Excellent article from NY Times:
At first glance, Japanese cellphones are a gadget lover’s dream: ready for Internet and e-mail, they double as credit cards, boarding passes and even body-fat calculators.
But it is hard to find anyone in Chicago or London using a Japanese phone like a Panasonic, a Sharp or an NEC. Despite years of dabbling in overseas markets, Japan’s handset makers have little presence beyond the country’s shores.
“Japan is years ahead in any innovation. But it hasn’t been able to get business out of it,” said Gerhard Fasol, president of the Tokyo-based IT consulting firm, Eurotechnology Japan.
The Japanese have a name for their problem: Galápagos syndrome.
Japan’s cellphones are like the endemic species that Darwin encountered on the Galápagos Islands — fantastically evolved and divergent from their mainland cousins — explains Takeshi Natsuno, who teaches at Tokyo’s Keio University.
This year, Mr. Natsuno, who developed a popular wireless Internet service called i-Mode, assembled some of the best minds in the field to debate how Japanese cellphones can go global.
The only Japanese handset maker with any meaningful global share is Sony Ericsson, and that company is a London-based joint venture between a Japanese electronics maker and a Swedish telecommunications firm.
And Sony Ericsson has been hit by big losses. Its market share was just 6.3 percent in the first quarter of 2009, behind Nokia of Finland, Samsung Electronics and LG of South Korea, and Motorola of Illinois.
Yet Japan’s lack of global clout is all the more surprising because its cellphones set the pace in almost every industry innovation: e-mail capabilities in 1999, camera phones in 2000, third-generation networks in 2001, full music downloads in 2002, electronic payments in 2004 and digital TV in 2005.
Japan has 100 million users of advanced third-generation smartphones, twice the number used in the United States, a much larger market. Many Japanese rely on their phones, not a PC, for Internet access.
Several Japanese companies are now considering a push into overseas markets, including NEC, which pulled the plug on its money-losing international cellphone efforts in 2006. Panasonic, Sharp, Toshiba and Fujitsu are said to be planning similar moves.
“Japanese cellphone makers need to either look overseas, or exit the business,” said Kenshi Tazaki, a managing vice president at the consulting firm Gartner Japan.
At a recent meeting of Mr. Natsuno’s group, 20 men and one woman crowded around a big conference table in a skyscraper in central Tokyo, examining market data, delivering diatribes and frequently shaking their heads.
The discussion then turned to the cellphones themselves. Despite their advanced hardware, handsets here often have primitive, clunky interfaces, some participants said. Most handsets have no way to easily synchronize data with PCs as the iPhone and other smartphones do.
Because each handset model is designed with a customized user interface, development is time-consuming and expensive, said Tetsuzo Matsumoto, senior executive vice president at Softbank Mobile, a leading carrier. “Japan’s phones are all ‘handmade’ from scratch,” he said. “That’s reaching the limit.”
Then there are the peculiarities of the Japanese market, like the almost universal clamshell design, which is not as popular overseas. Recent hardware innovations, like solar-powered batteries or waterproofing, have been incremental rather than groundbreaking.
The emphasis on hardware makes even the newest phones here surprisingly bulky. Some analysts say cellphone carriers stifle innovation by demanding so many peripheral hardware functions for phones.
The Sharp 912SH for Softbank, for example, comes with an LCD screen that swivels 90 degrees, GPS tracking, a bar-code reader, digital TV, credit card functions, video conferencing and a camera and is unlocked by face recognition.
Read the complete article here.
Follow discussion on this article at Forum Oxford here.
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