Nokia-chan: disconnecting Japan (again)

Konnichiha! It's Friday's IT Blogwatch, Richi Jennings watches bloggers watch Nokia pull out of the Japanese cell phone market. Not to mention the vegetable of mass destruction...

Ohio gozaimsu, Martyn Williams-san:

The world's largest cell phone maker is pulling out of one of the world's biggest cellular markets. Nokia said on Thursday that it will stop developing handsets for NTT DoCoMo and Softbank Mobile, effectively ending a push that began five years ago when Nokia re-entered the Japanese market with the launch of 3G services here.
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The plan also won't affect its high-end Vertu brand handsets ... Nokia's decision probably says more about the Japanese market than it does about Nokia. Handsets from NEC, Fujitsu, Sharp, Panasonic and other domestic makers, which are typically developed in close cooperation with carriers and highly tuned to local tastes, are most popular here and no foreign phone maker enjoys the same level of popularity.
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Coupled with a highly developed yet proprietary mobile Internet system, the Japanese market is sometimes referred to as the "Galapagos Islands" of the cellular industry.

Nick Farrell says Nokia found it haado waaku:

The current global economic climate, means that chucking money around investing in Japan-specific localised products is no longer a good idea.

While Nokia has 40 per cent of the worldwide market, Japan is tougher because its consumers want different things from the rest of the world. A nation which wants vending machines to dispense girls knickers installed in its hotels is always going to be a little tricky for company from Finland to understand.

Japan rejected Apple's Iphone 3G for not having enough gimmicks so you know a more serious technology company like Nokia is going to have trouble. The market is saturated and the Japanese want third-generation networks that have TV broadcasting and electronic payment functions.

Ben Beaumont-Thomas has a mazui kangae:

So why can’t Nokia, which has a 37% global market share in handsets, break into Japan? Well, that’s because while we coo over touchscreens and headphone jacks, Japan’s handset culture resides in some epilepsy-inducing manga futureworld where phones look like Transformers, can predict earthquakes, translate your voice into English, understand and display your emotions, and have telly pretty much as standard, let alone internet.
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It will however carry on providing its conspicuous-consumption handset brand Vertu, which makes sense as you’ve got Japanese still dropping £83,000 on Tiffany-encrusted phones amid the crisis.
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My phone doesn’t even have a camera. If I lived in Japan I’d probably be put in a museum. Or a zoo.

Jack Schofield is touwaku:

Sales of Vertu phones are probably not going to be large. Reuters says: "Vertu, founded in 1998, sells gem-encrusted, hand-built mobile phones with prices ranging from 3,500 euros to over 100,000 euros."

That sounds like a strange business to me. If your €24,000 phone is obsolete after two years, that's €1,000 a month in handset depreciation. (The original Vertu Signature cost €24,000 -- as hand-made in Hampshire and sold in London.) Can you get the diamonds re-used on a different handset, or do Vertu buyers have so much money they just don't care?

Dan Frommer looks back to the U.S.:

We can't help but wonder how Nokia be able to take more market share in the U.S. Last quarter, Nokia held 8% of the U.S. market, fifth place behind Samsung, Motorola (MOT), LG, and BlackBerry maker Research In Motion (RIMM), and just ahead of iPhone maker Apple (AAPL).

The problem: Beyond its N95 smartphone, which has a tiny (but passionate) niche audience among live mobile video broadcasters, the only Nokias we see in the U.S. are low-margin, throwaway phones that people get for free from their carriers.

Meanwhile, Nokia has had little success marketing its high-margin smartphones in the U.S., where Apple, Google (GOOG), and RIM are dominating mindshare.

Ewan MacLeod agrees:

And Nokia is now, officially, outta Japan. It’s hardly been in the States either, to be fair. China’s a nation of Nokia-knock-offs although they’ve got a reasonable presence in India.
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I would, ordinarily be giving the Big Finnish Blue Giant a right royal kicking at the moment. Just think of the rant you could get out of this news. But I’ve modified my viewpoints, particularly after seeing the way they test their handsets.

Brilliant handsets. Your average Nokia at least can make phone calls ... [but] rubbish, rubbish user interfaces. Decrepid ****** rubbish piece-of-***** interfaces. Bring me a Nokia with a decent interface and you can have my Kingdom.

Soshite saigo...

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Richi Jennings is an independent analyst/adviser/consultant, specializing in blogging, email, and spam. A 23 year, cross-functional IT veteran, he is also an analyst at Ferris Research. You can follow him on Twitter, pretend to be Richi's friend on Facebook, or just use boring old email: blogwatch@richi.co.uk.

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