Feyeravbend, CircuiTree, June, 2008.

2. "Evaluating Manufacturability and Operational Costs for New Conformal Coating Processes," Jason Keeping, Circuits Assembly, May, 2008.

3. "Alternatives Replace Older Cleaners," Mike Jones and Tom Tattersall, SMT, May, 2008.

4. "Don't Let Your Signals, STUB THEIR TOES," Eric Bogatin, Printed Circuit Design & FAB, May, 2008.

5. "DRIE for MEMS devices," Michel Puech, Jean-Marc Thevenoud, et al, Advanced Packaging, April, 2008.

7. "Nanotechnology and mathematical methods for high-performance thermal interface materials," Sara N. Paisner, Global SMT & Packaging, May, 2008.

8. "Microflex Circuit Applications for Medical Devices," Luke Volpe, MD & DI Magazine, January, 2008.