Jobs Caught Fishing in Japan

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Steve Jobs and friends are rumored to be fishing for a deal in one of the most competitive and dynamic mobile markets in the world: Japan. Word has spread that Apple (Nasdaq: AAPL) has been in separate talks with NTT DoCoMo (NYSE: DCM) and Softbank about offering the iPhone in the tech-savvy nation. This follows Apple's recent talks with operator China Mobile (NYSE: CHL) to offer the combo phone and media player in mainland China.

For the iPhone, today is all about the U.S., but tomorrow is about the world. While exclusive U.S. seller AT&T (NYSE: T) has already helped Apple sell more than 1.4 million iPhones, carriers from around the world are critical to reaching Steve Jobs' goal of 10 million iPhones shipped by the end of 2008.

Japan is just one of dozens of markets Apple hopes to enter, but launching there will set an important milestone for the iPhone. Mobile devices are hugely popular in Japan, woven tightly into its culture, and a phone's style and applications will make or break a product. Operators such as Deutsche Telekom's (NYSE: DT) T-Mobile are profiting from low-end phones and family-oriented plans in the states, but Japan is all about the state of the art.

The gadget-crazed population makes a tough market for foreign device makers. While Nokia (NYSE: NOK) absolutely dominates the global market for handsets, the Finnish designer doesn't even crack the top five wireless phone sellers in Japan.

Two things are certain: First, the iPhone will have far more competition in Japan than it did in the U.S. Second, Apple will have to tailor the iPhone for the Japanese market. Japanese carriers will likely demand significant improvements -- foremost being a high-speed, 3G version of the phone -- as it would be an embarrassment to offer an older generation of technology there.

As such, Apple's iPhone designers will have to bring their A-game to succeed in Japan, and even then, it's not certain that the device will be a hit. But if Apple can capture even a sliver of the market, it will once again do what many others have failed to accomplish.

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