Houston Community News >> Apple's Fight in Japan
1/18/2008 (Sify) -- Japan may be Steve
Jobs' great Asian hope. But are Japanese consumers getting infected with
iPhone fever as people in so many other countries have?
The nation has emerged as the front-runner to launch Apple's iPhone in Asia amid news that China's leading mobile operator has ended negotiations to carry the sleek handset.
Though China Mobile took a pass, reportedly because of Apple's steep revenue-sharing terms, Japan's No. 1 and No. 3 carriers--NTT DoCoMo and Softbank--have a strong interest in carrying the iPhone, says Michito Komura, a Japan-based IDC analyst. Either could be a candidate to release the phone within 2008, he adds.
Signing an Asian partner is key for Jobs, who has set a sales goal of 10 million iPhones by the end of the year. DoCoMo, which holds about 54% of the country's cellphone market, is keeping the door open. The company confirmed that Chief Executive Masao Nakamura recently met with Steve Jobs. Shuichiro Ichikoshi, senior manager of DoCoMo's international public relations group, also said DoCoMo is considering buying handsets "from diverse manufacturers both domestically and abroad," but declined to comment more specifically on the iPhone.
Even if Japanese carriers are intrigued by the iPhone, Japanese consumers may prove elusive. Japan's cellphone market is full of unique challenges that make it difficult for foreign companies to succeed. What's more, Japanese customers already have a fuller and more intriguing set of cellphone alternatives than consumers in many other countries.
Japan is dominated by three carriers, namely DoCoMo, KDDI and Softbank. Compare that to the U.S., which has four major carriers and many regional players. Until 2004, reliance on a proprietary, homegrown technology called PDC effectively closed the Japanese cellphone market to outsiders.
The Japanese carriers are as powerful as American operators. They decide when a new phone comes out and what kinds of phones will be developed, notes Martin Roll, author of Asian Brand Strategy.
Then there are the sophisticated Japanese consumers, who are notoriously picky about product design, usability and quality, notes Roll. To win them over, foreign brands must study the Japanese market and adopt suitable features. That's tricky for global firms like Nokia, Motorola and Samsung, which design and manufacture their phones abroad. It's a recipe that gives domestic brands, such as Sharp, Panasonic and Sony Ericsson an edge. (Sony, which ranks No. 4 in handset sales worldwide, often develops different phones for Japan and the global market.)
The upshot is that the Japanese have a clear vision of the ideal cellphone--and it doesn't much resemble the iPhone. Japanese consumers "prefer innovation within an established area that they can imagine," says Roll. Take DoCoMo's 905i series of premium phones. Priced around $460, sleek and packed with multimedia features, they're worthy of being called iPhone killers.
Nicknamed "All-In Global Phones," they offer, as standard features, GPS, motion-sensitive games, mobile TV and high-speed music and video downloads. Many also support videophone, mobile wallet services that turn phones into credit cards and security features, such as identification by voice or fingerprint. Released in late November, the series has already produced four of the five best-selling phones in Japan, according to market researcher GfK Japan.
The 905i lineup reveals what kind of competition the iPhone will face. Eight of the 10 phones sport a clamshell design, in contrast to the iPhone's candy-bar style. Their dimensions all fall within a certain range--slightly shorter and narrower than the iPhone--that can be held securely in the palm and slipped easily into most pockets.
The real trump card for Japanese handsets may be their screens. Screen quality is so important to Japanese consumers that cellphone manufacturers have begun branding their handsets the same way they do their TVs--Viera for Panasonic, Aquos for Sharp and Bravia for Sony. Consumers will often invest in the same brand for their handset and their home TV, say analysts.
Screens are a selling point mostly because the Japanese are big fans of mobile TV. Unlike the U.S., where TV-on-the-go is a nascent and pricey industry, Japanese consumers enjoy mobile TV free of charge, with plenty of fresh content. Under a system called "One Seg," phones can directly access television broadcast signals. Like larger LCDs, these screens display crisp images in up to 17 million colors.
In Japan, a high-quality screen doesn't necessarily mean a touchscreen. The kind of "multi-touch" navigation that has made the iPhone famous is virtually absent in Japan. DoCoMo doesn't even offer a touchscreen phone. Analysts note that the Japanese prefer handsets they can hold in one hand and operate (Web browsing, e-mailing) with a thumb. That kind of navigation isn't as convenient on the iPhone, with its touchscreen keypad.
Bringing the phone to Japan would also require major upgrades. The current iPhone won't work in Japan. A faster, 3-gigabyte version, expected to be released sometime this year, could. Customizing the handset to support the Japanese would incur both hardware and software costs, says Komura.
By the end of the year, the iPhone may have an additional competitor: Google phones. Both DoCoMo and KDDI are founding members of Google's Open Handset Alliance, which plans to release an open operating system for phones by the second half of 2008.
These factors are expected to blunt the iPhone's popularity in Japan, despite the country's fervor for all things Apple. Fortunately for Jobs, the Japanese may be attracted to the iPhone out of emotional attachment to Apple, rather than awe over its technology. "They like anything cool, new and trendy, to a greater extent than anywhere else in the world," says Roll. Will novelty be enough? Only an iPhone launch in Japan will tell.
The nation has emerged as the front-runner to launch Apple's iPhone in Asia amid news that China's leading mobile operator has ended negotiations to carry the sleek handset.
Though China Mobile took a pass, reportedly because of Apple's steep revenue-sharing terms, Japan's No. 1 and No. 3 carriers--NTT DoCoMo and Softbank--have a strong interest in carrying the iPhone, says Michito Komura, a Japan-based IDC analyst. Either could be a candidate to release the phone within 2008, he adds.
Signing an Asian partner is key for Jobs, who has set a sales goal of 10 million iPhones by the end of the year. DoCoMo, which holds about 54% of the country's cellphone market, is keeping the door open. The company confirmed that Chief Executive Masao Nakamura recently met with Steve Jobs. Shuichiro Ichikoshi, senior manager of DoCoMo's international public relations group, also said DoCoMo is considering buying handsets "from diverse manufacturers both domestically and abroad," but declined to comment more specifically on the iPhone.
Even if Japanese carriers are intrigued by the iPhone, Japanese consumers may prove elusive. Japan's cellphone market is full of unique challenges that make it difficult for foreign companies to succeed. What's more, Japanese customers already have a fuller and more intriguing set of cellphone alternatives than consumers in many other countries.
Japan is dominated by three carriers, namely DoCoMo, KDDI and Softbank. Compare that to the U.S., which has four major carriers and many regional players. Until 2004, reliance on a proprietary, homegrown technology called PDC effectively closed the Japanese cellphone market to outsiders.
The Japanese carriers are as powerful as American operators. They decide when a new phone comes out and what kinds of phones will be developed, notes Martin Roll, author of Asian Brand Strategy.
Then there are the sophisticated Japanese consumers, who are notoriously picky about product design, usability and quality, notes Roll. To win them over, foreign brands must study the Japanese market and adopt suitable features. That's tricky for global firms like Nokia, Motorola and Samsung, which design and manufacture their phones abroad. It's a recipe that gives domestic brands, such as Sharp, Panasonic and Sony Ericsson an edge. (Sony, which ranks No. 4 in handset sales worldwide, often develops different phones for Japan and the global market.)
The upshot is that the Japanese have a clear vision of the ideal cellphone--and it doesn't much resemble the iPhone. Japanese consumers "prefer innovation within an established area that they can imagine," says Roll. Take DoCoMo's 905i series of premium phones. Priced around $460, sleek and packed with multimedia features, they're worthy of being called iPhone killers.
Nicknamed "All-In Global Phones," they offer, as standard features, GPS, motion-sensitive games, mobile TV and high-speed music and video downloads. Many also support videophone, mobile wallet services that turn phones into credit cards and security features, such as identification by voice or fingerprint. Released in late November, the series has already produced four of the five best-selling phones in Japan, according to market researcher GfK Japan.
The 905i lineup reveals what kind of competition the iPhone will face. Eight of the 10 phones sport a clamshell design, in contrast to the iPhone's candy-bar style. Their dimensions all fall within a certain range--slightly shorter and narrower than the iPhone--that can be held securely in the palm and slipped easily into most pockets.
The real trump card for Japanese handsets may be their screens. Screen quality is so important to Japanese consumers that cellphone manufacturers have begun branding their handsets the same way they do their TVs--Viera for Panasonic, Aquos for Sharp and Bravia for Sony. Consumers will often invest in the same brand for their handset and their home TV, say analysts.
Screens are a selling point mostly because the Japanese are big fans of mobile TV. Unlike the U.S., where TV-on-the-go is a nascent and pricey industry, Japanese consumers enjoy mobile TV free of charge, with plenty of fresh content. Under a system called "One Seg," phones can directly access television broadcast signals. Like larger LCDs, these screens display crisp images in up to 17 million colors.
In Japan, a high-quality screen doesn't necessarily mean a touchscreen. The kind of "multi-touch" navigation that has made the iPhone famous is virtually absent in Japan. DoCoMo doesn't even offer a touchscreen phone. Analysts note that the Japanese prefer handsets they can hold in one hand and operate (Web browsing, e-mailing) with a thumb. That kind of navigation isn't as convenient on the iPhone, with its touchscreen keypad.
Bringing the phone to Japan would also require major upgrades. The current iPhone won't work in Japan. A faster, 3-gigabyte version, expected to be released sometime this year, could. Customizing the handset to support the Japanese would incur both hardware and software costs, says Komura.
By the end of the year, the iPhone may have an additional competitor: Google phones. Both DoCoMo and KDDI are founding members of Google's Open Handset Alliance, which plans to release an open operating system for phones by the second half of 2008.
These factors are expected to blunt the iPhone's popularity in Japan, despite the country's fervor for all things Apple. Fortunately for Jobs, the Japanese may be attracted to the iPhone out of emotional attachment to Apple, rather than awe over its technology. "They like anything cool, new and trendy, to a greater extent than anywhere else in the world," says Roll. Will novelty be enough? Only an iPhone launch in Japan will tell.
(Contributed by Sify)