October.19.2005 Overview of domestic mobile phone shipments for the first half of FY 2005 ■Sharp made a leap up to the 1st place. 　On 18th Oct. 2005, MM Research Institute published a research report about domestic mobile phone shipments for the first half of FY 2005, from April to September 2005. According to the report, the total number of shipments was 21.29 million and slightly increased by 0.9 % compared to the same time last year. Although there were no models that recorded explosive sales, replacement demands from 2G to 3G mobile phones increased stably. The number of users who subscribed the 3G services, such as CDMA2000 1X and FOMA, were 39.23 million during the period. The subscribers of the 3G services as of the end of September amounted to 8,913, which accounted for 44% of the total markets. Many of the users who terminated 2G services have been subscribing 3G services. The market of 3G mobile phones will accelerate its expansion in parallel with the shrink of the 2G market. By the end of 2005, the subscribers of 3G services will increase to 53% of the total. 　As for ranking in market shares among manufacturers, there is no knowing what will happen next. Sharp with favorable sales has now leaped up to the 1st. NEC and Panasonic tied with the 2nd place. Yet, the difference between the 1st and 2nd was only 1.3 points. The three-way struggle among the major players, which had been continuing since last year, became more evident. Toshiba, ranked in the 4th, also advanced rapidly and narrowed the gap between the top 3. ■Subscribers of 3G services will exceed 50% by the end of March 2006. 　Mobile phone market of FY 2005 is estimated to be 44.3 million units, up 0.8% compared to the previous fiscal year. Along with the trend that new demands for both 2G and 3G services will gradually decrease, it is expected that each company will devise various measures to enclose their own clientele, looking ahead for new Number-Portability system or newcomers to the market. Also, the replacement demand not only from 2G to 3G services but within 3G itself will be expected to grow. The ratio of 3G subscribers will surpass 50% of the total markets by the end of FY 2005. 　In FY 2006, transition to 3G services will be promoted and 3G subscribers will account for 75% of the total market. The Number-Portability service and the new entries are expected to accelerate the expansion of the market. Led by these factors, the market in FY2006 is estimated to grow by 8.8% up to 48.2 million units.