There was a time when Japanese commuters left home in the morning clutching a newspaper and a boxed bento lunch. Today, the list is more elaborate: MP3 player, 3.2-megapixel camera, navigation system, digital TV tuner and Web browser - all squeezed into a palm-sized device that costs about the price of a good sushi meal. Millions of Japanese also use cellphones to read novels, magazines and office files, to make credit card payments, watch hours of recorded television and even check body fat. Over the past decade, consumers in the gizmo-loving nation have enjoyed a string of technological firsts. Japan pioneered the use of handsets to connect to the internet in 1999, download music (2002) and watch digital TV (2006). It was the first country to launch 3G wireless networks (2001), and is still one of the few to allow - since 2004 - mobile phones to be used as credit cards and train and bus passes. Cellphone networks in Japan are so advanced that providers are struggling with problems the rest of the world has hardly considered - such as surging demand for high-bandwidth porn. Local operators are building next-generation networks that will give Japan's 92 million surfers even more bang for their recession-hit buck. 'People always tell me how jealous they are of Japanese cellphone technology when I go abroad,' says Tadayuki Yamada, a Tokyo office worker. 'I think we're pretty spoiled.' However, such innovations have not prevented the market from slowing. Subscriptions are falling and, since peaking three years ago at 50 million, total handset sales by the 10 or so domestic manufacturers shrunk to 36 million last year, according to Tokyo-based IT research company MM. 'Until now we have had our hands full with the Japanese market, but it is clearly saturated,' says Heihachiro Ochiai, a spokesman for Sharp. 'We think this is an opportunity to introduce consumers abroad to our products, which we're confident they will like.' Japan's top handset maker, with about a quarter of local sales, Sharp is leading the charge with a smartphone set for launch in Europe next year. Sales trials in China have been 'very impressive' says Ochiai. Toshiba launched its TG-01 this year, lighter than the all-conquering iPhone and with a whopping 4.1-inch touchscreen, super-fast 1GHz chip and Windows-powered operating system. Panasonic is planning a foreign smartphone campaign, but giving few details, only that the launch date is 'under consideration', says spokesman Kyoko Ishii. Fujitsu, NEC and Casio are also lining up behind the only Japanese maker with any presence outside Japan - Sony Ericsson. Can products that have developed mostly in isolation from outside competition (global leader Nokia has less than 1 per cent market share in Japan) make a real dent abroad? Yes, says Osamu Hirose, a senior analyst at the Tokai Research Centre in Tokyo. 'Japanese cellphones are among the most sophisticated in the world, so I think they have a good chance of making a splash in foreign markets.' But tech watcher Mark Hiratsuka, publisher of Digitalworldtokyo.com, says exporting Japan's 'ugly, cluttered handsets' as they are will bomb in the West. Hiratsuka says Japanese mobiles have access to some wonderful and genuinely useful services, 'but are hampered by generally awful hardware and a market that seems to dictate more features are crammed in than anyone needs.' The result is messy software and clunky phones. 'Hence, something slick like the iPhone kicks them all into touch,' he says. Either way, the large Japanese manufacturers have little choice but to venture overseas. Apart from plummeting sales, the iPhone is chipping away at market share since its debut in Japan last year. Its success is helping its local partner Softbank Mobile outperform much bigger local competitors NTT DoCoMo and KDDI. Softbank is enjoying subscriber growth of 11 per cent per quarter, more than double that of competitors, says London-based researcher Wireless Intelligence. Meanwhile, Japan's Korean rival Samsung is already marching ahead in Europe, where it has reportedly sold two million units of its Jet smartphone. If some people are feeling a tinge of deja vu, that's because we've been here before. In the late 1990s the tech world was agog at the smart toys rolling off Japan's cellphone production line, and Japanese makers were potentially major players abroad. But most were not geared up to compete with foreign rivals and they quickly crashed, says Philip Sugai, director of the Mobile Consumer Lab at the International University of Japan. 'The 3G network created by NTT DoCoMo helped it corner more than half of the Japanese market after 2001, for example, but also ensured its handsets were unusable outside the country. Meanwhile, the Japanese market was big enough and subsidised enough and the makers didn't have to worry,' adds Sugai, who says it's time to try again. 'You have a group of incredibly skilled, talented manufacturers that have done amazing things here, but couldn't replicate that abroad. Now they have 10-plus years of creating handsets for a highly sophisticated market, so I view this as a positive step.' What, then, can foreign consumers expect? A hallmark of Japanese cellphones is they are crammed with features - too crammed, say some commentators who accuse Japanese makers of 'feature creep' (one estimate is that on average less than 10 per cent of the features are actually used). Newer models, for example, have 5.1-megapixel cameras, navigation systems, three-inch televisions, LED torches and games loaded with motion sensors to allow them to be played on the train. Oh, and they can make calls too. Few observers believe that will play well with Western consumers, who are accustomed to clean, simple lines. 'One reason - apart from its fantastic applications - that the iPhone is doing well in Japan is because it is so easy to use,' says Tadayuki Shinozaki, chief researcher at MM. 'Japanese manufacturers will have to look at that carefully.' But those same manufacturers also bring plenty to the table, including large, vivid screens, quick applications and sharp design - when they temper the instinct to chuck in the kitchen sink. And they are constantly inventive: solar power and waterproofing are just two of the most recent innovations to cellphones. A current Sharp model even includes face-recognition technology that stops the phone from powering up for anybody but its owner. NTT DoCoMo's e-payment system Osaifu Keitai (wallet cellphone), which uses Sony's FeliCa technology, has also been praised. The system features RFID chips embedded into handsets, turning them into electronic wallets that communicate with ticket barriers, store checkouts and vending machines. With DoCoMo preparing for an assault on the US market, Hiratsuka says it should be pushing for a worldwide standard for e-cash in phones. 'Do that instead of fussing about having more features than the next guy, and they'll be gods,' he says. In the meantime, only time will tell if it is second time lucky for the Japanese mobile-phone armada, and if it will be worth the wait.
