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Why Motorola and co sweat buckets when earthquakes hit Japan

When it comes to global cellphone sales it’s no secret – but it is an eternal surprise – that Japanese handset makers have long been miserable flops. In the face of giants like Motorola and Nokia the leading Japanese manufacturer, Sharp, commands a mere 1% of the global market, but there’s more to the sorry tale than meets the eye.

Behind those weak statistics there’s a surprise that was laid bare when a huge earthquake hit the Hokuriku region of Japan in March. The subsequent sudden rush made by Western phone makers to check on electronics companies in the quake-hit area revealed just how dependent they are on Japanese components.

The reason for the concern was the simple fact that a huge chunk of the hardware in their phones comes from Japan. Their first port of call for the worried firms was Murata Manufacturing, which makes 40% of the world’s ceramic capacitors, mostly in Hokuriku.

Fortunately for Nokia et al Murata escaped mostly intact, but – had the quake been more severe – the story could have been very different for their bottom lines.

As Japanese newspaper the Nikkei [Subscription link] spells out, everything from camera units to the quartz oscillators that control the wireless radios in our cellphones comes from Japan. And, with modern phones requiring more and more components, that reliance is only increasing.

While little is likely to change in the immediate future, the question remains why the 11 Japanese phone makers have managed to grab only 7% of the global market between them when their domestic models are clearly on the cutting edge.

The factors range from Japan’s non-use of GSM to the handsets being just ‘too different’ but the main reason cited by industry observers is that Japanese phones simply evolved too quickly for the West to keep up.

(Crossposted to Tech.co.uk; Image copyright Nikkei BP)

09:13 AM JMLH • Permalink
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