
As Apple and Samsung dominate, Japan’s tech giants are in a free fall - ylem
http://www.washingtonpost.com/world/as-apple-and-samsung-dominate-japans-tech-giants-are-in-a-free-fall/2012/09/28/04c6eb36-0944-11e2-afff-d6c7f20a83bf_story.html?hpid=z2
======
po
As someone who worked at Sony in the US and later founded a successful startup
in japan, I feel I can speak with a bit of authority here… The main thing to
realize is that this article is talking about Japanese 'tech giants' missing
the boat, not HN-style software startups.

For many years Japan dominated and succeeded with well-built consumer
hardware. The best and brightest minds became hardware engineers at Sony,
Toshiba, Fujitsu, etc… When the industry shifted to software _and_ hardware
blended together in a seamless fashion - an ecosystem bigger than the device
itself - those minds were particularly ill-prepared for the fast paced, just-
ship-it style development cycles that software demands. The product looked
good on paper but the lifespan of the consumer relationship was inferior
because it didn't include the user's newly found software lifecycle.

We all know how Microsoft missed the boat when the internet came along and
disrupted their office/windows strategy. Now, imagine a whole country filled
with Microsofts. Japan has floundered in denial for a while.

The good news for Japan is that the in the last few years I have seen a huge
growth of people diving into it. There are a ton of coworking spaces and
incubators popping up, and people seem to be focusing on software now. I
actually think the big earthquake was a bit of an awakening for people here.
More people want to work at a company doing something cool. The younger
generation seems to understand that hardware is no longer king, even if they
don't have the mentorship and guidance they would have in the US. It may take
a bit of time but I think it is already under way. They have amazing work
ethic and drive and I am hopeful that Japan turns the ship back towards
innovation.

~~~
anuraj
It all boils down to a population problem. Japan is ageing and software
demands huge work force. Only India and may be China in the near future can
bridge the gap. It is not accident that Silicon Valley has more Indian
engineers than any other foreign nationality.

~~~
neilxdsouza
I am an Indian (from Goa). Your idea that the millions of Software Engineers
from India are going bridge the gap is misguided, IMO.

What Software innovation has India done? Do you know of any compiler companies
from here? Or any Operating System companies? How many linux kernel engineers
does Infosys or TCS have? Both companies are sitting with billions in cash. Do
you think any senior directors there are thinking - let's create a microchip,
even if it's way behind Intel or AMD? I remember reading an interview of
Bjarne Stroustrup - he said AT&T gave away their compilers to their
competitors (like HP) knowing fully well it would strengthen them. Is any
company in India on the same level as AT&T, who can see the bigger picture ?
Maybe Tata's come close (not TCS). Indian senior management are like glorified
buniyas - who when they put down 50 paise, expect Rs 1.5 back. It took
Standard Chartered to come to India and sponsor a marathon. That should tell
you a lot about senior management here.

On a larger scale is any Indian company thinking we can build a commercial
aircraft? Only HAL builds fighters - but that's a govt company. Soon Microsoft
is going to create an opportunity for everyone to erode their Desktop OS share
by walling off developers? Do you think TCS or Infosys is building a Linux
Distro like Canonical/Ubuntu? Do you think they have the balls to get into
that market and try and take market share?

The fundamental thinking of India seems to be flawed. Everyone wants a piece
of the outsourcing pie. Synergies and bullcrap like that. No products come
from here. I believe we are already suffering a much worse fate than Japan.
Videocon is a collaboration with a Japanese company (since the talk was about
electronic majors from Japan). Where are the real indigenous products from
India, so that we can have the same fate as Japan? The only advantage the 1
million "good" engineers you claim is cost. Once the cost advantage goes,
people are going to be jobless, not bridging any gaps.

I went to 2 leading BPOs with my compilers for Survey Programming and Cross
Tabulation. The VPs said the thought of writing such products never crossed
their minds. They were not interested.

If you want to see the difference in Indian thinking - compare with Germany.
Open source is available to everyone and that means countries too. I have read
many articles about Germany using Open source in govt offices and there was an
article about France and Libre Office.

India cannot go down the same road as Japan, because we dont have the products
in the first place to go down that road.

I don't know if your "bridging the gap", means supplying engineers to other
countries. If yes, then this is the typical thinking that creates the net
negative cash flow in economies like ours.

~~~
zem
fellow goan here, and i have to say that while you are mostly correct, things
are beginning to shift. there are a sprinkling of homegrown "product"
companies popping up in bangalore and pune, and a small but increasing
participation in various open source communities. hopefully by the next decade
indian software engineers will be motivated by seeing what they can build,
rather than by where they can make a quick buck solving someone's outsourced
problems.

~~~
neilxdsouza
I will believe this, when I see products which are not your typical social
products coming from here, not your next twitter app clone variants, after
people have done their first walk through using Rails.

What would be challenging products showing some tech know-how (note there is
hardly an innovation in any of this, but demonstrates some level of tech
competence)?

1\. Take the g++ source code or clang, intercept it at the point it creates
the parse tree and create a code navigation(cscope for c++) or lint like tool.

2\. Chapter 6, PAIP has the bare bones of a flight search engine in lisp. You
need to add more parameters and a different metric function. Open source the
solution to disrupt current monopolies.

3\. Google is solving the language translation problem.

4\. Disrupt the big 5 in audits (PwC etc). Create an accounting /audit package
that uses similar ideas as git. Use SHA1 entries to track accounting entries.
PwC, screwed up Satyam's auditing and got away with it (because of bribing?).
In the US, Arthur Anderson was destroyed as an entity for fudging Enron. Since
we are used to bribing the govt to pass laws, TCS or Infosys could throw
weight on the govt to pass a law to accept streams of accounting records using
"git push". Audit data is now a weekly or monthly disclosure, using git push
to a govt location. Much lesser chance for companies to fudge data once you
have a much tighter cycle, tamper proof because of SHA1 checksums.

~~~
hga
_In the US, Arthur Anderson was destroyed as an entity for fudging Enron._

Actually, it was simply killed by the initial indictment, which for an auditor
is a death sentence. Several years later the Supreme Court unanimously
reversed
([http://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_S...](http://en.wikipedia.org/wiki/Arthur_Andersen_LLP_v._United_States)),
but by then it was way too late. I.e. this was a typical abusive political
Federal prosecution; Enron in general gave the usual suspects an excuse to
wreck horrific damage, including most especially SarBox which was the final
nail in the coffin of the VC funded hi-tech startup business model.

As for Satyam, at least in US auditors proceed from the assumption that the
company it not lying to them and they do some spot checks to verify (e.g. "You
say you have 150 widgets of this type in that warehouse; let's go look at
them." And "You say you have 29 crores in this account at that bank; call the
bank and authorize them to tell us about the account."). If the company is
sufficiently fraudulent, as I recall reading Satyam was, auditor malfeasance
is _not_ assumed, you check to see if the auditor's verification procedures
were reasonable and if they ignored anything they shouldn't have, but
otherwise you can't assume they too were corrupt.

Auditing is expensive from both sides, the auditor and the company being
audited, where a number of people are tasked with supplying the auditor the
information they need and demand (e.g. those verification checks). If a
company is running a sufficiently sophisticated scam, e.g. their official
books are very carefully constructed fiction, I don't see how their pushing
out regular records would help. I.e. the way they pull off their scam is to
continuously make everything look good, as opposed to trying to put together a
false set of books just before the audit, which would likely result in enough
errors auditors would have a good chance of catching them.

------
technoslut
I wonder if Japan suffers from a younger generation or a something being lost
in translation. I'm reminded of this article:

[http://www.theverge.com/2012/7/24/3177332/ia-oliver-
reichens...](http://www.theverge.com/2012/7/24/3177332/ia-oliver-reichenstein-
writer-interview-good-design-is-invisible)

>Japanese web or app design is not comparable to Japanese art, graphic design
or architecture. I could fill a page explaining why. It has to do with the way
Japanese read, with the corporate fear of doing something different, and with
the generally low level of design for the masses.

>One reason why Japanese web and app design feels weak is that technology
requires good active and passive knowledge of English. English is the lingua
franca of contemporary web and app development, both of our tools and our
discourse. Even if you master English-based Objective-C or JavaScript, if you
are not able to communicate with the international community of developers and
designers, you miss out on what is desirable, even what is possible. Japanese
developers and designers that don’t speak English are trapped within the
relatively low level of tech and design that currently reigns in the Japanese
corporate world.

\-----

>Even the Japanese companies’ strengths matter less now, as consumers have
lost the willingness to pay a premium for quality.

This is not true or Apple would not be as successful as they are today. In
some areas foreign manufacturers have caught up enough where quality is less
of an issue such as TVs. Consumers now value the TV less. This is not true of
smartphones, tablets, or cars. The latter is an area that Japan still carries
a heavy amount of influence.

~~~
verroq
Not just web development. Programming in general. Can't imagine what it would
be like to learn programming and don't understand English.

~~~
stcredzero
_> Can't imagine what it would be like to learn programming and not understand
English._

(I read your sentence with an implied subject, which is fine for casual
grammar, but the second phrase is subjunctive because the first is, so "do
not" and "don't" fit poorly there, even for casual speech.)

Just imagine everything in a different language. Hydro Quebec had an
application in French.

This is more evidence that community is key for programming. Community even
trumps native language!

~~~
verroq
> _English degree put to good use there_

That sentence did felt a bit awkward.

All mainstream programming languages are based on English and so are the
majority of resources. Even APIs for the operating systems we use and the
protocols for communication.

Everything is pretty much exclusively English. It'd be such a huge
disadvantage.

~~~
stcredzero
_> Everything is pretty much exclusively English. It'd be such a huge
disadvantage._

So, you're saying it's inconceivable that someone could be competitive in the
field without English skills, not that programming in another language period
is inconceivable. I'm totally down with that.

------
TorKlingberg
I wonder why Samsung and LG are doing so much better. They are just the kind
of giant do-everything conglomerates that are failing in Japan. South Korean
culture is rather similar to Japan, especially in business and education.

Some things I can think of: 1) Korea got started later, and has not had the
chance yet to get stale like Japan did in the 90's.

2) The population pyramid is not as inverted.

3) Korea has more PC focus, while Japan is about more gadgets. See how
Starcraft, a PC game, is enormous in South Korea but unknown in Japan. That
means more software and programming focus early on.

4) Lower labor costs. Not as low as China, but low enough to compete.

~~~
pheon
Because Korean is hungry, just like China.

Japan thinks nothing will change, everything continue smoothly, nothing bad
will happen.

... and yes I live and work here(Tokyo) for many years.

~~~
snogglethorpe
Yup. I blame the bubble.

I think many of Japan's woes are really a direct result of its earlier
success. Post-WWII Japan was _extremely_ poor, and succeeded incredibly
because they had a crazy-good work ethic, a relatively well-educated
population and tradition of industrial development, and were willing to make
sacrifices; as you state, "they were hungry." However the success that
followed resulted in changing the very attitudes that engendered that success,
and the bubble with its excesses accelerated this change greatly. Japanese
confidence, lifestyle, etc, are all now firmly that of a rich, "we've
succeeded! time to kick back!" country ... just in time to get the rug yanked
out from underneath it.

The instincts and mechanisms that got them so far aren't well prepared to
accommodate the changing world, but having tasted wealth, the country isn't
really all that eager to toss out what made it wealthy, even when that clearly
isn't working so well anymore... "better the devil you know..." etc.

This is the fate of all successful countries to some degree, but what I wonder
is: without the extremes of the bubble, could Japan have achieved a more
nuanced transition, becoming a rich country, but maybe remaining a bit more
flexible and wary?

I don't think it's really true that everybody thinks "nothing will change,
everything continue smoothly, nothing bad will happen." Japanese people very
much _see_ the country's malaise and feel worried about the future... but
merely recognizing the problem intellectually isn't enough. There has to be a
change in "gut instinct" too, and that is much harder. I suppose one way to do
it is to increase the pain level to the point where continuing as-is becomes
intolerable, and something _has_ to change; unfortunately that seems to be
route Japan is taking... :(

~~~
hga
The major problem I have with this thesis is that Japan's birthrate started
falling off a cliff in 1974
([http://en.wikipedia.org/wiki/File:Bdrates_of_Japan_since_195...](http://en.wikipedia.org/wiki/File:Bdrates_of_Japan_since_1950.svg)),
when things were getting quite a bit better, but still a dozen years before
the formal bubble started.

------
bergie
I suppose Japan is suffering from the _island effect_ , at least in their
mobile sector. Like Finland, they got a preview into the smartphone world
(Japan with i-mode, Finland with WAP). Companies were built, investments were
made, and they flopped, burning out a lot of entrepreneurs and killing
investor confidence. And then the real smartphone boom happened, and we moved
into it too cautiously.

I don't know enough of the French software business, but it would be
reasonable to assume that they had something similar when Minitel was replaced
by the web. How did the companies react and recover?

~~~
Xixi
I think you are forgetting an important part of the equation: the interior
market. In France it was much easier for entrepreneurs to move from the
Minitel to internet, than for people to trust a new medium over a trusted one
that worked seemlessly for decades.

So while your average American was emptying his wallet buying stuff on the
web, French were still checking their bank accounts on the Minitel. That makes
for a slow start, but eventually we moved on and there has been a lot of
successful web startup in France (that usually end up either moving to SV,
and/or being bought by American giant, but that's another story).

------
sxcurry
I almost feel bad for Sony. I've bought Sony TV's all my life, but when it
came time to buy a large flat panel TV, and I did all the comparisons, I
bought a .... Samsung. No comparison - Sony just doesn't hold up anymore, and
a lot of it is the internal firmware. I did buy a Sony BluRay player, and the
UI is absolutely the worst piece of junk I've ever seen. Shoulda bought a
Samsung!

------
mrschwabe
Nintendo is also at risk of free fall. If the WiiU doesn't perform well this
may be the last home console unit we see them release. Not to mention their
mobile gaming market has been decimated by Apple (IMO the 3DS should have been
cancelled and redeveloped as a 3DTablet to compete head on with iPad)

~~~
Tycho
Wouldn't say Nintendo is remotely at risk of free-fall. I think they are
slightly at risk of losing the viability of running their own games platform,
a self reliant strategy which suits their conservative, long-term philosophy
(Nintendo is a much older company than almost everything in the tech sector).

But if they have to pack-in their hardware business, they still have their IP,
their human capital, their connections, their marketing abilities. Mario on
the AppStore would be a licence to print money. They just wouldn't be in
control of their own destiny as much as before.

I can imagine them signing an exclusivity deal with Apple, who unlike the
other players in the game space don't have an internal development division.

~~~
mrschwabe
Good points and yeah, heck you're right Nintendo is over a century old. But I
think more likely than a Nintendo/Apple partnership - is a Sony/Nintendo
partnership. A deal that would leverage both companies' strengths to more
effectively compete against Apple.

Apple is now Nintendo's biggest competitor, a deal with them is a last resort
and would certainly be a white flag end of their hardware division.

------
kinkora
Interesting article and it echos my own views of Japan after visiting the
country last month for the first time in my life and spending 2.5 weeks there.

I grew up in the decade[1] where Japan absolutely dominated the consumer
electronics industry hence, I've always long held this view of Japan being one
of the most technological advanced economy in the world. But when I actually
went there, my view completely changed. They still are, to a certain
extent[2], but from a tech industry standpoint they are starting to lag behind
IMHO.

For example, when I was in Akihabara, I was told it was a electronics mecca
filled with all the latest Japanese gadgets and gizmos but when I was there
last month, all I saw was a myriad of chinese made/manufactured stuff. Most of
the electronics stuff I've already seen in my own country and there was
nothing much that looked truly new[3]. Maybe if I was walking down these
streets 15 years ago, I would have been pretty wide-eyed. Even if you look at
the one electronic device that a Japanese brand still dominates (which is
mobile), the Docomo made mobile phones are all mostly using android and
majority of them are flip phones[4]! And if you don't see someone using a
Docomo made-phone, it will most likely be an iPhone.

Don't take me wrong, Japan still is a fairly advanced country[5] but my trip
there last month made me realize that they are fast falling behind the rest of
their Asian counterparts: China and Korea in particular. These once mighty
Japanese tech companies needs to start making bold innovative moves instead of
living in the past and being hankered down by bureaucracy. If they don't do it
soon enough, one day it will be too late and it will have a devastating effect
on the Japanese economy.

[1] Child of the 80s/90s.

[2] Japan may be losing innovative and competitive ground in terms of anything
tech related but they are still quite ahead in some aspects. I.e. The
transportation industry (trains in particular) are light years ahead. The
Shinkansen(bullet train) itself was built in the 60s but still looks like it
was designed in the 25th century.

[3] Most of the electronics were "new" and "latest" but none of them were
"unique". They were the same Korean, Taiwanese or China branded electronics
that you see anywhere else in the world (or at least in my country). You will
be hard pressed to find any funky new Japanese gadgets or gizmos.

[4] [http://www.blogcdn.com/www.engadget.com/media/2008/05/ntt-
do...](http://www.blogcdn.com/www.engadget.com/media/2008/05/ntt-
docomo-906i.jpg)

[5] One thing I admired when I was in Japan is that, a lot of their technology
(transportation system, infrastructure, telecommunications, etc) were built
decades ago but it still looks fairly advanced to this day. Though, you will
noticed it is starting to age.

~~~
trotsky
It's the economy, stupid. [1]

<https://en.wikipedia.org/wiki/Lost_Decade_(Japan)>

20 years of no growth buried them under a mountain of debt, crippling the
domestic market which had been a big part of their rise (c.f. china).

[1] It's an expression.

~~~
macspoofing
>20 years of no growth buried them under a mountain of debt, crippling the
domestic market which had been a big part of their rise (c.f. china).

I don't think a lagging economy explains why Sony and most Japaense tech giant
missed the web/mobile boat. They missed that boat, because they missed that
boat. The US economy is in its own "lost decade" but Apple, Google, and
Microsoft are doing quite well.

~~~
trotsky
It doesn't seem like you really gave a reason for thinking it not to be true.
It's an awful big coincidence that all of japan's CE firms would lose their
ability to innovate simultaneously around the time of a extended economic
slump.

You're thinking in overly short time horizons. Major economic impact takes
time to reverberate. Where was Sony in '95? On top. US Stagnation started in
'08 give or take, so it really hasn't been that long. A lot of California's
current success (in the web and elsewhere) can be traced back to the economic
policies of the 90's and the easy money of Y2K. Where do you think the angel
money came from? What would happen if there weren't small innovators available
everywhere for google et al to purchase to keep their growth up?

~~~
kinkora
I couldn't agree with you more.

When I was in Osaka, I stayed at a backpackers and I met a few young Japanese
locals. Between my extremely poor and limited Japanese and their broken
English, we were somewhat able to maintain a conversation and I mentioned the
same thing to them.

Since it was only a subset of 5 or so people, I wouldn't count it as the
general consensus of the Japanese people but they were very aware of how
stagnant the big Japanese tech giants (and the country's economy) have become
and how Japan is already lagging being China and Korea.

What I did find interesting is that these young blokes blame the government
rather than the company themselves.

------
batgaijin
I think it's primarily because 1). these companies push their employees so
hard and 2). a majority of them don't know English 3). software programming is
seen as something for nerds too lame to do electrical engineering

1 is important because as we all know, if you are a good programmer, it's not
because you are _good_ it's because you spend your spare time catching up on
other facets and honing your skills. When there isn't time for that, what do
you expect to happen?

2 is equally important simply because Japan is stuck in their own land of tech
help. I think things are much better now because of Google Translate and such,
but most Japanese programmers have basically been isolated from us.

3 is the biggest one. Despite Ruby got invented there, most programmers there
do not know it. There are no Japanese Operating Systems. There is no Japanese
business software market. Most Japanese companies have absolutely _terrible_
sites from last decade. [as a source <http://www.economist.com/node/18958643>]

So, what's to be done about it? Well, luckily Japan has insanely high internet
speeds, and everything is moving to virtualization everywhere else. So, at the
end of the day, there is a big chance that everything could shift in Japan at
a much, much higher rate than in America. However, this will take a number of
consulting companies pushing pretty pro American attitudes towards business
culture as well as programming, which simply isn't going to fly all that well
there.

Personally, I think Japan needs a much higher number of startups, and they
need to basically do a startup chile thing for web startups. They need them
badly, they need a majority of the existing work force radically retrained,
and the people coming into the work force need to be pushed in very different
directions compared to the usual.

Japan has the might, they have the know how. The main problems are simply that
they can't keep up with the rate of development and change that other
companies can handle, and the only way that's going to change is if these
companies start isolating portions of themselves like startups.

My personal idea, which I would be very happy to see go into use, would be to
start holding out of work 'bounties'. Coolest Erlang program developed this
month gets $2000! Best new language gets $5000! That pushes people to become
better, share knowledge, and find other smart people to get ahead and get the
money, which would hopefully lead to those groups of people doing startups
together after finding a possible 'founder'.

Also: there is no FSF/EFF in Japan. And because of the max 1% of the budge the
military gets they don't even have the intelligence companies or the drive for
them as we do.

p.s. I can't read Japanese, so everything I know is hearsay.

~~~
minikomi
I work in a Japanese company which began strongly in the mobile market (on
imode) but which is now pretty much pandering to the lowest common denominator
with fortune telling, social games etc... My workstation is a win xp box from
a few years ago with 2 gig ram. So is everyone else's. We still invest a lot
of time & effort making flash/terrible HTML inline styled tag soup for the
Gala-kei market (Galapagos keitai / mobile). Being native English speaking,
I'm often tasked with obscure bug squashing or creating demo apps to show
other debs how to use something, since most documentation is in English. I
will bide my time for now, but i do feel a need to move to a more forward
looking position.

Oh, and I'm usually one of the first to go home.. We work in a massive open
desk environment so i'm pretty sure of that!

~~~
w1ntermute
Haha, it's Gree, isn't it? I'm guessing things aren't going so well since
kompu gacha was banned.

------
nradov
Much of this was predicted pretty well in Alex Kerr's 2002 book "Dogs And
Demons: Tales From the Dark Side of Modern Japan". Some of his criticisms
seemed a little overwrought but I think his general thesis has been proven
out.

<http://us.macmillan.com/dogsanddemons/AlexKerr>

------
mtw
not true. Japan tech control digital photography and videography

~~~
wisty
Right, they make nice glass, nice sensors, and nice processing chips. But once
you've taken the shot, you use Abode Photoshop to do the editing, and share it
using a PC or Mac.

That is, assuming you didn't shoot with your iPhone.

~~~
hollerith
IIRC, a lot of the components in the iPhone are made by Japanese companies.

------
rubashov
Isn't this to some degree a matter of fixating on consumer brands? To my
understanding Japan still runs a massive trade surplus in high tech equipment
and parts and has many super profitable firms making that stuff. The parts
that go into or make your phone or TV comes from Japan. This is just what I
hear.

