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LG's Chocolate Thrives in Japan's Perilous Phone Market

LG Electronics is causing an unexpected stir in Japan with its Chocolate phone, which was developed to target international markets. Having sold more than 14 million units so far since its overseas release in the first half of last year, the phone posted sales of 5,000 units on its first day in Japan on Oct. 19 this year, and has since seen daily sales average 2,000 units.
The Japanese handset market is considered a graveyard for non-Japanese manufacturers. The island nation's own top 10 makers such as Sharp, Panasonic, and NEC dominate over 90 percent of the market, while Nokia, Motorola and other international giants have failed to make much of an impression.

Japan adopted a unique wireless technology to protect its market when it first commercialized digital mobile phones. The Japanese also tend to be unsympathetic to imports. That makes the Chocolate's success there all the more significant. At the rate it's selling, Korea’s second largest electronics has forecast sales of 200,000 Chocolates by the end of this year.

The Chocolate has become the third best-selling handset out of eight high-end models sold by NTT DoCoMo, Japan’s largest wireless operator. It also ranked second in a popularity poll by price comparison website Kakaku.com. The Chocolate sold in Japan is the 3G model, using high-speed downlink packet access (HSDPA) technology. It comes in three colors -- black, white and red -- and features a touch-sensitive keypad.

So why has LG succeeded where so many others have failed? Experts at home and abroad point to the phone's sensuous design. "Mobile phones are becoming a fashion item," said Lee Seung-ho, an analyst at Goodmorning Shinhan Securities. "LG was quick in reading the market trend that changed from focusing on function to stressing design."

Japan was interested in the phone's design even before the device was released there. Japan’s state-run TV channel NHK broadcast a special program called "Design War," which included a discussion on the design and features of the Chocolate phone.

Another reason behind LG's success is its marketing efforts. LG cooperated with NTT DoCoMo to market the phone and visited firsthand mobile phone retailers across Japan to promote it.

Models show off LG Electronics’ Chocolate phone.

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