Why Japanese smartphones never went global
- — 11 July, 2012 22:45
Once the envy of overseas markets, Japanese mobile phones are increasingly becoming a rarity in the coutry due to the popularity of smartphones such as the Apple iPhone
Japan may have remained untouched when it came to technological innovation, such as the introduction of smaller devices with bigger screens, as well as streaming television broadcasts with 1seg technology in 2006, the introduction of Apple’s iPhone in 2007 and smartphones in general has shaken up the market. Originally the trend setter, Japanese handsets are starting to have their once lucrative domestic market eroded away by imported smartphones. This has meant that the window for Japanese phones going global has not only narrowed, but possibly closed entirely. “Looking at the landscape of the global market, Apple and Samsung have gained ground in the fast growing smartphone market,” Hashimoto said. “It would be diffi cult for them to turn this trend around and continue to supply mobile phones with features unique in the Japanese market."
Hashimoto adds that the major vendors have in recent years suffered from aggressive market penetration in Japan by foreign vendors, as well as challenges in their core business globally caused by the Tohoku earthquake and tsunami, and the floods in Thailand. “It seems to me that it would be extremely diffi cult for them to take a risk and justify an aggressive investment to enable them to compete against Apple and Samsung in the global market,” he said. While he does not believe that Japanese phones will disappear completely, he does foresee some features found in the phones in Japan such as Near Field Communication (NFC) chips appealing to the global market. “However, that technology requires the collaboration of other industries, such as retail stores, airlines, and banks, which could prove to be very challenging,” Hashimoto said.
When Kimura considers whether Japanese vendors are able turn this situation around and claim a larger market share overseas, he also feels that it may be too late. His reasoning for this is while Korean vendors have been able to set up effi cient mass production methods for good quality products that are accompanied by strong logistics, Japanese vendors have traditionally trailed in these areas on a global level. “While Japanese mobile technology is good, it is not on the same level as what can be found in Android and iOS devices,” he said. “Unless there is a major change in the Japanese mobile industry, I think it would be hard for Japanese handset vendors to market their products overseas and see success in today’s market.”
iPhone: Is it Big in Japan?
In a market as unique as Japan's, it is no surprise that overseas handset vendors faced an uphill battle in selling their devices in the country. Industry heavyweight, Nokia, gave it its best shot, but after years of failing to make inroads in the market, it withdrew from the market in late 2008 and its luxury sub-brand Vertu in middle of 2011. But with Apple’s behemoth, the iPhone, continually wowing consumers worldwide generation after generation, did it manage to succeed where other had valiantly tried and failed?
When the iPhone 3G launched in Japan in the middle of 2008, it failed to make a splash in the market. While there was initial interest by consumers for its then large touch screen and general goodwill for past Apple products such as the iPod, it did not catch on. The issues consumers had at the time was the lack of emoticons available for emails, the expensive pricing of the yearly plan and the lack of Japanese-centric apps on the iTunes App Store. Japanese consumers had also grown used to functions such as NFC chips and 1seg in their handsets, which the standardised iPhone lacked.
When the iPhone 3GS was released the following year, it was a different story. Apple incorporated the emoticons in a firmware update, the pricing was more manageable and Japanese apps were growing in the App Store. The increased processing speed of the 3GS meant that consumers overlooked the lack of NFC and 1seg, although they could watch 1seg with a separate add-on if they wanted too as well. The momentum continued to build with the release of the iPhone 4 in 2010, and despite the 2011 Tohoku earthquake and tsunami putting a dent on consumer confidence, the iPhone 4S enjoyed record sales last year and is now supported by two of the three major phone networks in Japan, Softbank and KDDI.
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Comments
Reno J. Tibke
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Excerpted from my "Japanese Technology from the Future Friday" piece, March 10, 2012:
"Apple is doing very well in the Japanese market – they now dominate not just smartphone sales (26%+, According to IDC in March), but mobile phone sales as a whole. Sure, Apple has a state of the art product and ecosystem, but they had a huge lead in another way… and if you’re dorky enough, the other is much more interesting!
See, prior to the iPhone, Japan was heavily populated with various, ummmm…, phones of only average intelligence – not simple feature phones, because they could still do a lot of cool stuff (live TV, mobile payment, GPS, etc.), but mobile companies hadn’t really made the connection and communicated to customers that the internet is the internet for any device.
As an example, plenty of people here still think their phone needs its own dedicated email address – and the carriers still push it. It made a certain sense, because home connections were much slower to take off here, so somewhat ironically, the phone was the internet, conceptually. Moreover, in the beginning, carriers were only building phone-based mail software. Of course it was still just data, and anyone anywhere in the world could email the address, but the Japanese rightly thought of it as emailing the phone itself. See, the Japanese really wanted smartphones, but they just didn’t know what they were. There was a certain disconnect (pun nailed).
So the iPhone 3GS steps into the market, and things change. Suddenly people begin to realize that the actual internet was on the phone. In fact, until about 9-10 months ago, the term “smartphone” really hadn’t hit the collective consciousness here.
They get it now, and, amusingly, over here that hard "t" and the fricative "f" don't make it into product names. Can you say "sue ma hone?" Yep. Just like that.
There used to be an archaic Blackberry here and there, but before the iPhone, nothing like an App Store or iTunes existed in Japan – and no one else jumped into the game until very recently. Now that Apple’s been stealing market share in a big way with the 4 and 4S, domestic makers, some even using Android, are scrambling to catch up, call anything a "sue ma hone," build apps, and get in the game."
Hope this adds to the discussion!
Reno J. Tibke
www.anthrobotic.com