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A Chat with Nobi


03/15/2007

For insight on current Macintosh and other high-tech goings-on in Japan, who better to talk to than a journalist covering the scene there? At this year's MacWorld Expo in San Francisco, I sat down with Nobuyuki Hayashi, known to friends and colleagues as "Nobi," to do just that. Nobi has been a Macintosh-related computer journalist since 1990, has interviewed people like one-time Apple CEO John Scully, and was the journalist who broke the story about Apple's ill-fated Star Trek project in Japan. He's written for several Japanese Macintosh periodicals like MacPower, MacPeople, and most recently for MacFan magazine. Nobi's also written more than 200 articles for Microsoft's Mactopia in Japan on a broad range of Mac topics.

Nobi
We spoke with Nobuyuki "Nobi" Hayashi at this year's Macworld

Our conversation started with the requisite evaluation of the show (thoughts on the keynote, iPhone, and expo floor) but went on to include lots more beyond Moscone Center or even the Macintosh. We talked about cool new devices soon to come out of Japan, the darker side of online culture there, developers interested in entering that market, and more.

CS: The big news here at MacWorld is the iPhone. I'm sure that's big news for your readers as well?

NH: Yes, that's big news for me, and big news for anyone who could listen to the keynote in English for two hours (there were no subtitles). After the keynote, there were a huge number of blog postings in Japan. But there's now a lot of disappointment, as it's become clear that the iPhone only supports four-band GSM, and not 3G. In Japan there is no GSM, so the phone with its current specifications will not work there.

But I heard some good news from Greg Joswiak [Apple Vice-President of Worldwide iPod Product Marketing], who affirmed that Japan is a very important market, and that in the future they might look at the specs again. Also, Son-san [Masayoshi Son, head of the telecommunications company Softbank Mobile] was in the front row of the keynote, so there might be something already in the works for Japan.

CS: Aside from the GSM issue, though, do you think in Japan's huge cell-phone culture, the iPhone's interface and feel will be a good match?

NH: Japan has come to a very interesting point of change. Japanese phones have become so advanced, in many ways far ahead of U.S. phones. And they are so different from other phones from around the world. But in fact, last year Newsweek Japan did a cover story titled "Japan is not ahead, but behind in cell phone design," which was a really bold statement to make. When I read the article, I found some of it to be true, because while Japanese technology is very advanced, it's not so advanced as far as usability and convenience go. Perhaps some proof of this is that since the Motorola Razr entered the Japanese market last December, it has been doing very well. So maybe there is a thirst for internationally standard phones in Japan. Also, for a long time Palm didn't come to Japan, because there was no market at all for smartphones. But it looks like the mentality is now gradually changing in Japan, and I think maybe Apple is getting in at just the right time, if you look at things that way.

CS: Speaking of Apple in the Japanese market, I've been trying to find the current Mac market share numbers for Japan but have had a hard time.

NH: Apple doesn't release those numbers, but it's probably something around six percent now. It's not been dropping, I don't think, just staying flat for a while. I've heard rumors that Apple's applying a lot of pressure on Apple Japan to improve the market share.

CS: But you do see a lot of Macs in offices and homes?

NH: It's a lot like America, or Paris, for example, where in the more creative industries you'll see the market share reversed, with more Macintoshes than Windows. But there have been two recent big success stories for Apple in Japan. One is Aozora Bank. Banks have not been a big market for Apple, but when Aozora become mostly American-owned in 2003, the new owners initiated a large research project to find the best technologies for them to use. For example, what's the best computer platform, the best routers, VoIP systems, and even the best chairs?

The research took about a year, and when they were done, their conclusion was that Macintosh would be the best platform, but with one condition: If Apple could keep the swap files encrypted, the bank could use the Macintosh. So the reason that Macs can do that now is because Aozora requested that Apple add that feature. Aozora used to use only Windows 2000 machines but is now replacing them all with Mac OS X.

CS: So has that switch had any ramifications for other businesses? Have there been many other switches?

NH: It was a big deal, and some newspapers reported on it. But there haven't been many other followers of Aozora's decision yet. However Tokyo University, [Japan's premier University, also known as "Todai"] also become a very good example of how to migrate to the Macintosh. Todai was looking for a computer that could boot from the network, though the Macintosh wasn't their initial choice. Actually, they were able to get Windows to boot from the network, but every time Microsoft updated Windows, the Todai developers would have to rework their software. They then took another look at the Mac, and found Mac OS X and eventually adopted it as their platform of choice.

The reason they needed to net boot relates to the way public universities now operate in Japan, which has changed just recently. Mostly because a new lack of funding, the entire computer infrastructure at Todai now has to be managed by just two or three people. They have some others helping here and there, but use only two or three core people to support two campuses, which are very far away from each other. That's why they needed a centralized solution. I heard that in this case also there are some features in Mac OS X that were implemented because of Todai's requirements.

Though Aozura Bank's case didn't result in many followers, the Todai case was so successful that many other universities who were facing similar budget cuts have followed Todai's model, and many universities in Japan are now switching to the Mac for general student use.

CS: So in the non-institutional realms, like among the youth, for example, is the Mac very popular...is it "cool"?

NH: Yeah, I think it's kind of like it is in America. Apple has just started its localized version of the "Get a Mac" campaign, with the "I'm a Mac, I'm a PC" TV commercials. A lot of Mac fans like the advertisements, but I don't know how well the general public likes them. Some Mac journalists, myself included, think that there's too much direct translation, that some of the stuff doesn't work in the Japanese culture, the Japanese context. They actually just recently did one with "nengajo" [the tradition of writing and sending New Year's cards], which is very Japanese, but still even with that they weren't able to make it fit into Japanese culture.

CS: Also, I know it's rare to directly criticize or even name a competitor in Japanese advertising...

NH: Right, though some people received Apple's ads well, there have been a lot of people who hate the commercials because of that. Some people are aware that not just Windows has problems, Macs have problems as well.

CS: You mentioned several Mac magazines in Japan. I remember in the 90s there were a lot, but are there still that many?

NH: Well, there used to be more Mac magazines in Japan than in the U.S., more than a dozen back around 1993 to 1995. But since those days, the Macintosh market has changed. At its peak it was 20 percent in Japan; it's been a very big market for Apple, especially after the Performa came out. But that collapsed with the release of Windows 95, and Macintosh publications lost readership. Now there are only the three monthly publications: MacPower, MacPeople, and MacFan. Also, the publisher of MacFan has started a quarterly, which has become popular too.

CS: But I guess the iPod has changed things for Apple in Japan?

NH: The iPod is doing very well in Japan. But, especially since the later half of last year, Sony has been catching up very quickly. Sony has been doing really good work in Japan, and also because the Japanese music industry is trying to push out Apple. Most of the older Japanese companies are very closed, and they don't like to have a foreign company come in and become too successful. So, like in France, the Japanese music industry didn't provide a lot of music to the iTunes Music store. Therefore, the iPod is seen very differently in Japan than it is in America. In America, you can get movies, TV shows, and a lot of music from the iTunes store. But in Japan, you only can get a very small subset of the music industry. You can rip still from CDs, of course, but the online component is very different.

CS: So, I guess the deal Apple did with the music industry in Japan wasn't nearly as large as the deal made here, especially since they didn't get Sony, of course.

NH: Right, and they're huge. I've been talking to many people in the Japanese music industry, and they say iTunes K.K. [the wholly owned subsidiary of Apple, which runs the iTunes Store in Japan] doesn't understand the Japanese music industry or the way they do business. Apple seriously needs someone who understands Japan. I mean, I'm a big fan of global strategy. I know that some people say that the Japanese market needs a special strategy, but still I believe in some global standards for business. Still, especially for music and those types of industries, you do need to understand the market you're entering. Once you're in, you can open the floodgates and do what you want, but to start you need to adapt to the culture.

CS: What would be one or two pointers you would give Apple about doing business in Japan?

NH: First, iTunes K.K. should get someone who's really savvy about the Japanese music industry...

CS: So, is it more about how the business works, or more about the culture?

NH: Well, for example, the way in Japan you do business after hours at the izakaya [drinking places], that's part of it. But there are other big problems. For example, the Japanese music industry wants to charge more per song. Sony has their own music shop, and I saw that one song was about $4, so perhaps they want to go as high that. In this case Apple has the better model, but still they need to find a way to compromise.

CS: Back to MacWorld, are there other big stories here?

NH: Well, this expo is not as interesting for Japanese people as it is for Americans. While Apple TV is nice, in Japan, since the iTunes Store only sells some music, there are no TV shows. So maybe it's good for showing pictures, for sharing them, and listing to some music, but there are no TV shows, no movies, no nothing, so...the only announcement from this show of much interest is the Airport Extreme Base Station. Again, the way people see iPod and iTunes in Japan and their use is very different. They each have a totally different base.

CS: Is TiVo available in Japan?

NH: Well, not yet, and it's not exactly TiVo, but Sony is now working on something similar to TiVo, and this year will be big for TV in Japan.

I haven't even written about this myself, but I've seen some devices in development now that can record every single show on every single channel for a week, for example. These are multichannel recorders with 2-3 TBs of storage. I think a device like this will really change the viewing habits of a lot of people, who'll find that even though a lot of Japanese TV is crap, there are actually a few programs worth watching.

The great thing is that all the shows are tagged. So, if I wanted to watch something on, say, Macintosh or Paris, I could search on that and they would show up grouped together in the same folder. And we can give ratings, and that information is then shared with a community like with YouTube. Actually, there are now two or three companies making these kinds of devices.

CS: So have any of these devices been released yet?

NH: No, so I can't really say much more about them.

CS: And that brings me to the topic of broadband in Japan. I know it's very advanced there...

NH: Yes, it is very advanced. So much so that whenever I leave the country I feel so frustrated. At my home, for example, I have a symmetric 100Mbps fiber-optic connection--I actually get about 40-60Mbps from it. And that costs me about $40/month. With it I can, for example, play back from my office a DVD that's mounted on my home server.

CS: Wow, how typical is that there?

NH: It's becoming typical. Some people have ADSL, but even that is usually over 10Mbps. And theoretically, that go can up to 26Mbps.

CS: You're in Tokyo, then. How much of the rest of the country has access to that?

NH: I think more than 80-90 percent of Japanese households now can get fiber.

CS: I could see how that could affect the lifestyle there, changing the culture even. Are a lot of people using that?

NH: Well, the digital divide is a lot bigger in Japan than here. The people who use computers will have broadband, but a large percentage of people just use their cells phones, since they are also advanced. They can do all their mailing with them. And those people don't know Google, or Yahoo--though most phones now can access sites like that.

But that's improving as well. Recently "au by KDDI," one of the fastest-growing carriers here, has teamed with Google, so now Google search is at the top of the menu of all the "au"-phones. And because Softbank, the parent company of Yahoo! Japan, has purchased Vodafone Japan to create Softbank Mobile, now all the ex-Vodafone and -Softbank Mobile phones show "Yahoo! search" as top menu.

NTT DoCoMo, the largest among the three carriers, are staying neutral and hosting their own search service while also providing Google and Yahoo! Search as options.

CS: I know there's a growing blogosphere in Japan...

NH: Yes, it's big. Someone did a study on which languages are most popular on the blogosphere, and Japanese was one of the very top. So there are many, many, many blogs in Japan. The first commercial service started in 2003 and usage went straight up from there. But I see some difference in the culture of Japanese bloggers and American. In American blogs, there are many serious discussions, journalists who blog, and it's very opinionated. But in Japan, most blogs will just point out something interesting, or say "I ate sushi today." And that difference is probably just due to the cultural differences.

CS: Do you think the increase in blogging could in time change the culture?

NH: Well, there's already a negative example of that, a very big underground BBS called "ni channeru" ["2Channel"]. This site has already had much influence on Japanese culture.

Japanese people, in my perception, are such a big crowd of "village people." They don't take responsibility for what they say, and if they remain anonymous they become bold and say whatever they feel. On 2Channel, they don't disclose their identity and they'll say things about their companies, for example. In fact, two or three years ago 2Channel had a lot of effect on the Tokyo Stock Exchange because so many people disclosed a lot of important secrets about some companies. There were really a lot of fiascos caused by 2Channel. These days there's even a new business of people paid by companies just to watch 2Channel and report back any damaging comments about those companies. Since 2Channel is under so many lawsuits now, if you ask them to remove a posting, they will do it. That's what these new businesses do.

People also use it to attack their business opponents, and also there have been several illegal activities spawned on 2Channel. There have been group suicides planned, and things like that.

CS: And so because of things like this it's gotten kind of a dark cloud around it, kind of like MySpace has here?

NH: Yes, it's like the darkest side of MySpace. In any case, I really hate the 2Channel thing, and I'm always expecting that the blog culture would change it. But it still hasn't happened, and there are lot of people still into 2Channel.

Another site, OhMyNews, is a Korean citizen news website that started a Japanese site last year. At that time, the editor in chief of OhMyNews Japan said in an article that they want to be more journalistic in their reporting and want to get away from the 2Channel culture. When the 2Channel users saw the article, they started attacking OhMyNews, and they had a really rough start in Japan because of that.

I don't know exactly how many people are using 2Channel, but something like 10 million. And anything that's against Japanese culture, they like to attack. Usually, Japanese people, when they're alone, won't say anything critical. But when they get together...there's a Japanese saying, Akashingou minna de watareba kowaku nai which means, "it's not frightening to cross on a red light if everyone goes together." And that's the same mentality here. If someone starts attacking one blog, and another person notices and finds it funny, thousands more people will soon follow.

CS: Yes, I see. There's a lot of that here, too, I would say. I see that on Digg, for example. Once the ball starts rolling, people will jump on. But maybe until 2Channel, Japan didn't have a vehicle to express things that way, for better or worse.

Speaking of culture, have you seen MAKE magazine before? It's become kind of a reflection of some of the culture here, a "Makers" culture. Is there anything like that in Japan, a "do it yourself" kind of geeky culture?

NH: Well, in Japan, a publisher called Gakken has a long tradition of things like this. Do you know Gakken's Gakushu and Kagaku? They are books for kids, but each comes out with interesting projects that you can make using just the parts included with the book. Now they have come out with Otona no kagaku, which is a version for adults. And I've always said to them that they should come look at the U.S. market, since there are big opportunities there. But they have been satisfied with just the great success they have had in Japan. Unfortunately, a lot of Japanese companies don't look outside of Japan, and are usually just satisfied with being successful in the Japanese market.

CS: Are they aware of the Japan boom, here? Japanese culture, manga, and things are very popular here.

NH: Well, yes, and I always talk about it in Japan. They'll say, "Yes, that sounds good, we'd like to do that but we don't have the connections, it would be too much work," those kinds of things. It's such a shame...

So, let me show you the latest Otona no kagaku. Their projects are so well thought-out and interesting. The best-selling one was a home planetarium kit. The latest issue has a pinhole camera. And the next one will be a film projector. The previous issues had the Da Vinci Helicopter and a kaleidoscope.

CS: So, I think here, the MAKE culture is seen as a bit outside of the mainstream culture. Is that what Gakken is, or is it more part of the mainstream?

NH: No, Gakken is such a strong brand in Japan. Many people in my generation and earlier grew up with it. And that's why they're targeting us.

CS: Finally, I wonder if there's anything you have to say for Mac developers who are interested in entering the Japanese market?

NH: Well, I have talked to a lot of developers here at MacWorld, and they do ask about entering the Japanese market. Back in the 90s there were more than a dozen distributors in Japan, so most developers went through them since they had no knowledge of the Japanese market. But now there are only two or three distributors in Japan, so it's more difficult for developers here these days.

There are a lot of developers who had a presence in Japan, but now that most of the distributors are gone, they've lost contact with the Japanese market. A lot of them who want to return to the Japanese market ask me if I know a good distributor, and I can give them a couple of names. If they are lucky, they can talk with Apple's WWDR [World Wide Developer Relations] people, and they can help, but they have limited resources and can't help everybody.

The best way, though, is to have an online presence. Then you can find a Japanese fan of the product and have a web page translated and do your business that way, independently. There is a group of people who translate English software into Japanese voluntarily, so as a developer maybe you can get free localization and free documentation.

Also sometimes when you go through a distributor, they charge too much and it can actually kill the product. For example, some products that go for $20 here can go for $40 or $50 in Japan, and that doesn't make sense. So try to be as independent as possible, try to have as much control over your product as you can for the Japanese market. That would be my advice.

One thing, though, that I really do miss is when Apple, in the mid 90s, gave marketing sessions at WWDC [Apple's World Wide Developers Conference]. They would talk about how to go into different markets, like the Japanese market, for example. But they no longer do that. I would really like to see more Japanese developers coming to the American market, and more American developers coming to the Japanese market. But it's difficult to promote that. Nobody knows how big the Japanese market is, how many magazines there are to advertise in, but that information would be really important to developers coming into Japan. Maybe this article could be helpful for some of those developers even.

I do have a very good feeling, though, about the cultural issues. Among the younger generation of Japanese, a lot are very Americanized in their way of thinking, and in America a lot of people now have grown up watching Japanese animation and things. So, I think the younger generation is a big common base. It's amazing, your kids and my kids can be talking about Pokemon together.

CS: Indeed, and that's a hopeful note to wrap up with. It was great talking with you, Nobi--thank you very much!


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