link has been deployed are developing countries in the Asia-Pacific region, Middle East, and Africa. The products in demand by the backhaul market fall into the "data communications equipment" category mentioned above in the transitions of communications equipment export value, and further growth is expected.

Competition continues worldwide in the development of ultra-high-speed, large-capacity optical communications technologies in order to meet soaring traffic volumes and the expansion in cloud computing that processes the traffic. Above all, the optical transmission field is where Japanese telecommunications carriers and manufacturers have exerted leadership in global standards. One typical network example is the market for metropolitan area networks (urban communications networks around 10 kilometers in length), where Fujitsu and NEC are the leading players in North America and the Asia-Pacific region (Figure 5-2-5-2). In 2014, NTT, NEC, Fujitsu, and Mitsubishi Electric worked on a joint R&D project on technology that processes optical transmission signals at speeds up to 100 Gbit/sec and were the first in the world to successfully implement the technology in a chipset (LSI). The four companies have adopted the technology to networks of optical submarine communications cables connecting 22 countries across the Pacific and Atlantic oceans. As this example shows, Japanese enterprises in the optical transmission field are expected to leverage their technological superiority to expand overseas.

Figure 5-2-5-1 Transitions in export value of Japanese communications equipment

(Source) “Communications Equipment Production, Exports, and Imports,” Communications and Information Network Association of Japan

Figure 5-2-5-2 Metropolitan area network (WDN) market shares (2013)

### 6. Device layer: Trends in Japan's ICT industry

## (1) Device product market

Japanese manufacturers have lost ground and presence in the competitive smartphone market. In the midst of the heated market conditions, the future moves of Japanese phonemakers are under scrutiny: Sony, who continues to challenge the major global manufacturers by selling on brand power and functionality, and Fujitsu and Kyocera, which have some presence in niche markets where emphasis is placed on particular functions (Figure 5-2-6-1).

## (2) Developments in the parts and materials market

Mobile devices, for example, consist of a multitude of parts and materials: touch panels, LCD panels, high-performance processors, large-capacity DRAM, flash memory, wireless LAN modules, GPS modules, accelerometers, electronic compasses, gyroscopes, and many more.

Although the competitiveness of Japan’s end product manufacturing industry—smartphones, mobile phones, TV receivers, and the like—is on the wane, exports of Japanese parts and materials supplied for these end products (in the global market) have remained solid. Japanese enterprises have high technological competencies in many areas of the parts and materials market. Therefore, as domestic device manufacturers struggle, attention is focusing on domestic parts and materials manufacturers that provide device parts. Despite their sales being small compared with those of communications device and electronic equipment manufacturers, many parts and materials manufacturers derive a large percentage of their sales overseas and maintain high operating profit rates (Figure 5-2-6-2).

The competitiveness of our enterprises in the parts