Japan: We're losing to Apple, and here's why

First, the company is quite old (1889, I believe). It started out manufacturing playing cards, yet had a pretty remarkable evolution after its post-war CEO (a member of the founding family, surnamed Yamauchi) took over. While it was a top-down organization, Yamauchi recognized and encouraged some out-of-the box and risky thinking. The company at one point was invested in things like hotels and food, but started to develop a new business in the 1970s around video games. Keep in mind that in 1977 video games were not nearly as popular as they are now, and the nearest product line Nintendo had at the time was toys. Famicom/NES was launched in the mid 1980s, at a time when the videogame market was in a slump (this was post-Atari 2600). It turned out to be a massive hit, that really kept Nintendo on top of the console market until Sony came out with the PlayStation.

The Wii is another example of an innovative approach to product design. It was not designed by focus groups, as the company was worried about leaks. Rather, the design of the console and controller came from an internal group made up mostly of career Nintendo engineers like Shigeru Miyamoto (of Mario Bros. fame). Yamauchi's successor, Satoru Iwata (himself a former game developer) was also on the team. They recognized that they couldn't win the hardware arms race with Sony and Microsoft, a race that focused on specs and pleasing hardcore gamers. They thought of a different set of users, and not only kids and senior citizens waving around a Wiimote. The team even considered how housewives would react to a new console in the living room, and therefore designed a box that was sleek and stylish, and not much bigger than a stack of DVD boxes.

There's a great interview series with the Wii design team, called "Iwata asks". It talks about many of the issues they had to overcome, and the prototyping process. It was published on Nintendo websites all over the world -- I think Iwata wanted to do a little victory lap, and get on record how they came up with the brilliant ideas behind the Wii. You can start reading it here:

http://us.wii.com/iwata_asks/wii_console/

The reason why people are leaving the Japanese phones for the iPhone is because Japanese phone interfaces SUCK BALLS. And they have ALWAYS sucked. I suffered through 5 years of one phone after another being such a terrible user experience that I think it scarred me for life. And don't even get me started with Sony, who replaced the perfectly functioning joypad in their phones (which USED to be the best) with that stupid "sony" sidewheel they spent so much money developing and insisted on putting in every product, whether it made sense or not.

The fact remains, emoji ARE important. Easy text input IS important. Being able to pay for stuff at the combini with your phone IS important. It's just that having apps, and a UI that doesn't suck balls is even more important.

iPhone took YEARS to penetrate the Japanese market, precisely because it didn't have the features that customers wanted, and they spoke with their wallets, buying the Japanese models. But now that app and smartphone fever has finally landed, people are more willing to compromise.

But the point is, they SHOULDN'T have to compromise. That's just Apple deciding what people will use, even if it's the wrong thing. It's taking a little bit of good advice to such an extreme that what appears on the surface "visionary" would upon closer inspection reveal itself as insanity. Hubris has a way of creeping up on you when your power remains unchecked for too long.

Yeah, Sony used to be good, but then again they used to make good products. Once their arrogance got the better of them, their products started to suffer. My first Vaio was awesome. Sleek, light, and fast. My last Vaio was practically useless out of the box. It took me 3 HOURS to remove all the crapware they loaded into it, which slowed it down so badly that it was almost unusable. Oh, and it had that stupid useless Sony sidewheel on it, and their incompatible-because-we-said-so memory stick port too. I shudder to think of how the average user would endure with such a monstrosity.

The reason why companies like Apple, Facebook, and Google inspire is because they do things with conviction. They are executing on vision. They don't let internal processes become ritualized. Key executives don't stick around long when the fire goes out in their soul, they move on. In Japan, nobody knows what they want to do. Japanese manufacturers feel the heat from Apple AND Samsung, they're scared of China's growing clout yet they can't figure out what they want to do.

They can't race to the bottom with an aging population with an acquired taste for high median salaries. They've lost the drive and intellectual fortitude to innovate in all but very limited areas. They don't want to relinquish the "made in Japan" brand, even though the Chinese have shown that with the right management in place, they can make products better and cheaper.

I don't know where this paralysis comes from. Maybe the Japanese think all their woes stem from some economic missteps from the bubble era and once these are righted they can happily resume their old formula for success. Maybe over two decades of stagnation and slow decline lead to a death by a thousand cuts along with the false security of high savings.

For whatever reason, Japan is simply ill-prepared to compete on any level in the global economy. Perhaps the greatest Achilles heel for Japanese manufacturers is not so much the core hardware technology but their utter disregard for the software that drives so many electronics. If you go to any electronics store in Japan you'd be amazed by the utterly useless features manufacturers try to differentiate themselves with (this camera can take pictures in the dark while shaken vigorously, this one makes your face look pretty, etc.).

When the iPhone came out I was one of the skeptics who thought the lack of things like TV reception, RFID cards (used for train passes), the lack of emoji (back then), or the ability to render ketai/mobile web sites wouldn't go down well with customers. However, in the greater scheme of things it didn't matter. Now all the feature phone manufacturers are scuttling decades worth of in-house code to work on Android.

Sony and many other Japanese companies once pioneered new products - and Sony was the ideal that Steve Jobs said he aimed for. In fact, it's pro-Japanese. Just not its present state.

Christensen (innovator's dilemma guy) thinks that present-day Japan suffers from large companies: the disruptions that are tomorrow's riches start out small and unpredictable. Small is simply not interesting to a big company; unpredictable even less so. In post-war Japan, companies were small: excited about small opportunities; and having little to lose, unafraid of risk. (In contrast, he says, Silicon Valley incumbents often populate their usurpers, such as Fairchild to Intel, when frustrated workers want to exploit something uninteresting to management. This doesn't happen in Japan.)

The enigma here is Apple. The largest company in the world, yet acts like a startup in terms of risky new products in unproven new markets that start out small:

launching a product without consumer research is risky.

Perception is very important. For instance, a discount store would stack up items and use cheap-looking layout to create the perception that they are cost cutters.

Similarly, a luxury item should be perceived as objet d' art where functionality is clear and straighforward.

Viewed from this perspective, an iPod isn't about inbuilt graphic equalizers. It is about frictionless and effortless getting-music-into-your-hands ease. I remembered that even the Queen wanted an iPod. It is obvious one would know how to use one.

It is the same with the iPhone. The less the engineers talk about dual-core, split antenna, the more they focus on how users interact with their devices. Even the app store is actually a luxury bling. It signals all the things are are potentially available "at your service" without actually cluttering up your device.

I can't quite pin it down, but when you peel back the vast homogeneous conformist mass consumer oriented society, there's a really wonderfully quirky, genuinely interesting underground scene that's so vibrant, so full of energy, that it seems like it's about to burst into the mainstream in the same way the beatnick and then hippy movement did in the West.

Steve Jobs came out of that movement, who's to say we aren't about to see the birth of the next Steve Jobs in Japan? Only his parents were in a banjo kettle drum band in Osaka that played basement coffee houses and did cosplay on the weekends to super indie Manga series that explores the meaning of identity as a pop star with only digital, manufactured fans.

In the States Vietnam was the flashpoint that really caused people to gel around the question authority hippy movement, perhaps some current or future event will cause the same with the Japanese youth.

A lot has been written about the cultural views of risk/failure and why nations like the US are kicking butt over Japan and India where you're not allowed to fail.

Japan has shown that it can stage a comeback when the nation as a whole can no longer deny it has been defeated and must reinvent itself to move forward. It happened after WWII and will likely happen in another 10 or 20 years if things continue the way they have.

I liked his point that today's Japanese executives are all corporate drones, salarymen that worked their way up through the system and aren't going to boldly design anything.

It's known that humans are ultimately emotional beings, they think with their feelings regardless of how rational they believe they are. The iPhone is the ultimate user experience, titillating the senses and the emotions more than any PDA out there with 1000s of convenience features. It's similar to BMW, Steve Jobs' source of inspiration for his marketing strategies. You want the device on a primal level, it's sexy, it's a status symbol, the release of every iPhone is a cultural event, a celebration of incredible UX.

I never ever get that emotional involvement when looking at the latest super-souped-up swiss-knife phone from Japan.

So the challenge is that as a team you are putting together something that probably everyone thinks is useless (or at least only marginally useful), and yet to have to stay focussed on the problem(s) you are addressing and take care to address them cleanly and with style.

It is actually in those places where others cannot see that some of the best ideas can be brought to fruition. Of course releasing too early can lead to disaster (ask the Color folks on that one, at least I perceived it as a PR disaster).

There is a particularly irritating component of Japanese nationalism which holds that Japanese are unique, as in physiologically unique, among the world's population (down to having different immune systems, in fact). In seems natural for a Japanese company that it would essentially have to act as two companies, one for exported products and another for domestic ones. It's very inefficient. It's also remarkably stupid as the iPhone demonstrates - what sells anywhere else will also sell here, and vice versa (I would always get comments on my phone when I went overseas and had to tell people the model was only available in Japan, to their disappointment).

Contrast this with most other large manufacturers where they will have more-or-less the same products globally, with some localization.

Actually the solution for Japan is rather obvious and I suspect many know it: stop acting as though you're an alien race crash-landed on planet Earth a thousand years ago. Start treating the global market the same as the domestic one, and Japanese the same as Korean, Swedish, Canadian, whatever. This will be a hard lesson for the Japanese national psyche to digest, and I don't know that they're up for it. It's entirely plausible they'll spend the next 50 years making stunning breakthroughs in the fields of (nursing home) robotics and new delivery mechanisms for god-awful Japanese broadcast television.