[Column] iPhone Sheds Light on Weakness of Japanese Handset Makers

Aug 15, 2008
Toshiyuki Oomori

What is the attraction of the iPhone? -- I have been wondering this for quite a long. The iPhone 3G, which I bought for personal use, creates a sense of comfort that tempts me into fiddling it for no special reason.

There is no doubt that Japanese mobile phones are also well-made. Many of their functions such as 1seg, e-payment and camera modes are even superior to the iPhone's. Nevertheless, they lack the iPhone's intriguing charm that makes people feel like using it.

It isn't a case of it "being no good," but rather "that's too bad." Something is not right with Japanese handsets. The iPhone has a lot of shortcomings, but hardly gives the impression of "being too bad," which Japanese mobile phones do. I think anybody who actually uses the iPhone would probably understand what I am trying to express.

What on earth is the iPhone? To approach the answer to the question, I interviewed Takeshi Natsuno, who left NTT DoCoMo Inc in June 2008 (the interview is served in the August 11, 2008 issue of Nikkei Electronics). I interviewed him because I was curious to know what Natsuno, who had led the i-mode business for a long time, thought of the iPhone.

Unexpectedly, or expectedly to a certain degree, Natsuno spoke of the iPhone almost in the highest terms. He even said, "I believe the iPhone is closer to the mobile phone of the future, compared with the latest Japanese mobile phones." He actually has and uses an iPhone 3G, he said.

Natsuno considers the source of the iPhone's attraction is "project leader Steve Job's solid faith." In fact, there are often influential leaders with strong faith behind hit products, such as Ken Kutaragi behind Sony Computer Entertainment Inc's "PlayStation" and "PlayStation 2" home game consoles and Satoshi Iwata behind Nintendo Co Ltd's "Nintendo DS" and "Wii." It is the leader's positive vision that enables employees to form a single unit and work together to realize the vision.

Natsuno raised a number of issues that Japanese mobile phone manufacturers are facing. "Too many of them are negative about new ideas," "they have lost their edge as they determine everything based on a collegial system," and "even if someone has potential, he or she isn't assigned to a responsible position at a Japanese company," he said. Japanese mobile phones, which are innocuous but lackluster, might grow in such an environment, where no one takes leadership.

However, I think it is wrong to only blame it on manufacturers. In Japan, mobile phone manufacturers have developed handsets in line with specifications determined by carriers for ages. Mobile phones are nothing but carriers' products, which are only developed and manufactured by contracted manufacturers. It is natural that manufacturers with no stake as a concerned party cannot create innovative products.

This structure is about to change for sure due to the emergence of the iPhone. Previously, Japanese mobile phones including content, handsets and networks have all been provided to users through carriers. In other words, mobile phone carriers were in the center of the business model.

On the other hand, Apple Inc exclusively "provides application software," which is the essence of the iPhone. SoftBank Mobile is only providing its networks and marketing the product (the iPhone) as an agent.

The iPhone has shown that it is not impossible for manufacturers to take the initiative, even in the mobile phone business. The emergence of the iPhone itself is about to sweep away the "reason why Japanese manufacturers can't make an iPhone."

Given the raw power of Japanese manufacturers, it is well within their capacity to develop a mobile phone with attractiveness and convenience beyond that of the iPhone, I believe. In the meantime, I do not expect "complacent manufacturers" that simply supply the products desired by carriers, to survive long. I have high hopes for the emergence of a powerful manufacturer from Japan that can create a business by itself.


Correction Notice: Because of a translation error, we incorrectly published the name of the interviewee. The correct name of the interviewee is Takeshi Natsuno.