Bluetooth yet to become popular in Japan

Plen: The Bluetooth Controlled Robot

Interesting article from the Recent Signature Magazine:

Tokyo is the high-tech capital of a gadget-loving country. And yet, “consumer awareness and acceptance of Bluetooth technology has lagged in Japan,” according to Emma Naudo, an analyst at IMS Research, a U.K.-based firm that publishes an annual report on the subject.

Derek Soh is the Bluetooth SIG’s marketing director for APAC and Japan. He agrees with Naudo’s assessment, noting a Millward Brown study that showed only 60 percent of the Japanese population is aware of the technology, versus up to 85 percent elsewhere. This is puzzling, given that Japan has so many companies developing and pushing the technology. According to Soh, among companies represented in the Bluetooth SIG, Japan has the third-highest number of Bluetooth SIG Associate members after the United States and Taiwan, and it boasts the fourth-highest number of Adopter members.

So why is Bluetooth technology under performing in a land that is often the first to embrace the latest technology?

“Headset-to-handset connection has been Bluetooth technology’s biggest driver in handsets,” says Alex Green, also of IMS Research. “So if the headset market hasn’t taken off in Japan, it’s going to reduce the demand for Bluetooth in handsets.”

In Europe and the United States, concerns about the health effects of cellphone usage and laws against using mobile handsets while driving fueled the proliferation of wireless headsets. However,in Japan people tend to spend less time driving and more time taking public transit. There is also a cultural preference for mobile text messaging over making voice calls. While the Japanese government enacted stiffer penalties in 2004 for driving while talking on a cell phone, the uptick in Bluetooth enabled headset sales has been modest. “Headsets just don’t appear to be available in as many retail outlets as in other countries,” says Green.

According to Mihoko Kasuga, an executive with SoftBank Mobile, the nation’s third-largest and fastest growing mobile phone service provider, Japanese consumers see Bluetooth technology more as an added bonus than an essential feature. For transferring data, infrared comes standard on most handsets and is the preferred method of quickly exchanging contact details. Mobile phones also have dedicated e-mail addresses, and Japan’s high-speed 3G networks facilitate data transmission.

But there is light on the horizon. “The number of Bluetooth enabled handsets in Japan is forecast to grow from just under 20 million—30 to 40 percent of those shipped—in 2007 to over 60 million, 80 percent, in 2013, a CAGR (compound annual growth rate) of 24 percent,” says Naudo.

In addition to more headset use, there are other reasons for the optimistic forecast. “Streaming music services over mobile networks, such as Japan’s Chaku Uta, will be key drivers of Bluetooth inclusion in cellular handsets,” predicts Andy Bae, a senior analyst at New York-based ABI Research.

Bluetooth technology is making inroads in several other Japanese sectors as well. The auto industry is installing the wireless specification in more and more new cars. “Japanese automakers have lagged behind their European and U.S. counterparts in adopting Bluetooth technology, but now they are beginning to catchup,” noted an article in The Nikkei Weekly, a business newspaper published in Tokyo.

Says Green at IMS Research, “We estimate that around 24 million Bluetooth chips were used by automotive companies in 2007,” although he added that “only around 10 percent of cars produced in 2007 had Bluetooth technology built in at the point of production.” That has opened up a new market for after market products like hands-free kits, navigation devices and A/V systems.

Another sector where Bluetooth technology may see further success in Japan is video games. “In 2007, total shipment volume of Bluetooth enabled gaming devices such as the Nintendo Wii and Sony PS3 surpassed that of Bluetooth enabled headsets – amazing!” says Soh.

Finally, several companies, including Toshiba, will begin rolling out Bluetooth low energy enabled devices aspart of a personal health care ecosystem by mid-2009, and many hope this effort will help familiarize Japanese consumers with the technology. (Click here for more on Toshiba and the Japanese health care market.)

With the ongoing updates to the Bluetooth core specification, developers are planning plenty of newproducts featuring the technology. Whether Japanese consumers will bite remains to be seen.

Beau Miller has lived in Tokyo for 17 years and is the editor of Metropolis, Japan’s weekly lifestyle and listings magazine for the English-speaking community.