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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.

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