The Communication and Information network Association of Japan (CIAJ) announces the telecommunication equipment and trade figures for April through December, 2017 as follows.
Japan’s GDP during October through December 2017 grew YoY (year-over-year) at an annual rate of 1.6%, the 8th consecutive positive quarterly growth, according to the second preliminary figures announced by the Cabinet Office on March 8th. The number was sustained by growth in consumer spending for cellular phones and on eating out, as well as increased capital spending by enterprises in such areas as production machinery. Healthy performance among businesses overall and economic growth abroad are also expected to contribute to a continuation of the gradual recovery.
However, in the telecom market, capital investments in business-related equipment and network equipment remained sluggish, with continuing relocation of manufacturing overseas, leading to the second consecutive decline in domestic production of telecom equipment (combined Q1 through Q3). On the other hand, exports recorded a second consecutive positive growth (combined Q1 through Q3), with the uptake in demand for smartphone parts. There was a significant spike in the third quarter in imports, with positive growth in all categories, but especially robust demand for both domestic as well as foreign brand smartphones, pushing the combined Q1 through Q3 figure into positive growth.
I. Domestic Production
(Based on Indices of Industrial Production compiled by the Ministry of Exonomics, Trade and Industry and summarized by CIAJ)
(1) FY2017 Q1 through Q3 actual
The total value of production as of the end of Q3 was 367.1 billion yen, or negative 15.4% growth over the same period in FY2016. The recovery in domestic consumer spending (including smartphone purchases) was not enough to offset the decline in capital spending for office equipment as well as wireline and radio network equipment.
(2) Trend by categories
Actual figures by category for April through December are as follows:
- Wireline terminal equipment: 43.1 billion yen (-7.8% over the same period of the previous year). Of which telephone sets was 2.4 billion yen (-3.6% over the same period of the previous year) and key telephones 16.7 billion yen (-14.1% over the same period of the previous year), intercoms 23.1 billion yen (-3.1% over the same period of the previous year) and facsimiles 900 million yen (-6.8% over the same period of the previous year). On the other hand, the influx of imports rose in cordless phones (4.5 billion yen: +19.1% over the same period of the previous year) and facsimiles (3.9 billion yen: +4.3% over the same period of the previous year).
- Mobile terminal equipment: 115.9 billion yen (-20.4% over the same period of the previous year). Of which mobile phones was 79.7 billion yen (-21.5% over the same period of the previous year) and public-use PHS 1.1 billion yen (+21.5% over the same period of the previous year). Smartphone demand was healthy with upgrades from older or clamshell models, but domestic production continues to decline. On the other hand, the influx of imports rose in cellular phones (1.469 trillion yen: +16.6% over the same period of the previous year).
- Wireline network equipment: 89.0 billion yen (-12.7% over the same period of the previous year). Of which central office switching systems was 3.7 billion yen (-42.5% over the same period of the previous year), PBX was 9.8 billion yen (-17.9% over the same period of the previous year) and digital transmission equipment was 28.4 billion yen (-18.1% over the same period of the previous year) and other transmission equipment was 43.1 billion yen (-1.0% over the same period of the previous year). Demand for key telephones and PBXs, originally expected in FY2017, is foreseen to pick up with the supply of large to medium scale office buildings gets built behind schedule in FY2018 or later in time for 2020. However, smaller systems and lower unit costs will push overall yen value of demand figures lower.
- Wireless network equipment: 69.7 billion yen (-27.5% over the same period of the previous year). Of which fixed telecommunication devices was 24.2 billion yen (-9.1% over the same period of the previous year) and base station equipment was 45.5 billion yen (-34.5% over the same period of the previous year). The end to the investment cycle for higher speeds resulted in the drop in base stations.
- Network access equipment: 28.3 billion yen (+19.5% over the same period of the previous year). Compared to FY2016, which had low demand, the numbers show positive growth.
- Wireline parts: 21.1 billion yen (+5.9% over the same period of the previous year). Healthy production of new advanced feature models for Japanese, U.S. and Korean brands resulted in the 6th consecutive positive growth.
II. Exports
(Based on Indices of Industrial Production compiled by the Ministry of Exonomics, Trade and Industry)
(1) FY2017 Q1 through Q3 actual
The total figure for exports from April through December was 443.0 billion yen (+27.0% over the same period of the previous year), reflecting healthy growth of overseas economies. Exports of telephone sets and terminal equipment increased with growth in U.S. demand for cell phones from FY2017. In network equipment, the end to the recent cycle of global investments in LTE led to the large drop in base stations. There was no significant change in data communication equipment demand. Increased production of high-end terminal equipment by both domestic as well as foreign brands in their overseas production sites kept demand for parts at a healthy level.
(2) Trend by categories
Actual figures by category for April through December are as follows:
Telephone sets and terminal equipment 13.7 billion yen (+346.8% over the same period of the previous year)
Of which, mobile phones was 11.5 billion yen (+1,025.1% over the same period of the previous year), facsimiles was 100 million yen (-45.3% over the same period of the previous year), cordless handsets for landline phones was 300 million yen (+67.2% over the same period of the previous year) and other was 1.8 billion yen (+2.8% over the same period of the previous year).
Network equipment 109.1 billion yen (-4.0% over the same period of the previous year)
Of which, base stations was 5.1 billion yen (-45.9% over the same period of the previous year), data communication equipment was 99.9 billion yen (-0.9% over the same period of the previous year) and other network equipment was 4.2 billion yen (+17.8% over the same period of the previous year).
- Parts (both wireline and wireless) 320.2 billion yen (+37.9% over the same period of the previous year)
(3) Actual figures by region (April through December)
By region, Asia was 346.3 billion yen (+32.0% over the same period of the previous year), of which China was 181.0 billion yen (+13.0% over the same period of the previous year). North America was 54.2 billion yen (+15.0% over the same period of the previous year), of which the U.S. was 53.4 billion yen (+15.7% over the same period of the previous year). Europe was 30.8 billion yen (+9.8% over the same period of the previous year), of which the EU was 27.3 billion yen (+7.7% over the same period of the previous year). Among the export of parts, China accounted for 70.5% in FY2015 and 60.3% in FY2016, and this decreased to 50.9% in the April through December 2017 period, reflecting the shift in production of smartphones to Asian countries other than China. Exports of mobile phones to the U.S. continue to increase and amounted to 8.9 billion yen (+8,448.4% over the same period of the previous year)
(4) Comparison and breakdown by regions
| First: | Asia 78.2% (+3.0% over the same period of the previous year) |
| Second: | North America 12.2% (-1.3% over the same period of the previous year) |
| Third: | Europe 7.0% (-1.0% over the same period of the previous year) |
| Other regions: | 2.6% (-0.7% over the same period of the previous year) |
III. Imports
(Based on Indices of Industrial Production compiled by the Ministry of Exonomics, Trade and Industry)
(1) FY2017 Q1 through Q3 actual
Healthy domestic demand for smartphones pushed the total figure for exports from April through December to 2.235 trillion yen (+15.7% over the same period of the previous year). In mobile phones, the usual spike in new smartphone shipments from China to the U.S. in the September through October timeframe occurred a month late from October through November. This meant a large drop in Q2 figures and a recovery in Q3. In base stations, the recent round of domestic demand for LTE slowed to push Q3 figures into the negative for the first time in seven quarters.
(2) Trend by categories
Actual figures by category for April through December are as follows:
Telephone sets and terminal equipment 1.482 trillion yen (+16.5% over the same period of the previous year)
Of which, mobile phones was 1.469 trillion yen (+16.6% over the same period of the previous year), facsimiles was 3.9 billion yen (+4.3% over the same period of the previous year), cordless handsets for landline phones was 4.5 billion yen (+19.1% over the same period of the previous year) and other was 4.9 billion yen (-0.2% over the same period of the previous year).
Network equipment 505.6 billion yen (+15.2% over the same period of the previous year)
Of which, base stations was 33.2 billion yen (+28.5% over the same period of the previous year), data communication equipment was 457.8 billion yen (+14.4% over the same period of the previous year) and other network equipment was 14.7 billion yen (+12.9% over the same period of the previous year).
- Parts (both wireline and wireless) 246.7 billion yen (+12.0% over the same period of the previous year)
(3) Actual figures by region (April through December)
By region, Asia was 2.125 trillion yen (+16.4% over the same period of the previous year), of which China was 1.704 trillion yen (+8.7% over the same period of the previous year). North America was 58.2 billion yen (+10.5% over the same period of the previous year), of which the U.S. accounted for 57.0 billion yen (+12.2% over the same period of the previous year). Europe was 25.8 billion yen (+1.6% over the same period of the previous year), of which the EU was 25.0 billion yen (+0.6% over the same period of the previous year).
(4) Comparison and breakdown by regions
| First: | Asia 95.1% (+0.6% over the same period of the previous year) |
| Second: | North America 2.6% (-0.1% over the same period of the previous year) |
| Third: | Europe 1.2% (-0.1% over the same period of the previous year) |
| Other regions: | 1.1% (-0.4% over the same period of the previous year) |
IV. Trends in Orders Received and Shipped
(from CIAJ statistics)
(1) FY2017 Q1 through Q3 actual
CIAJ statistics for total orders received and shipped for the period amounted to 1.307 trillion yen (-0.5% over the same period of the previous year). Of which the total value of domestic shipments was 1.003 trillion yen (-3.5% over the same period of the previous year) and exports was 304.1 billion yen (+10.6% over the same period of the previous year).
(2) Trend by categories
Actual figures by category for April through December are as follows:
Wireline terminal equipment: 474.1 billion yen (+4.1% over the same period of the previous year).
Personal-use multi-functioning facsimiles, office-use facsimiles for the domestic market and office-use multi-functioning facsimiles for overseas markets all showed healthy growth. Intercoms also contributed to the overall positive growth.
Mobile terminal equipment: 475.8 billion yen (+10.9% over the same period of the previous year).
In mobile phones, smartphone demand was healthy, with upgrades from older or feature phones, contributing to the significant uptake.
Wireline network equipment: 102.7 billion yen (-14.2% over the same period of the previous year).
Demand for PONs, modems and WDM transmission equipment continued to exceed previous year figures, but the category as a whole declined.
Wireless network equipment: 193.5 billion yen (-22.3% over the same period of the previous year).
Exports of terrestrial communication equipment and domestic demand for satellite communication equipment (due to Japanese satellite launches) recorded positive growth. However, the end to the investment cycle for LTE resulted in the drop in base stations, continuing the negative growth for the overall category.
Other network equipment: 29.1 billion yen (-3.8% over the same period of the previous year).
Routers recorded negative growth, while LAN switches showed positive growth.
Telecommunication equipment parts: 32.2 billion yen (+4.0% over the same period of the previous year).
For details, contact
Market Research
CIAJ
tel: 81-3-5403-9356 fax: 81-3-5403-9360
For more general inquiries, contact
Corporate Communications
CIAJ
tel: 81-3-5403-9351 fax: 81-3-5403-9360
