Japan’s Failure in the Smartphone Market and Rise of the Material Industry

 

 

BALMUDA, called the “Apple” BALMUDA a Japanese home appliance manufacturer, released its first smartphone in November 2021. Dubbed the “Apple” of the home appliance industry for its

sophisticated designs, Balmuda had been receiving heightened attention surrounding this launch. In a press conference leading up to the release, CEO Gen Terao had pointed out that other smartphones were rather uniform in design. He said, “We will unveil new devices based on our experience in the home appliance business so far.”

I was actually half-confident about this launch. But now that the phone is out, I wanted to see how it compares to others on the market, such as the Samsung smartphones that currently occupy more than 10% of market share in Japan.

Balmuda’s phone is a “bar-type” smartphone. What distinguishes it from other phones is its markedly rounded corners and thick bezel. For example, Apple’s iPhone 13 (released in 2021) has only marginally rounded corners for grip enhancement and maintains an angled design. The same goes for Samsung’s Galaxy phones, which have rounded corners but are rectangular overall. Balmuda’s smartphone is different. With perfectly round corners, its design is more reminiscent of Samsung’s “Kobiphone ” released in 2009.  Furthermore, the bezel on Balmuda’s phone is noticeably thick on all four sides – a sharp deviation from the current market’s tendency to minimize bezels as much as possible for a full-screen appearance.

Though the product was not entirely visible in the teaser photos released by Balmuda, GAPSIS, a Japanese Android media outlet, adjusted the brightness of these photos to reveal its design further. Unlike other smartphones, Balmuda’s product has a thick back and is designed with curves. Would it tilt when placed on a desk? Perhaps. At the very least, it is round enough to make you want to try.

The back of the phone consists of a matte material. The brand’s name is engraved in large, cursive letters in the center. A camera, LED flash, and speaker are located at the top. A part of the phone is elevated, but it is not yet known what function this serves.

Though Balmuda appeared to promise a release of stylish products in its announcements, the phone’s design does not appear to be that special. Rather, it is similar to the design of smartphones released by Apple and Samsung some five to ten years ago. IT media GIZMODO said, “It feels a little tacky.” On the other hand, GAPSIS referred to it as an “independent design”. “The fact that a Japanese company has appeared in the Android smartphone market is very precious and happy news,” they said.

Balmuda also announced a new brand along with the teaser for the phone – Balmuda TECHNOLOGIES. It will announce smartphones and other IT devices under the brand name.

Balmuda is struggling with its ambitious entry into the smartphone market. Its phone had been jointly developed in partnership with Kyocera (a home appliance company) and BALMUDA, called the “Apple”  BALMUDA, a Japanese home appliance manufacturer, released its first smartphone in November 2021. Dubbed the “Apple” of the home appliance industry for its sophisticated designs, Balmuda had been receiving heightened attention surrounding this launch. In a press conference leading up to the release, CEO Gen Terao had pointed out that other smartphones were rather uniform in design. He said, “We will unveil new devices based on our experience in the home appliance business so far.”

I was actually half-confident about this launch. But now that the phone is out, I wanted to see how it compares to others on the market, such as the Samsung smartphones that currently occupy more than 10% of market share in Japan.

Balmuda’s phone is a “bar-type” smartphone. What distinguishes it from other phones is its markedly rounded corners and thick bezel. For example, Apple’s iPhone 13 (released in 2021) has only marginally rounded corners for grip enhancement and maintains an angled design. The same goes for Samsung’s Galaxy phones, which have rounded corners but are rectangular overall. Balmuda’s smartphone is different. With perfectly round corners, its design is more reminiscent of Samsung’s “Kobiphone ” released in 2009.  Furthermore, the bezel on Balmuda’s phone is noticeably thick on all four sides – a sharp deviation from the current market’s tendency to minimize bezels as much as possible for a full-screen appearance.

Though the product was not entirely visible in the teaser photos released by Balmuda, GAPSIS, a Japanese Android media outlet, adjusted the brightness of these photos to reveal its design further. Unlike other smartphones, Balmuda’s product has a thick back and is designed with curves. Would it tilt when placed on a desk? Perhaps. At the very least, it is round enough to make you want to try.

The back of the phone consists of a matte material. The brand’s name is engraved in large, cursive letters in the center. A camera, LED flash, and speaker are located at the top. A part of the phone is elevated, but it is not yet known what function this serves.

Though Balmuda appeared to promise a release of stylish products in its announcements, the phone’s design does not appear to be that special. Rather, it is similar to the design of smartphones released by Apple and Samsung some five to ten years ago. IT media GIZMODO said, “It feels a little tacky.” On the other hand, GAPSIS referred to it as an “independent design”. “The fact that a Japanese company has appeared in the Android smartphone market is very precious and happy news,” they said.

Balmuda also announced a new brand along with the teaser for the phone – Balmuda TECHNOLOGIES. It will announce smartphones and other IT devices under the brand name.

Balmuda is struggling with its ambitious entry into the smartphone market. Its phone had been jointly developed in partnership with Kyocera (a home appliance company) and Softbank (a telecommunication company). Toshiba and Fujitsu were highly anticipated by the Japanese people because they were their first smartphones in a long time in the Japanese smartphone industry.

Unfortunately, sales were urgently suspended within a month of its launch due to defects with radio wave certification. The issue was later resolved via software upgrades, and sales recommenced on the 17th; however, the market had already cooled down by that time. Supplies have already begun to be disposed of close to “ddaeng processing” online. Currently, Balmuda phones are priced at 19,000 yen – nearly 90% off the initial store price – and are virtually in stock processing.

The industry evaluates this as a predicted disaster. The biggest reason for Balmuda’s failure was that it entered areas that did not have contact with existing businesses. Balmuda jumped into the market while solely relying on its strong sense of design, but it failed to meet the more important expectations relating to performance. The Balmuda phone uses a Qualcomm Snapdragon 765 processor, which is equivalent to the processor used in the three-year-old Galaxy S10.

Furthermore, Balmuda stuck by its existing strategy when it came to price policy. The plan was to draw royalties from Balmuda fans by setting the factory price high at 1.5 million won. This did not work in the smartphone market.

Balmuda plans to make up for its insufficient sales performance by penetrating such overseas markets as Korea. CEO Gen Terao said, “In the future, Balmuda brands can enter Korea.”

And I’d like to talk about the Japanese industry. In the past, when Japan’s electronics industry was in boom, it was unprofitable to import materials for electronics from abroad. Hence, Japan became committed to investing in the material industry as a core business in the country.

Japan was also inspired by the United States’ shift away from domestic manufacturing. Though there was a time when the United States was home to most of the world’s factories, the country eventually moved production overseas to focus on the material industry instead. Their reasoning was that while anyone could produce goods over time, materials could not be obtained without long-term investment and effort. Japan followed suit.

According to data from the Ministry of Economy, Industry and Energy of Japan, there are around 30,000 businesses in the Japanese material industry, with around 1.2 million employees and 56 trillion yen’s worth of product shipments (about 600 trillion won). The Japanese government is creating a project to develop and highlight the size of its material industry. The material industry accounts for 17% of employees and 18% of product shipments in the entire manufacturing industry. Within the material industry, the chemical industry comprises the majority. The material industry is massive in Japan, though the general public may not feel it directly.

It is further worth noting that Japan is home to an education system where science and engineering students can truly flourish. Owing to many professor recommendation systems, science and engineering students attending top Japanese universities often do not engage in employment activities. There is a great demand for science and engineering graduates, with 68 trillion club companies in the chemical sector alone listed in Japan. (The scale itself is different from Korea.) Hence, talented students do not flock to only medical schools. It could even be said that students entering Tokyo National University of Engineering and Natural Sciences could very well enter any medical school in Japan. Advancements in science and engineering, along with growth of companies and industries, help form the foundation of the country.

According to Japan’s Shinetsu Chemical Industry Co., Ltd., sales are about 12 trillion won, but about 600 billion won is spent on research. In other words, research funds account for about 4.2% of total sales. Asahi Kasei has about 20 trillion won in sales, about 900 billion won in net profit, and 900 billion won in research funds. It is a company that invests its net profit in research funds. It is a scary part of Japan’s material industry and how much money the private sector has invested in the country and invested for a long time.

According to LG Chem’s research funds, 130 billion won, or 2.7% of sales, was used for research in 2015, while 260 billion won, or 4.0% of sales, was used for research in 2019. Lotte Chemical’s research expenses are 0.4% and Hanwha Chemical’s 1.8%. Large Korean companies are also gradually increasing their R&D expenses. However, it is still lacking a lot. Trade disputes with Japan arise and people focus on semiconductors, but materials are used everywhere besides semiconductors. It is regrettable that such a material industry shows a huge gap with countries in trade disputes.

 

Sam kim

 

 

Asia Journal