Japanese VS. iPhone

Japanese analysts are doubtful whether the iPhone will catch on in markets like Japan, where consumers favor smaller and sleeker multifunctional handsets. They also question whether Japanese carriers will accept ceding to Apple's tight control over handset design and agree to its demand for a certain share of subscription fees.

“Most Japanese consumers are more likely to remain content with what they already have” - said Nahoko Mitsuyama, a telecom analyst at Gartner Japan who attended the Mobile World Congress in Barcelona, Spain, in February.

However, Japanese analysts are doubtful. Current iPhones won't work in Japan, where the faster third-generation network has become the mainstream. Industry watchers believe 3G iPhones will be released in the latter half of this year.

Apple hopes to reach an agreement with a Japanese mobile phone operator to achieve its goal of selling 10 million iPhones worldwide by the end of 2008. It sold some 3.7 million iPhones throughout the world in 2007.

"Most of the world's Internet users via mobile phone are Japanese, so success in mobile services here can be applied to other markets."- said Noritaka Kobayashi, an information and communications consultant at Nomura Research Institute in Tokyo.

Japanese consumers are amazed by the iPod, which controls 54.5 percent of Japan's digital portable music player market - well above Sony's Walkman with 26.2 percent, according to market research firm BCN. The iPhone could benefit from an emotional attachment to Apple among Japanese.

"Japanese like anything new and trendy, so the thing is how many customers Apple can attract beyond Apple fans," - Gartner's Mitsuyama said, noting that Japanese on average change their handsets every two years.

Still, Japan is expected to be a difficult market. Here, mobile phone carriers control the release of new handsets and dictate specific features and functions of new cell phones to satisfy consumers who are picky about product usability, design and quality. Foreign makers account for only about 10 percent of the roughly 50 million handsets sold annually in Japan, although their market share is on the rise, according to Yano Research Institute.