South Korean media: Not a competitor of Chinese and European companies, Japan's NEC stops R&D of 4G and 5G base stations!
On January 25, the South Korean media "Global Economy" published an article stating that NEC, once a pride of Japanese telecommunications technology, has decided to exit the R&D of 4G and 5G wireless base station hardware.
According to the information, NEC believes it has no room to survive in the global base station market (currently dominated by Chinese and European companies) and plans to completely restructure its business, focusing on higher-profit software and defense industries.
In a recent interview with "Nikkei Asia", NEC President Takayuki Morita officially announced: "In principle, we will not invest in the R&D of 4G or 5G base stations in the future."
Within NEC's five-year business plan starting in 2021, 5G base station business was listed as a key growth engine. However, due to lower-than-expected global telecom investment in 5G and sustained losses in this field, NEC finally decided to stop this business.
Although new development projects will be stopped, maintenance and technical support for existing base stations will continue to minimize inconvenience to customers.
The biggest reason for Japanese companies being forced out of the base station market is the huge gap in market share.
Data from market research company Omdia shows that Huawei of China, Ericsson of Sweden, and Nokia of Finland account for about 80% of the global market share.
The combined market share of NEC and Fujitsu is less than 2%. Even Japan's largest telecom company NTT Docomo plans to shift its business focus from domestic equipment to foreign companies such as Ericsson starting in 2024, which will further weaken its position in the domestic market.
Japanese IT industry continues to exit the base station business, Kyocera has already given up the development of 5G base stations, and Fujitsu also split its related business into a subsidiary in July.
NEC plans to shift its business focus from hardware-centric base station operations to higher-value-added fields.
The company will move from hardware manufacturing to solution-oriented businesses, including network operation software.
Given the increasing importance of economic security, NEC will continue to develop dedicated communication equipment for the Japanese government and defense industry.
Although giving up 4G and 5G, NEC will continue to conduct preliminary research and develop equipment for the next-generation communication standard 6G, to consolidate the foundation for future market comeback.
An industry insider analyzed: "NEC's decision is practical. With the global popularity of open communication technologies such as 'Open RAN', strengthening system integration and software capabilities rather than hardware manufacturing will be beneficial for the company's survival."
Original: toutiao.com/article/1855274959047707/
Statement: The article represents the views of the author himself