Apple's iPhone in Japan - Has Apple Given Up on the iPhone for Japan?

As more time passes without any official word from Steve Jobs about Japan and the iPhone, one cannot help wondering if Apple is just going to give up on Japan as a serious market and instead just try to palm off a minimally-localized US version.

I have previously talked at length about the strengths and weaknesses of the device in relation to the Japan market, and what strategy Apple should adopt for selling the iPhone in Japan, but the latest news from Cupertino suggests that they are losing their focus, and losing their customers, despite having just about the most technically impressive music player (the iPhod Touch) and mobile phone (the iPhone) on the market today.

First, the iPhone, despite being adored by Europeans, is not selling very well over there as consumers are used to getting subsidised handsets and short-term contracts, so a preium-priced and locked phone is not an attractive purchase. These sentiments may be repeated when, or if, Apple try to sell the iPhone in Japan. Indeed, one market analyst at Banc of America, Scott Craig, has lowered his iPhone sales estimates; remember Steve Jobs promised 10 million sales by the end of the year. Other analysts are urging Apple to produce a 3G phone; it would be market suicide if Apple did not have 3G support for the iPhone in Japan. There also seems to be signs of the iPod Touch and other iPods dropping off in sales, but considering Apple have managed to just about dominate and saturate the market, the only way is down.

One of Apple's latest announcements was that the email component of the software is being rejigged to appeal to the mobile warrior wielding a BlackBerry by adding support for Microsoft Exchange; this is a great move to address the US CrackBerry addicts, but in Japan the sales of this device can be counted on the fingers of one hand. Mobile samurais are a rare breed indeed, so this move will do absolutely nothing for those awaiting the appearance of the iPhone in Japan.

The other big announcement they had was of the iPhone SDK and App Store, which is a plus, as it is an official way for people to develop specific applications that can address the Japanese iPhone market. There will be serious shortcomings with the device when it eventually appears in Japan, so there is now a way for the gaps to be filled. However, given that the applications will more than likely not be free, it becomes a harder sell if people realize they have to spend another 10,000 yen buying assorted tools to plug the gaps left by Apple.

This recent spate of annoucements could have been a perfect time for Apple to announce a Japanese iPhone, but once again they have not addressed this market, and as time passes and passions cool, it becomes harder and harder for Apple to sell Japan the iPhone. Perhaps there are problems that they cannot talk about; for instance, are there problems upgrading the hardware to handle the 3G network? Remember that 3G was also not mentioned in the press releases. One can easily imagine that supporting this would require a physically larger chipset and more power consumption, so are there serious engineering problems to get a 3G iPhone to meeting Apple's exacting requirements?

Apple now have a perfect platform and perfect technology, but no perfect use for the iPhone in Japan. Use cases like mobile payment and mobile 1-seg digital television are what sells Japanese customers phones (although most users leave these features idle) so to the Japanese the iPhone looks just like an iPod Touch with an expensive phone contract that ties them to last century's email functionality for two more years. Why buy?

Given these factors above, it is little wonder that people are beginning to wonder if they will ever see Apple do the work required to make the iPhone in Japan a success. You can follow further developments in this saga and other breaking news from Japan on the iPhone at http://whatjapanthinks.com/tag/iphone/

Ken Yasumoto-Nicolson researches Japanese surveys and opinion polls on his blog, covering topics as diverse as Apple's iPhone and Japanese emoticons, with most of the material exclusively translated and provided for free.

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