The Japanese have always been passionate about novelty and innovation. This interest was observed as early as 1543 by the first Portuguese settlers in Japan when the daimyo Taneshima Tokitaka, intrigued by their firearms, purchased two of them and ordered his sword smith to make copies. This tendency is still present today and it is particularly visible in the endless queues of people who are patiently waiting in front of the high tech stores prior to the release of any new technological tool or gadget.
More than everywhere else, it is crucial for the Japanese consumers to be the first adopters of a new technology and many people change phone, camera or computer as soon as a new version of their favorite machine becomes available. In the cases of smartphones however, this trend has been somewhat challenged, let us see why.
On Thursday night at 9 p.m. (11 hours before official release), more than a hundred people were already taking line in front of the Apple Store in Shibuya.
A typical Japanese mobile phone
Japan has always been at the forefront of mobile phone technology and up to very recently, the Japanese mobile phones (keitai denwa) had many functions that were completely unheard of in the west . To get some perspective, Japanese mobile phones were able to send and receive Emails as early as 1999 by connecting to the Internet via the i-mode, hence rendering SMS totally obsolete. Keitai got fitted with digital cameras the following year, evolved to the third generation smartphones in 2001, started downloading music in 2002, became able to facilitate electronic payments in 2004, and started to receive digital TV in 2005.
The Japanese have been used for years to rely on their mobile phones for most everyday tasks thanks to numerous useful functions that have little to do with making phone calls. Keitai can serve as as payment devices to make purchases, guides to finding street addresses, electronic replacement for metro or airline passes, interfaces for booking cinema seats and much more. Most of these tasks still require us to operate bulky external terminals or personal computers today.
Laptop equipped with a FeliCa card reader
The characteristic shape of the Japanese mobile phones, their customized designs, and their vivid colors have always been a source of amazement for non-Japanese, especially when their advanced use skills are demonstrated at the insane speed at which young girls type messages and navigate their devices.
Upon closer look however, even though the Japanese consumers love new products, they seem to be quite conservative when it comes to their phones. This is especially due to a whole keitai culture to which young people seem to be very attached. To illustrate the influence of keitai denwa on the Japanese culture, one can mention that there are whole genres of books and films that are solely dedicated to keitai-mediated love or drama stories. These are called "cell phone novels" (携帯小説 keitai shousetsu). In addition to be a technological tool, the mobile phone is therefore also a cultural item in Japan and this makes it difficult to challenge.
This sets quite a difficult environment within which foreign mobile phone companies have to operate with various degrees of success. The new smartphones such as iPhone and Android have, until quite recently, achieved rather disappointing sales results in Japan compared to that of other countries   .
Apple Store in Ginza minutes before the launch of the iPhone 4S
There are multiple reasons for this. First, as explained above, the Japanese did not really see the improvement that these apparels provided compared to their indigenous counterparts. A 2011 study by Forrester showed that the percentage of people regularly accessing the web using their mobile phones is still more than double in Japan compared to America, and triple compared to Europe (47, 22 and 12% respectively ) so the market here is quite different to start with. Secondly, the latest smartphones are comparatively expensive compared to most keitai. In addition to that, the Japanese consumers tend to purchase mainly from Japanese manufacturers, often trusting the name of the maker more than the actual specifications of their machines. Then, the uniform design and the lack of colors of the smartphones (mostly shipped in black or white) do not necessarily appeal to the Japanese sense of customization and exuberance. This is made even worse by the fact that from one version of the iPhone to the other, the outside look varies very little, hence making the owner look rapidly old-fashioned. Finally, Japanese consumers oddly seem to be very attached to the clamshell shape of their keitai and you will have a hard time finding any other shape in shops.
Apple Store in Ginza
There is a real paradox when it comes to the Japanese and their relationship to new technologies. Japanese consumers have a craving for new technologies but it does not mean that they are technologically savvy. The otaku fringe of the population is of course at the top of technological literacy but the rest of the consumers are comparatively surprisingly uneducated in that respect. The novelty itself is therefore often more of a sales argument than any technical specification or performance level. I remember going to buy a television set with my girlfriend and when I asked her to explain the fact that she wanted to spend almost double the amount of money on one TV instead of another whose characteristics seemed to me very similar. She responded that she did not understand any of the technicalities but that she just liked the look of the expensive model better, concluding that it alone justified the extra cost. Even though the economic bubble burst in the late 90's and although times are becoming tough in Japan just like everywhere else, many consumers still seem to operate on the basis cited above.
It is therefore understandable that in this context, the sales arguments put forward by the foreign smartphone companies can often fall flat in Japan. Some analysts actually suggest that most of the early adopters of the iPhone were already users of Apple products. It also seem that many iPhone users actually still own a keitai due to some non-overlapping functionalities. Amongst these, the most important one is the FeliCa technology which allows users to wave their phones over scanners in order to make payments for food, taxis, trains etc. The table beside (Table 1) shows a breakdown of the smartphone sales worldwide obtained from a study conducted in 2009 by Cisco Systems with a projection for the next five years, Japan achieving no better than Mexico. Since their publication, these figures have been shown to be largely underestimated but this sets a good example of the state of the smartphone market in Japan, and its projected future, as seen only two years ago. The next table (Table 2) shows the specific sales of iPhones per country based on the Mobile Metrics Report for April 2010 with Japan occupying the 14th position after Germany. No official figures have been released by Apple yet so the absolute values have to be taken with a pinch of salt but the relative ordering should be accurate enough.
If looked at carefully, the approach of the smartphone companies actually seems to be quite the reverse of that adopted by the keitai manufacturers. In Japan, it is the hardware that counts and the interfaces are often simple and even awkward, regardless of how complex and advanced is the apparel. It is an interesting contrast to illustrated by what Steve Jobs said about Apple, which he considered to be mainly a software company (see video below). The Japanese people however see the mobile phone as a stand-alone object that allows them to perform their everyday tasks independently and therefore, the back and forth connectivity between PC and smartphone is absolutely not desirable in the eye of most Japanese consumers. In a nutshell, the keitai is supposed to alleviate the need for personal computers and certainly not chain you back to it. However, still looking at that video shot in 2005, it is interesting to hear how Steve Jobs managed to take the portable music players market which was heavily dominated by Japanese companies and turn it around to his advantage, according to his own specifications. This gives a little bit of explanation on how the iPhone is finally starting to break in Japan, the land that started it all in terms of Smartphones and where most of the rules were set.
Steve Jobs confessing that Apple is fundamentally a software company.
We have seen that Japanese mobile phones have always had a significant advance on their western counterparts. The exportation of keitai however has never really worked out . The analogy with the Galapagos Islands visited by Charles Darwin comes from the fact that the keitai were developed in Japan, specifically co-evolving with the Japanese market and technology. Keitai are so ubiquitous and useful in Japan because of the willfulness of the major companies to work together and adopt common formats such as the smart card technology. Although it was developed by Sony, it became adopted by most service providers (communications, transports, media etc.) who installed compatible card readers and terminals. Once again we see here a great difference with the seclusive approach generally adopted by Apple over the years prior to Jobs' return.
This peculiar way in which keitai were developed makes them quite unsuitable for export. Indeed it would be unrealistic to expect that all other country would adopt and comply to one particular standard. This therefore limits quite a lot the transferability of the keitai's functionalities outside of Japan. Also, the clamshell shape of the keitai which is so dear to the Japanese (particularly its big keys) is far from popular in most other countries.
Crowd gathered in front of the Ginza branch of the Apple Stores on the day of the launch of the iPhone 4S
Even though they took a relatively long time to be adopted, smartphone do seem to have pierced today and they start to produce good sales results  . The latest figures suggest a 20% market sales in Japan this year. More and more smartphones can indeed be seen in the streets and trains these days.
The iPhone 4S pre-sales officially started but the presentation of the device has been met with mixed feelings since it was nothing like the revolution that users expected. Instead, it ended up to be more of a revamp of the iPhone 4. Now, most phone contracts in Japan last for two years and many people are considering waiting until next year for the launch of the iPhone 5 in order to be free of contractual commitment and enjoy the latest model rather than be stuck with an out-dated iPhone 4S when the 5 comes out. Some suggest however that the demand could be boosted by the emotional attachment of people to the brand following the recent passing of its founder Steve Jobs on October 5th 2011. Either way, this release of the iPhone 4S will probably a good indicator of the future sales potential of smartphones in the years to come so let's wait for the figures to be published...
Apple iPhone 4S keynote, October 2011
Some glitches have occurred during the launch of the iPhone 4S in Japan on October 14th as a system overload forced customers to wait for several hours before being able to purchase their mobile phones . The final figures regarding the number of people queuing to purchase the new iPhone seem to be over 200 people in Shibuya and 800 in Ginza. Even though no official data has been published yet for the Japanese market, inside sources at Softbank said to me that the pre-sales of the iPhone 4S have by far exceeded that of the iPhone 4.
Official launching of the iPhone 4S on Friday the 14th of October 2011 in Shibuya and Ginza Apple Stores.
- New York Times article: Why Japan’s Cellphones Haven’t Gone Global
- Japan: In a cell phone league of its own
- Mobithinking's latest mobile stats
- Smartphones may transform Japan's mobile market
- Why the Japanese hate the iPhone
- iPhone in Japan
- TechCrunch iPhone not selling well in Japan
- 10 million smartphones in Japan
- KDDI, Softbank launch new iPhone in Japan amid heated competition