Docomo, Fujitsu, Renesas: The triangle thickens

PARIS – When NTT Docomo earlier this week announced its plan to form a new joint venture with five electronics vendors to develop products for LTE and LTE-Advanced mobile communication standards, the void that caught my eye was the conspicuous absence of Renesas Mobile from NTT Docomo’s list.

Those participating in this NTT Docomo-led JV include: Fujitsu Ltd., Fujitsu Semiconductor Ltd., NEC Corp., Panasonic Mobile Communications Co. Ltd. and Samsung Electronics Co. Ltd. The venture, scheduled to coalesce by the end of March, will be tasked to develop and sell semiconductors for handsets and other mobile devices.

Why Renesas Mobile – Japan’s leading mobile chip vendor – is missing from this emerging JV remains unclear. Neither NTT Docomo nor Renesas Mobile was talking at press time.

But I have a theory. I see three loosely connected but competing power plays unfolding as a result of the latest NTT Docomo consortium. My three hypotheses involve: 1) the emerging conflict between NTT Docomo and Renesas Mobile; 2) Fujitsu and Fujitsu Semiconductor jointly plotting to leverage that conflict to their advantage in the emerging LTE market; 3) a potential IP battle over LTEs.

Apropos to my first point, it’s clear that NTT Docomo doesn’t exactly appreciate Renesas Mobile’s global LTE/Apps-processor ambitions.

While Renesas Mobile isn’t exactly dumping Docomo (au contraire, Renesas Mobile still needs Docomo’s business), the Japanese chip company has set its sights on the global stage. Instead of choosing to stay as key supplier to Docomo and remain trapped in Docomo’s “Golden Cage,” Renesas Mobile made a conscious decision to serve a variety of world-class handset OEMs and ODMs, as “the” alternative mobile chip supplier to Qualcomm.

That move has evidently prompted Docomo to look for a new partner, preferably more eager and willing to customize LTE chips/handsets according to Docomo’s specs and designs.

Second issue: Fujitsu and Fujitsu Semconductor are clearly seizing the opportunity to create a wedge between Renesas and NTT Docomo.

Citing Renesas’ acquisition of Nokia’s former modem team, a Fujitsu Semiconductor executive, who spoke on the condition of anonymity, said earlier this year: “With this move, Renesas let the whole world know that NTT Docomo is no longer their top priority.”

Fujitsu and Fujitsu Semiconductor are highly motivated to become NTT Docomo’s number one handset and chip supplier. More specifically, they hope to ride Docomo’s coattails to global expansion – probably beginning in India.

It’s no secret that Fujitsu Semiconductor has been struggling without its own ‘platform’ strategy. Their traditional strength in ASIC designs and excellent execution on customizing point products for domestic OEMs is not exactly helping them extend their business beyond the domestic market.

Fujitsu, for example, has point solutions such as analog signal processing for mobile phones consisting of RF ICs (acquired from Freescale Semiconductor) combined with its high-power amplifier ICs. While Fujitsu believes that the digital interface enabled by Fujitsu’s RF ICs could be a “killer app” for multiband, multimode LTE cell phones, Fujitsu itself doesn’t offer an LTE modem.

So, what next? A closer tie with NTT Docomo could be a logical solution for Fujitsu to achieve its ambition, hopefully rivaling Renesas Mobile as a key player in the next LTE modem market.

Third, get ready for the looming IP battle over NTT Docomo-flavored LTE implementations – especially among those chip suppliers who have served and worked with NTT Docomo together.

Clearly, NTT Docomo has a big stake in its own IPs.

But, since many “partners” have pitched in to implement Docomo’s LTE solutions, it is not clear how much intellectual property -- developed under Docomo’s initiative -- solely belongs to Docomo.

There is little doubt, though, that Docomo will continue to call the shots within the new joint venture. A big question, then, is how Renesas Mobile, cut off from the new consortium, would respond to the LTE IP battle of the future.

Much of the shifting power grabs among Japan’s number one mobile carrier and Japanese electronics companies may strike you as inside baseball – only applicable in Japan. And you have every right to feel that way.

After all, this is not the first time that NTT Docomo has formed consortiums with a number of Asian handset and chip vendors to launch similar projects. Each time, there’s been one mission in mind: catering to NTT Docomo’s needs.

Recent examples include the joint development – among Fujitsu, NEC, Panasonic Mobile Communications, Sharp, Renesas and NTT Docomo – of an application processor platform for feature phones (running Symbian and Linux), announced in the spring of 2010. LiMo Foundation, an industry consortium dedicated to creating the hardware-independent, Linux-based operating system for mobile devices, is another example.

However, such joint efforts, despite the grandeur of each alliance, have borne scant fruit so far on the global market

Clearly, the idea of gathering collective knowledge and expertise to share the benefits among domestic players in Japan’s electronics industry is alluring to all parties. But so far, it’s been NTT Docomo’s party.

Unless NTT Docomo finally begins to work harder for a much bigger stake in the global cellular market, technology suppliers who cater to NTT Docomo have little hope to push their products outside Japan.

Riding NTT Docomo’s coattails is certainly a strategy. But it’s no way for a company to control its own destiny.


Related stories:

Lack of a ‘Platform’ Hurting Fujitsu Semi

LTE Modem IP Makes for Strange Bedfellows

Renesas Mobile Looks to Become 'the' Qualcomm Alternative