itmWEB TechWeekly

December 22, 1997

The Technology View from Japan 

Some technology observations from a recent business trip to Japan. The technology just keeps shrinking.

Recently, I made one of my regular trips to Japan for IS strategy meetings at our corporate headquarters in Tokyo. During this trip, I visited some of the major technology centers of the city. Since so much hardware related technology is produced in Japan, I have always found these visits enlightening. Let me share a few of my observations from this latest trip with you.

Wandering Around Akihabara

After checking into the hotel in Shinjuku and after getting a full night of sleep, our group took the train to the technology shopping area in Tokyo known as Akihabara. This is one amazing place. A serious techno-junkie's heaven. Promptly upon exiting the train station, several of our US based staff members who were experiencing Japan for the first time went wide-eyed. They suggested that we establish a meeting place to regroup several hours later. Akihabara can be overwhelming, and they quickly realized that it is best experienced at your own pace.

Akihabara is also hard to describe in words. Just picture many city blocks of about ten story buildings, each containing a massive electronic products store. Every floor of every store is packed with the latest in computers, software, cameras, phones, stereos, video equipment, and thousands of related electronic items. Illuminate the whole thing with gigantic neon signs, massive outdoor video screens, and rows of blinking light blubs, and you have created Akihabara. It is kind of a cross between a "Best Buy" and the city of Las Vegas.

During my first visit in 1994, I found the prices to be a little on the expensive side (because of the exchange rate), but this trip I found the prices to be very reasonable. Since I have visited Akihabara during previous trips, there are several stores I now consider to be my favorites. This trip I went straight to these stores and spent my time asking questions (mostly in English) about some of the most popular technology offerings.

I found this visit's hot items to be sub-notebook computers, mini-disk players, mini-cell phones, and digital cameras. Clearly the Japanese still like their electronics to come in small packages!

The most popular sub-notebooks appeared to be the Libretto from Toshiba, and a Japanese market specific product from Fujitsu. IBM also had a smaller notebook for sale which I had not yet seen yet the US. All were rich with features and functionality.

A big surprise to me was that the cassette tape player is quickly disappearing in Japan. Mini-disk players are everywhere! These use a cartridge which contains a very small CD disk which can hold about seventy five minutes of music or voice recordings. The quality and media life span is incomparable to the old cassette tape media. I predict that this same trend will sweep the US market very soon.

Another hot product is the mini-cell phone. These low power devices are about half the size of a US cell phone, and they only work if you are fairly close to the cellular tower. So the Japanese have installed numerous towers up and down the major train lines, and very quickly a huge market has emerged for this new communications product. I saw hundreds of models to choose from in every store.

Microsoft was Everywhere!

My jaw dropper of the trip was seeing Microsoft booths in several train stations. These booths were the same type that you see at computer trade shows. Each was equipped with large video monitors, and a marketing specialist was giving demonstrations of several Microsoft products including the Windows 98 Beta. I would have never guessed that I would get my first in-depth overview of Windows 98 while standing in a Japanese train station!

Based on my periodic shopping trips over the last four years, Microsoft and IBM appear to be the two major US companies with really significant market penetration in Japan. Even in Akihabara, I only saw very a few offerings from Compaq, and none were notebooks (very surprising to me).

A very popular new computer application in Japan is the software used to manipulate video images from digital cameras. The Japanese love photography, and digital cameras are a huge hit! I saw many digital cameras in use everywhere. Even at our corporate meetings a photographer slipped in with with a digital camera to take a quick photo for later posting on a company intranet news page.

A Surprise Encounter with Dell Direct

People have told me that they have seen Dell products for sale in certain stores in Japan and I believe them. But I personally have never found a Dell product anywhere. Of course, it only took me four years to find the only vending machine in Tokyo which actually sells cans of Dr. Pepper (not a very popular drink in Japan).

So you can imagine my surprise one morning when I went down to the lobby of the Tokyo Hilton to find Dell Direct signs everywhere! Dell had obtained a large number of large meeting rooms at the Hilton for what appeared to be a convention of some sort. Living in Austin, and knowing many of the Dell marketing executives, I wandered through the large meeting rooms hoping to spot a familiar face. Not only did I not see anyone from Austin, I didn't see anyone that I could say with confidence was even from the United States.

Every meeting was being conducted in Japanese by a Japanese national, and all of the product literature was printed in a format I consider to be appropriate for Japanese marketing. I even listened in on a traditional Japanese awards ceremony where it appeared that marketing representatives were receiving sales awards! I asked one of the representatives out front if Dell was planning on using their direct marketing approach in Japan. "Indeed they were," replied the representative.

I was impressed. Not by the fact that Dell was present in Japan. Mainly I was impressed by the fact that the whole affair seemed to me to be very Japanese. This is a marketing lesson that many US companies have not really understood very well. Based on my experience at the Tokyo Hilton, I am predicting success for Dell in Japan.