Panasonic aims for the high end

Panasonic Polska plans to continue trying to break into the country's mobile phone handset market by almost exclusively targeting high-end users, even launching its first digital camera-capable phone next month despite low realized demand for the technology.

"Poles are looking for the latest technology, but they are (often) not ready to pay for (it)," said Tadeusz Woronowicz, who directs Panasonic's mobile phone division here. "But they want to use it. Very often they are introducing the technology much more quickly than their partners in western Europe."

This is where Panasonic has already found demand and wants to grow its niche, Woronowicz pointed out. The company previously targeted the mass market, but owing to thin margins on sales of the more mundane technologies, Panasonic executives concluded that high-end users would be its best target group at least for the next few years.

Woronowicz said that Panasonic does not provide data on specific profits and margins for its mobile phones sold here.

"At the time when we targeted the mass market we couldn't earn so much profit," he said, explaining that Panasonic's GSM market share peaked at about 11% here in 1999. And since drawing up the new game plan, it has shrunk to just more than 2% today, although Woronowicz assures that profits here are better.

"Generally, not only in Poland, but also in the whole of Europe, Panasonic is not a main player," he said. "In Europe we have a market share of over 2%."

Panasonic's worldwide market share is about 3.2%-3.4%, he added.

"The best-selling model (in Europe) at this moment is the G87 (handset) with the built-in camera," Woronowicz said. "In this segment, our market share is quite big - probably one of the major players - (and) we are doing very well (with it) in the U.K. and Spain. Unfortunately, in Poland we didn't start to sell this model yet."

Poles will be able to take snapshots on a Panasonic phone in May, Woronowicz said. The company has waited to launch the product in the country mainly on account of its production capacity.

"The reason is that the demand for photo-camera models is much bigger than our capacity," he said.

Based on research conducted by the country's mobile operators, Woronowicz said that the demand among locals for photo-phones is about 5,000 monthly. In trying to snatch a piece of the segment here, Panasonic's most formidable competitor is American handset maker Motorola, he said.

In the future Panasonic also plans to work more closely with the country's operators to tailor handsets and software to domestic users' specific technological demands as it does in the U.K. with handsets it supplies for British mobile operator Vodafone.

But the country's sluggish adoption of speedy GPRS data transmission technology and multimedia messaging service (MMS) has pushed Panasonic's plans back.

"The same strategy (as in the U.K.)," Woronowicz said. "But at this moment only Era (Polska Telefonia Cyfrowa) has its own software platform, Omnix, and it is offering some additional features, which we could use in our MMS mobile phone.

"But basically you can start to introduce this strategy only when the penetration is quite high; still in Poland the ability of handsets to use MMS and GPRS is not so big."