Japan is no longer a leader in Electronics

Great article in Newsweek explaining why Japan is falling behind in consumer electronics and left wondering, "How come we weren't the ones who invented the ipod?"

I've felt this way about electronics here for a while. The rise of the personal computer- big, ugly, beige boxes first built by IBM, powered by Intel, and operated by Microsoft (all American companies, you'll notice), really took Japan by surprise. When I first came here, I was amazed by how illiterate young people here are with computers. My students often don't know the first thing about PCs, and can barely open Microsoft Word. That's partly a consequence of the cell phone technology, I think- back home, Instant Messaging and email were gateway products to get kids interested in computers, who then branched out into using other software. In Japan, cell phones have had those domains covered for 10 years. So migration to computers has been much slower.

As a result, the workforce is relatively unskilled, and the whole country is playing catch-up. Ever browsed a Japanese Web Page? For all the love of design in this country, they're usually terrible. Ever used Japanese software? Consider yourself lucky. It's often close to unusable.

Success in the world of personal computers requires people that use, understand and write software themselves. Indeed, the whole nature of the PC revolution was based on innovations by users. Chat rooms, the web browser, the first software Mp3 player, Winamp, heck, even the very use of Mp3 as a format for music, came from hackers and computer users, not big corporations deciding what we would get next.

American companies adapted and jumped on board. Apple built a portable hardware mp3 player, the ipod. But Japanese companies seemed either oblivious to all these grassroots innovations, or insecure. It was as if they were saying. "What are we supposed to do with all this stuff? How are we supposed to build a product for it if it's not ours?"

Indeed, Sony even put out a rival mp3 player that didn't play mp3s. They didn't want anything to do with a pirateable data format that came from outsiders. The players used a proprietary format, and were a huge pain to use. Internationally, they failed miserably, and even here in Japan, they're stuck with half of the ipod's market share.

Even just building computer hardware, which you would expect would be simple, has been tough for them. Japan is great at making closed systems, products built in-house from top-to-bottom. The company slaves over a system, and takes care of every detail for the users.

But the internet/PC age has led to an environment where competitors all share the same internal standards in terms of parts, and the real innovation comes in how they're used. I think it broke Japan's heart to sell computers powered by Intel Chips and run with Windows software, both of which they have to buy from Americans. If you buy a Sony Vaio, it's littered with in-house software, in attempt to make it a true "Sony" computer experience. They just don't get it. In America, built in software that comes pre-installed on a PC is called "Bloatware"- and most experienced computer users just delete it immediately.

Another problem is price. Sony has been called a lot of things over the years, but cheap hasn't been one of them. High prices are fine if you have the best product on the market. But right now, Sony just can't deliver. The high prices just look arrogant and unjustified.

For example, I'm writing this on a Hewlett Packard laptop. I'm not exactly a fan-boy of HP, but when I was strapped for cash a few years back and trying to pick out an affordable computer, there was just no competition. With HP, one of the few American computers widely available at the big electronics store here, I could get laptop with a 1.5 Ghz processor and stack it with about 750 MB of RAM, all for about $700.

A pretty common deal in America, I know, so you may not be impressed. But consider the Japanese competition- the rival big-name brands in here (Sony, Toshiba, etc) all offered the same basic laptop, only with a "trendier" (i.e uglier) casing, and a plasma screen instead of the standard LCD one, for prices that ranged from $1,600 - $2,000. In other words, about double or triple the price.

They didn't even offer lower-end, budget models without the plasma upgrades. At all. Electronics companies here are obsessed with keeping their profit margins high, and keeping everything as expensive as possible. They even lobbied to pass a law that would make it illegal for second hand shops to sell electronics more than 5 years old, so that people would be forced to keep buying new stuff. They came very close to passing it, too. The general public was passive about it. The only thing that stopped them was musicians that wouldn't have been able to buy vintage amps and guitar pedals, and gaming freaks that wouldn't have been able to buy old Nintendo games.

So sadly, for all the cool Japanese design and technological wizardry I write about on this blog, when it comes to consumer electronics and the types of products that I actually buy and use in my everyday life, I find myself buying American time and time again.

There is one area of electronics where Japan reigns supreme- Cell Phones. My 3G Casio cell phone is years ahead of anything I've seen abroad. But the tragedy is that Japanese companies are getting their butts kicked worldwide by companies like Nokia, who in my opinion make inferior phones, but understand the markets better.