By YURI KAGEYAMA, AP Business Writer
TOKYO – When Sony Corp (NYSE:SNE – news) (news – web sites). President Kunitake Ando showed off the new Walkman meant to counter the assault by Apple’s iPod portable music player, he held the prized gadget at the gala event upside down.
That may have been a bad omen.
The iPod is proving a colossal hit on the Japanese electronics and entertainment giant’s own turf. The tiny white machine is catching on as a fashion statement and turning into a cultural icon in Japan, much the same way it won a fanatic following in the United States.
Apple Computer Inc. has launched a marketing campaign in Japan with catchy TV ads and billboards painted on Tokyo trains. It opened its first Apple store in Tokyo’s glitzy Ginza late last year and is opening another in the city of Osaka this month.
“I only want something I can believe in,” says 21-year-old design-school student Hiroyuki Sakurai, who was all smiles after buying an iPod recently at the bustling Apple store. “It’s a question of sensibility.”
When the colorful and smaller iPod mini went on sale in July, more than 1,000 people waited for the store to open. The waiting list for minis is now several weeks’ long.
Although Apple doesn’t release regional sales figures, six of the top eight selling music players in Japan are iPod models, according to Gfk Japan, a market research company.
Its white earbuds are so well-known, just wearing them on Tokyo streets can make passers-by smile approvingly. IPod chat pervades Internet bulletin boards. The mini is such a hit it’s being offered as prizes in lotteries sponsored by drink and candy companies here.
Porter bags, a cool brand among Japanese youngsters, sells iPod carrying cases. Rock band Orange Range, hip-hop musician Makoto Sakurai and disc jockey Sugiurumn are iPod users.
“First of all, the iPod design is cute,” said movie star Shosuke Tanihara, who listens to Prince and Janet Jackson with his iPod while cooking pasta at home or driving his Mercedes. “Japanese electronics products may come packed with a lot of functions, but they usually have more buttons and their designs are cluttered.”
The largest, 40-gigabyte version, sells for $406 in Japan.
Last month, Sony unveiled the hard-drive Network Walkman — a product that goes head-to-head against the iPod and promises longer battery life.
It was at that event Ando showed it the wrong side up — an error that has Apple officials smirking. Sony will not release sales figures for Network Walkman, but says they’re meeting targets.
Sony marketing manager Atsushi Kubota said his company wants to promote a wide range of music players in the Walkman lineup, including various types of disks and memory cards, not just the hard drive. Global Walkman sales still total 20 million a year, according to Sony, compared with more than 3.7 million iPods shipped worldwide so far.
“We want to push the advantages of each type of medium,” Kubota said.
Sony has time to catch up to iPod, but iPod has a head start, says Kazuya Yamamoto, analyst at UFJ Tsubasa Securities Co. in Tokyo.
“To come up with an innovative gadget that links well with software — that’s something Sony should have done,” Yamamoto said.
The iPod craze in Japan is happening even though Apple doesn’t offer the music download service iTunes Music Store.
Apple will offer the Japanese equivalent of iTunes within the next year, with prices comparable to the 99 cents a tune it charges in the United States, Apple vice president Yoshiaki Sakito, a former Sony employee, said in an interview at Apple’s Tokyo headquarters
That’s almost certain to change the music download industry in Japan by winning over those who now opt for cheaper CD rentals they can record onto MDs at home. Commercial downloads cost about $2.30 a tune in Japan.
But getting music off the Internet is rapidly on the rise in Japan. The Recording Industry Association of Japan estimates 2.4 million Japanese are downloading music off the Net, mostly unlawfully, pressuring Sony on one more front.
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