Sold in Japan Macintoshes carry California cachet

July 27, 1992|By Knight-Ridder News Service

TOKYO -- Though Apple Computer Inc. owns less than 10 percent of the Japanese personal-computer market, the Macintosh seems to be everywhere here: a prop on a weekly television show and on quiz shows, on T-shirts and on the desks of yuppie business people.

In fact, the Macintosh may have more cachet in Japan than in the United States because of the way it fits with how Japanese work and -- some say -- simply because it appeals to the California-loving Japanese.

But in a country that is a tough sell for U.S. high-tech companies and is dominated by NEC Corp., which has more than 50 percent of the personal-computer market, Apple has had to adopt some unusual strategies just to be seen. The company plasters its name on billboards on Tokyo streets and subways (something it doesn't do anywhere else) and even sponsored a Janet Jackson concert appearance and a women's golf tournament.

It is that kind of marketing savvy that has helped Cupertino, Calif.-based Apple leapfrog most of its U.S. competitors and grab what some people estimate could be more of the Japanese market than even mighty International Business Machines Corp. has by the end of this year.

Apple is expected by analysts to have more than 8 percent of the Japanese market by the beginning of 1993, with sales approaching $500 million. And unlike the Japanese computer industry, which is growing at only about 3 percent a year, Apple grew 40 percent in Japan last year and is expected to grow at least 25 percent this year -- all in a country where some Apple products are twice as expensive as they are in the United States.

Although Apple struggled for its first five years in Japan and didn't start making money consistently until 1989, it may have actually had an easier time doing business here than many of its U.S. competitors. To begin with, Japan is the only major market in the world where it's fine not to be IBM-compatible, analysts said.

"IBM compatibility simply doesn't mean anything here," said Steve Myers, a senior technology analyst with Jardine, Flemming Securities & Co. in Tokyo. "Because NEC is such a large portion of the market and isn't IBM-compatible, Apple isn't disadvantaged when selling in the market. And because the Macintosh has some distinct features -- such as its graphical user interface -- it has something to offer that Compaq and AST and Dell don't have."

Almost as important is the fact that the Macintosh -- its shape, user interface and features -- appeals to the trendy Japanese buyer.

"The Macintosh is well-designed for Japanese people," Shigechika Takeuchi, president of Apple Japan, said in an interview in the company's new offices in an exclusive area of Tokyo. "The Japanese language, the characters and the thinking method here is similar to the whole idea of the Macintosh. And the Japanese people envy the California-type culture, and even if they can't be like Californians, or live there, they can buy a product from there."

But for Japanese consumers to know they liked the Macintosh, they first had to know that it and Apple existed, said Ian Diery, head of Apple's Asia Pacific operations.

Although Apple Japan was formed in 1983, it did little more than limp along for the first five years. But starting in 1989, Apple hired Mr. Takeuchi and kicked off an aggressive advertising campaign focused on promoting the Apple name and, to a lesser degree, the Macintosh.

"We had to create demand," Mr. Diery said. "And we had to find a distribution channel for our products, and we couldn't do that if we didn't have demand. So we had to push the Apple name."

At the same time, the company started selling its LaserWriter with kanji characters -- one of three Japanese alphabets -- as well as Japanese-language versions of the Mac IIcx and the SE-30.

From that point, Apple Japan has had three straight years of profitability, Mr. Diery said, and demand for the company's products has boomed.

The company now has 2,000 stores selling Macintosh products, but it continues to spend 70 percent of its advertising dollars on brand awareness. And Mr. Diery boosted Apple Japan's ad budget by 50 percent this year over last year, in order to keep the momentum going.

Now that the Macintosh is selling well, and Apple is offering practically its complete product line in Japan, Mr. Takeuchi is working on establishing some Japanese computer stores that sell only Apple products. Like the McDonald's fast-food franchise, Apple will provide the stores with all the furniture, fixtures and the layout to ensure they have the "right look." It will also help with service and support so store owners can sell to larger businesses.

While Apple has sold well for home use and in small businesses, it has not done as well in large corporations and in government and education. In the past several weeks, Apple has licensed several Japanese electronics firms to resell Apple products to large businesses and institutions.

"We want to have 10 percent of the market by 1994, but ultimately we're not going to be satisfied with less than 25 percent of the market," Mr. Diery said. "With less than 15 percent of the market, they can still shrug us off, and I'm not going to be relaxed until we have at least that. We are just going to have to yell louder than anyone else in order to be heard."

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