Japanese Cell Phones: From Evolution to Extinction?

Japanese cell phones, called “keitai” by the Japanese, are the savviest line-up of mobile cell-phones you’ll ever set your eyes upon. New models sport features such as a 12-megapixel camera, waterproof casing, GPS navigation, live video feed, e-Money capabilities, and more. While the world continues to embrace their “generation 3.0″ cell phones, the Japanese are texting away on their “generation 3.9″ counterparts.

This might make you want to travel to Japan, buy a cell phone, and use it back at home. What greater trophy can you obtain in Japan than one of these enigmatic technological marvels? You can dazzle your friends with your newfound buddy: the expatriated Japanese cell phone. You might even fancy giving it a Japanese name: like “Mr. Wasabi.”

Unfortunately, for those of you who just opened up a new internet tab to book the next flight to Japan, the abovementioned scenario is just not feasible. Japanese cell phones are compatible only in Japan.

For instance, if you were in Japan, you can use your phone as a train ticket. The “mobile Suica” service, developed by Sony, spares commuters from having to buy a ticket and allows them to use their phones instead, which greatly speeds up the flow of commuters (this helped alleviate congested public rail services, and, I suspect, also breathed new life into Sony, which has been in ailing health for quite some time now). However, the Suica service is provided only in Japan. A Japanese cell phone won’t be able to purchase train tickets for railways in anywhere else in the world.

It’s not just the “mobile Suica” service that’s incompatible abroad. The phone itself literally cannot be used anywhere else in the world (except, perhaps, as a paperweight). While the world uses 3G for cell phone coverage, Japan continues to use its unique W-CDMA and CDMA2000 standards. In other words, unlike other phones, you can’t just take out your SIM card from your old phone and swap it into your new one.

Looks like “Mr.Wasabi” won’t be going West for a while.

Many Japanese engineers, economists, and university professors liken this phenomenon to the animals living on the Galapagos Islands. For those rusty on Charles Darwin, the Galapagos Islands was where Darwin ironed out his theory of evolution in his iconic work The Origin of Species. Through natural selection, the animals of the Galapagos Island became more suited to their environment. The same can be said of Japanese cell phones. They are tailored to meet the needs of the home market, are synchronized with Japanese carrier standards, and are deviating farther and farther away from the global standard.

This would be less of a problem if the Japanese population wasn’t shrinking faster than you could jump ship from a ship taking water. With the inevitable downsizing in the number of domestic consumers, the Japanese cell phone industry will have to start setting its binoculars outside of the Japanese islands.

Some lawmakers have began contemplating mandatory “SIM-free” laws, which would be the first step towards making Japanese cell phones compatible with other carriers. In foreign countries, there are already laws in place which mandate cell phone companies to “unlock” their phones after a certain period of time.

After many years of “natural selection,” Japanese cell phones have become the most advanced in the world. With legal reform and some hardware tweaking, the phones can be sold aggressively abroad.

Otherwise, they’ll just continue to evolve… and become extinct.

//By Ryo TAKAHASHI

18 Responses to “Japanese Cell Phones: From Evolution to Extinction?”

  1. Shogo Okuda says:

    This is an interesting topic because Japanese cell phone market is unique compared to that of rest of the world. I personally think the marketing tactics in Japan through the use of cell phone is very interesting. It is probably the small size of Japan that enables to launch various programs with cell phones. When talking about how Japanese cell phone market emerged, it is important that there is a close link between the cell phone manufacturer and the government. This relates to the cell-phone monthly plan in Japan as well as other features such as each cellphone having its own email address etc… This entire system is causing the dead lock in the “SIM-free” laws that the government is trying to establish but failed in the past (I think they are talking about it again now). For the cell phone itself, something has to be taken place so that the manufacturers are not overwhelmed by creating new phones every season. I think the “unexpected” market penetration by I-phone and other smart phones might change Japanese market (for example, there is a service that enables to bring up QR code for flights in certain areas in the United States).

  2. Ryo says:

    Spot on observations.

    You’re right about a strong government presence: I think as a part of the e-Japan and u-Japan campaigns, cell phones were the means of providing Internet to rural areas.

    It looked good on paper but well… “real” Internet access hasn’t really penetrated to not only the rural areas, but to the older demographic as well.

    Yup, they’re talking about “SIM-free” laws here. If enacted, it will definitely increase competition amongst cell phone service providers.

    Yeah, the introduction of the IPhone was a real wake-up call for the Japanese. In many respects, the IPhone has already become the “next global standard,” which will make it increasingly difficult for Japan to strive to sell its cell phones aggresively abroad.

    Of course, the most realistic and prudent policy for Japanese cell phone makers to take is to cut down on the nifty features, make a cheap phone, and sell it to those in the emerging markets and BOP (Bottom of the Pyramid).

    As you say, it would have to be coupled with good marketing though.

  3. Shogo Okuda says:

    Yes, it would be difficult to grow as a company by just staying within Japanese market: There would be more effort necessary to win the tiny share and it may be not worth it. But as you say, Japanese companies need a good marketing to penetrate the world market because companies like Nokia and Samsung has high share at the world scale… I am kind of interested in how things are going to turn out in the near future.

  4. Patrick says:

    Spot on observations.

    You’re right about a strong government presence: I think as a part of the e-Japan and u-Japan campaigns, cell phones were the means of providing Internet to rural areas.

    It looked good on paper but well… “real” Internet access hasn’t really penetrated to not only the rural areas, but to the older demographic as well.

    Yup, they’re talking about “SIM-free” laws here. If enacted, it will definitely increase competition amongst cell phone service providers.

    Yeah, the introduction of the IPhone was a real wake-up call for the Japanese. In many respects, the IPhone has already become the “next global standard,” which will make it increasingly difficult for Japan to strive to sell its cell phones aggresively abroad.

    Of course, the most realistic and prudent policy for Japanese cell phone makers to take is to cut down on the nifty features, make a cheap phone, and sell it to those in the emerging markets and BOP (Bottom of the Pyramid).

    As you say, it would have to be coupled with good marketing though.

  5. Robin says:

    Yes, it would be difficult to grow as a company by just staying within Japanese market: There would be more effort necessary to win the tiny share and it may be not worth it. But as you say, Japanese companies need a good marketing to penetrate the world market because companies like Nokia and Samsung has high share at the world scale… I am kind of interested in how things are going to turn out in the near future.

  6. Steven says:

    Yes, it would be difficult to grow as a company by just staying within Japanese market: There would be more effort necessary to win the tiny share and it may be not worth it. But as you say, Japanese companies need a good marketing to penetrate the world market because companies like Nokia and Samsung has high share at the world scale… I am kind of interested in how things are going to turn out in the near future.

  7. Karen says:

    This is an interesting topic because Japanese cell phone market is unique compared to that of rest of the world. I personally think the marketing tactics in Japan through the use of cell phone is very interesting. It is probably the small size of Japan that enables to launch various programs with cell phones. When talking about how Japanese cell phone market emerged, it is important that there is a close link between the cell phone manufacturer and the government. This relates to the cell-phone monthly plan in Japan as well as other features such as each cellphone having its own email address etc… This entire system is causing the dead lock in the “SIM-free” laws that the government is trying to establish but failed in the past (I think they are talking about it again now). For the cell phone itself, something has to be taken place so that the manufacturers are not overwhelmed by creating new phones every season. I think the “unexpected” market penetration by I-phone and other smart phones might change Japanese market (for example, there is a service that enables to bring up QR code for flights in certain areas in the United States).

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