<p>J@pan Inc presents the Wireless Watch Newsletter:</p>
<p>W I R E L E S S W A T C H</p>
<p>Commentary on the Business of Wireless in Japan</p>
<p>Issue No. 167<br>
Friday October 16, 2007<br>
Tokyo</p>
<p>*****OUT NOW J@PAN INC MAGAZINE'S OCT/NOV ISSUE*****<br>
Featuring our Legal Special, Failed Businesses, Fashion and more!</p>
<p>The Navigation Bubble - Who puts Japan back on the global map? </p>
<p>2007 is a year of consolidation in the navigation industry.<br>
Nokia announced its plans to acquire Navteq, an American<br>
mapmaker, for 8.1 billion dollar, while Dutch navigation unit<br>
maker TomTom is willing to pay 1.8 billion euro for Belgian-<br>
based Teleatlas, Navteq's competitor. The CEO of AND, a small<br>
mapmaker from Holland claimed a third place in the digital<br>
mapping world with just 2.4 million euro in revenue over the<br>
first six months of 2007. Did he bluff to push up his share<br>
price or was Japan deleted from his global map database?</p>
<p>Japan has been leading the in-car navigation industry. Maps are<br>
a pure necessity in Japan - it is easy to get lost as streets<br>
have no names. Most of the vehicles nowadays are sold with high-<br>
end built-in navigation units of which the maps are supplied by<br>
leading mapmaker Zenrin, a Kyushu-based company. </p>
<p>Zenrin was established in 1948 as a publisher of tourist maps<br>
and mainly focused on its home market. It employs more than<br>
2,000 people and has revenues of about 51 billion yen (about 430<br>
million dollar) and 3.4 billion yen net profit (30 million<br>
dollar) - not bad for an industry that requires lots of<br>
investment to produce and maintain maps. Zenrin has been<br>
expanding into the overseas markets. In China, Zenrin has opened<br>
cartographic data processing offices in Shanghai and Shenzhen.<br>
In Europe, the US, and Taiwan, Zenrin produces in-car navigation<br>
software. Why is Zenrin not a global player in the digital<br>
mapping market? </p>
<p>[Continued below..]</p>
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<p>[...article continues]</p>
<p>Japanese high-tech navigation makers are conservative and lack<br>
the marketing know-how to grow their overseas market share and<br>
strike strong alliances. Japanese in-car navigation unit makers<br>
cannot get a foot on the ground in Europe with their high-end<br>
navigation systems starting from 2,000 dollar that are main<br>
stream in Japan but too expensive for the European market. Back<br>
in the nineties, Japanese companies were also being told by the<br>
Europeans that their color screens with nice graphical maps were<br>
too dangerous as they would distract the drivers. It helped to<br>
keep the Japanese out of their European market, giving less<br>
opportunity for Zenrin to expand its base providing the software<br>
to Japanese navigation unit makers in Europe. In the mean time,<br>
the Europeans could improve their simple graphical user<br>
interface to 3D color maps. </p>
<p>There is a striking similarity with mobile phones. The Japanese<br>
handset makers like NEC, Mitsubishi Electric, Sharp and<br>
Matsushita entered the European market with the first polyphonic<br>
music phones and color screens. They tested the market with<br>
their leading edge tech products. Besides Swedish-Japanese joint<br>
-venture, SonyEricsson, none of the Japanese still plays a<br>
significant role anymore outside Japan. Now, the multimedia<br>
enabled phones are mass market products, the Japanese are<br>
overshadowed by the Koreans, Motorola, and Nokia. It would be<br>
wise for Zenrin to learn from the past and become more<br>
aggressive in a market that is rapidly growing. Otherwise its<br>
investments to create overseas maps might not be worth a lot in<br>
the near future. </p>
<p>By Arjen Van Blokland</p>
<p>To comment on this newsletter please visit the website version of<br>
the article at <a href="http://www.japaninc.com/ww167" title="www.japaninc.com/ww167">www.japaninc.com/ww167</a></p>