DoCoMo to Raise Smartphone Sales Target as iPhone Market Share Shrinks

NTT DoCoMo Inc. (9437), Japan’s largest mobile-phone carrier, will raise its smartphone sales target on expectations its models using Google Inc.’s Android system will lure more users, eroding the share held by Apple Inc.’s iPhone.

“Users think Android smartphones are more convenient than Apple’s iPhone because Android lets them have Japanese functions like osaifu keitai,” the debit card function built into many Japanese mobile phones, President Ryuji Yamada said in an interview in Tokyo today.

DoCoMo, whose market share fell below 50 percent after rival Softbank Corp. introduced the iPhone three years ago, will announce the new smartphone target in October when reporting mid-term earnings, Yamada said. The carrier is counting on touch-screen Android phones that surf the Internet and download media to lure users from the iPhone, which accounts for about 60 percent of smartphone shipments in Japan, according to MM Research Institute Ltd.

DoCoMo had said it expected to sell 6 million smartphones this fiscal year, compared with 2.52 million in the 12 months ending March 2011.

Handsets running Android software captured 57 percent of Japan’s smartphone market last fiscal year, cutting the iPhone’s share, according to MM Research Institute Ltd. Android phones shipments rose to 4.91 million units in the 12 months ended March 31, Tokyo-based MM said in a May 10 statement. That compares with sales of 250,000 units, or 11 percent of the market, a year earlier when devices running Google’s software were first widely available in Japan.

Smartphone Shipments

Apple shipped 3.23 million iPhones in Japan last fiscal year, accounting for 38 percent of the nation’s smartphone market, down from 72 percent in the previous year, the statement said.

Shipments of domestic smartphones in Japan rose to an estimated 20 million units in the year ended March 31, 9.1 percent higher than MM’s forecast, the researcher said in a statement July 7.

Smartphones will overtake regular mobile phones in Japan in the year ending March 2013, reaching 19.3 million units, according to MM Research. Shipments of the devices will climb to 24.1 million in fiscal 2015, it said.

Separately, Yamada said DoCoMo will form a venture with Baidu Inc. in China next month, confirming an earlier report in today’s Nikkei newspaper. The venture, owned 80 percent by the Beijing-based Baidu and the rest by DoCoMo, will provide anime, game and e-book services for smartphones. DoCoMo will invest $22.5 million.

To contact the reporter on this story: Yoshinori Eki in Tokyo at yeki@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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