Why Japan’s mobile tech industry can’t rise to global dominance

TOKYO – In 1979 the Nippon Telegraph and Telephone company launched the world’s first 1G mobile phone service in Tokyo and since then Japan has set the pace in many mobile industry innovations such as the first e-mail capability in 1999, first phone camera’s in 2000, 3G networks in 2001, full music downloads in 2002, electronic mobile payments in 2004 and digital TV in 2005. And this is why many industry watchers scratch their heads and wonder how come Japanese phone makers do not have any global clout.

Many Japanese economists, academics and technologists blame the phenomena on what they call the Galapagos Syndrome.

Japanese handsets, it appears, have much in common with the native flora and fauna that 17th century naturalist Charles Darwin found in the Galapagos Islands, according to Yoichi Washida, associate professor at the Graduate School of Commerce and Management at Hitotsubashi University. Both have evolved in divergent manners from their mainland counterparts, he said. Washida, currently works on consumer creativity and ways to create a new vision for corporate structures adaptable to the market of under developed countries.

“Japanese mobile technology was advanced compared to its counterparts but it developed in isolation,” he said during his presentation at the recently concluded Ericsson Business Innovation 2013 conference here. “The Galapagos Syndrome can be applied to many other Japanese technology companies.”

Many Japanese manufacturers are ahead of the pack in innovation and while automakers such as Honda Motor Co. and Toyota Motor Corp. have been top sellers around the globe for decades, many other Japanese firms are unable to or find it extremely difficult to hold onto their early lead in the international area.

“Even Sony suffers from the Galapagos Syndrome,” Washida said. “Many of their products can’t be exported outside Japan.”

For instance, Sony Corp.’s original Walkman was the front runner in wearable personal music device market decades ago but the company appeared to have dropped the ball when other firms brought out their own MP3 devices and when Apple Inc.’s iPod finally captured the market.

Washida said he and his colleagues carried out a study on the failure of Japanese corporations to replicate their local successes in the international market. They started with the assumption that “failure of marketing segmentation” was the chief reason behind the flop.

Their other assumptions included:

  • Over sight in design importance
  • Overstating of functionality
  • Lack of open innovation

“We found that marketing failure was not the reason,” he said.

While other local industry observers opine that Japanese technology designs were often insular, the study also found that overall business strategy and corporate culture were largely to blame.

For example, 97 per cent of the large Japanese companies in the study were tightly controlled by the head office rather than provided with a considerable amount of autonomy.

“Japanese home companies were always in charge of the global marketing and business strategy,” Washida said. “The result was domestic strategies were being applied to emerging markets.”

The study also found that many Japanese companies failed to learn from their successes.

For example, as many as 21 per cent of the respondents focused on the Chinese market. Many of these firms have been able to developed lucrative operations in that country.

However, many of these organizations also failed to transmit the lessons learned from these positive experiences to their company’s other international operations.

Washida said that in order to gain success abroad, Japanese corporations need to loosen the reins a bit on their international offices and allow them to develop strategies best suited for their respective regions.

“The focus should be in finding a local fit instead of Japanese standardization,” he said.

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Nestor Arellano
Nestor Arellano
Toronto-based journalist specializing in technology and business news. Blogs and tweets on the latest tech trends and gadgets.

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