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October 22, 2008

Do you know your international customers?

Last week I spend in Tokyo visiting Microsoft's subsidiary. It was my first trip to Japan and thus my first opportunity to learn about their local culture. I worked a lot with people from different countries but mostly over the phone. Although you can learn something about the person on the other side of the line meeting them face to face is worth hundred phone calls.

I personally think every country has its own culture and companies should respect that. For me being global doesn't mean "create one product and deploy it globally" as most of the companies do. That your product sells well in your own country and may be couple of more doesn't mean it will sell well everywhere. As confirmation of this statement of mine I learned why iPhone sales in Japan are not doing so well (don't think that Windows Mobile or Blackberry are ruling the market - no, that is totally not the case). Here some statistics first:

 

  • Japan population is ~127M
  • Average number of phones per subscriber in Japan is 1.2
  • Number of mobile phones subscribers passed 100M mark at the beginning of 2007

 

All this can tell you that mobile phone market there is HUGE.

 

Apple released iPhone worldwide (including Japan) on July 11th 2008. For the first 2 months the estimated sales for Japanese market are 200,000 units (source mocoNews.net). This is just a small fraction of the 10M iPhone 3G sales (source Yahoo!News) and even smaller if you take into account the Japanese market of 100M (forgot to mention that this is also the biggest 3G market).

 

As usually the reason people in Japan are not buying iPhones are the features. If Apple tried to learn a bit about the local culture they would have understand that Japanese use their phones for almost everything - they call, send text messages, send reminders to themselves, take pictures, and… play. However browsing Internet and GPS are not among their highest preferences. Few of the important features iPhone misses and as it seems are crucial for the local market are decorated email (read "dancing Panda" and "meowing Hello Kitty") - this is hit among youth people in Japan; keyboard (for texting) and ability to recognize captured barcodes - it is not easy to text if you have the on-screen keyboard and even harder to play. Additional to that iPhone is not localized in Japanese and this is one more obstacle for their customers (it may be hard to understand but very few people in Japan speak English).

 

I have to admit that Steve Jobs made great deal requiring SoftBank to make minimum order (500K units). The question now is whether SoftBank will make second one.

 

From other side Windows Mobile and Blackberry are also among the losers in Japan. They both target information workers and although they include keyboards and localization (at least some of the models) they miss the rest that can make them "cool" in this market.

 

Once again I would like to emphasize - learn about your local customer before you enter the market, this can make or break your sales. Apple is a great example how such successful companies can fail locally.

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