How Steve Jobs 'out-Japanned' Japan

Apple CEO Steve Jobs speaks during an Apple special event at the company's headquarters on Oct. 20, 2010 in Cupertino. Jobs announced on Jan. 17 that the Apple board has granted him a medical leave of absence. Apple CEO Steve Jobs speaks during an Apple special event at the company's headquarters on Oct. 20, 2010 in Cupertino. Jobs announced on Jan. 17 that the Apple board has granted him a medical leave of absence. Photo: Justin Sullivan, Getty Images Photo: Justin Sullivan, Getty Images Image 1 of / 1 Caption Close How Steve Jobs 'out-Japanned' Japan 1 / 1 Back to Gallery

Jeff Yang muses on how Apple managed to beat the tech titans of Japan by playing their game, only better

The better part of a month has gone by, and most pundits have already weighed in on this year's CES -- the global gadget extravaganza that makes Las Vegas the gravitational center of the geek universe every January. The consensus? Meh.

That's because the cacophony and crowds and celebrity sightings -- is there a rapper who doesn't have an audio accessory line at this point? -- couldn't disguise the fact that Apple, the new king of the tech hill, had once again refused to participate in a gathering dominated by old-guard standouts like Sony, whose gargantuan 25,000 square foot pavilion is always the show's largest, and which traditionally pulls out the razzle-dazzle stops in its presser (last year: country pixie Taylor Swift; this year, the stars of "The Green Hornet" -- and their car).

And that meant all the noise and clamor and glitz and glamor would almost certainly be made moot by whatever game-changing innovations Apple chose to unleash at its next invitation-only private unveiling a few months later.

Not that the lack of an official presence prevented Apple's fingerprints from being found nearly everywhere at CES. iPhone and iPad accessories were the only things more ubiquitous than celebrity-branded headsets, and most of the show's plethora of new services and devices desperately touted their compatibility with iOS apps and hardware. (Those that didn't, from smart TVs to smartphones, were instantly benchmarked against existing or fantasized Apple products -- and more often than not, found wanting.)

In short, despite CES's parade of CEO keynotes and bold-faced name guests, the man who did the most to shape the show was the one who wasn't there at all.

And given Steve Jobs's recent announcement that he's once again facing health problems, it's valid to wonder if his absence is something the technology world -- and Apple's millions of global fans and customers -- may soon have to get used to beyond CES as well.

Ma, not meh

Jobs' refusal to attend CES was hardly an accident: Apple has never made a showing at the event in its three decades of existence, and as long as Jobs is its CEO, it probably never will.

CES is the home of the mainstream, the chorus, the echo chamber; by not attending, Apple maintains its identity as the maverick, the soloist, the think-different visionary -- even though its massive success has now made it the world's eighth-largest consumer technology company by revenue.

That ability to express by omission holds a central place in Jobs's management philosophy. As he told Fortune magazine in 2008, he's as proud of the things Apple hasn't done as the things it has done. "The great consumer electronics companies of the past had thousands of products," he said. "We tend to focus much more. People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas." (Jobs sometimes says this even more bluntly: Nike CEO Mark Parker likes to recount the advice Jobs gave him shortly after Parker's promotion to the top spot: "You make some of the best products in the world -- but you also make a lot of crap. Get rid of the crappy stuff.")

Other companies fail to do things because they've overlooked potential openings or are cutting corners to save money; under Jobs, however, every spurned opportunity is a conscious, measured statement. It's why the pundits who give Apple products poor reviews for not including industry-standard components -- for instance, the iMac's lack of a floppy drive -- just aren't getting it: Apple products are as defined by what they're missing as much as by what they contain.

To understand why, one has to remember that Jobs spent much of the 1970s at the Los Altos Zen Center (alongside then-and-current Gov. Jerry Brown) and later studied extensively under the late Zen roshi Kobun Chino Otogawa -- whom he designated as the official "spiritual advisor" for NeXT, the company he founded after being ejected as Apple's CEO in 1986, and who served as officiant when he wed his wife Laurene in 1991.

Jobs's immersion in Zen and passion for design almost certainly exposed him to the concept of ma, a central pillar of traditional Japanese aesthetics. Like many idioms relating to the intimate aspects of how a culture sees the world, it's nearly impossible to accurately explain -- it's variously translated as "void," "space" or "interval" -- but it essentially describes how emptiness interacts with form, and how absence shapes substance. If someone were to ask you what makes a ring a meaningful object -- the circle of metal it consists of, or the emptiness that that metal encompasses? -- and you were to respond "both," you've gotten as close to ma as the clumsy instrument of English allows.

While Jobs has never invoked the term in public -- one of the aspects of his genius is the ability to keep even his most esoteric assertions in the realm of the instantly accessible -- ma is at the core of the Jobsian way. And Jobs' single-minded adherence to this idiosyncratically Japanese principle is, ironically, what has allowed Apple to compete with and beat Japan's technology titans -- most notably the company that for the past four decades dominated the world of consumer electronics: Sony.

Learning the rules

Alan Deutschman, Reynolds professor of business journalism at University of Nevada-Reno and author of "The Second Coming of Steve Jobs" -- the definitive unauthorized biography of the Apple CEO -- notes that from his early twenties on, Jobs had a fascination with Sony that bordered on obsession.

"It was very nearly fetishistic, in fact -- he even had a collection of Sony letterhead and marketing materials," laughs Deutschman. "Sony was a company that Jobs instinctively admired and saw as model from the very beginning. So it's been an interesting transformation over time, to see Apple supplant Sony as the center of the consumer technology universe."

Deutschman sees Jobs as having some uncanny similarities to Sony's founder -- not Akio Morita, who was Sony's CEO and public face, but his elder partner Masaru Ibuka, the proprietor of the original radio repair shop that evolved into the electronics giant and, during its rise to market dominance, the company's chairman and the architect of its philosophical foundation.

"Ibuka was really the heart and soul of the company," says Deutschman, who wrote about Sony's elder statesman in his most recent book, "Walk the Walk." "He was the one responsible for Sony's sense of purpose. This was a company that was launched in a Tokyo that had been leveled by firebombing in World War II, that had experienced the kind of destruction associated with Hiroshima and Nagasaki, and whose residents were facing homelessness, hunger and desperation. And yet Ibuka laid out a mission statement for Sony that was aimed at changing the world."

That statement was simple and to the point: "Sony will be the company that is most known for transforming the global image of Japanese goods as being of poor quality." It defined Sony by what it would not do -- make bad products -- making it something of an omission statement, if you will.

By way of example, Deutschman tells the story of how Sony entered the color TV marketplace, noting that in the Sixties, when color TV was going from 3% to 25% of the market, Sony was one of the few electronics companies that didn't sell a color model. "People were telling Ibuka, 'You have to come in to this market, everyone will take your market share,'" says Deutschman. "And Ibuka refused, saying, 'No, we will only do great products. We will only do high quality goods. We will only do breakthrough technology.'"

As a result, the company found itself in a precarious financial situation, losing out to its primary rivals -- until it came upon the aperture-grille technology that Sony unveiled in 1966 as the core of the Trinitron TV. A full 25% brighter than its rivals, Trinitron became the best-selling color TV for the next quarter century.

"At the time, Sony was committed to not releasing a crappy product just because the market was there; they waited until they had a truly revolutionary innovation, combined it with great design and then profited from it for long, long time," says Deutschman. "For decades, Sony was a perfect place for engineers to fully use their creativity, because it was focused on bringing real meaning and benefit to society by making great products. Sadly, in the last couple of decades, Sony has lost its way."

Changing the game

What Sony misplaced, arguably, was its sense of ma -- its understanding of what it shouldn't do, even if it could.

Buoyed by blockbuster successes like the Trinitron and the Walkman, Sony was led to believe it could launch any product and create a new market category around it. As a result, points out USC Annenberg professor and director of new media Andrew Lih, Sony became "too complex, with too diverse a set of offerings, without sending a clear signal to the customer what the ideal vision should be for its products."

Lih points out that recent mass-market consumer technology successes have generally had a simple concept, a clear purpose and a thoughtfully limited set of features and options, giving as examples the Flip camera, the Kindle, the iPod and the iPhone.

"Consumer electronics are so complex today that they can't simply be a checklist of features," says Lih. "The brands that curate their products well, with thoughtfulness and consideration for the customer, end up the winners. And Sony has hardly done that."

The apex of Sony's why-not-what-the-hell attitude toward product introductions was reached in September 2007, when -- six months after Apple announced the original iPhone -- it introduced the $399 Rolly, an egg-shaped MP3 device that would spin around and flap its winglets to the rhythm of the music it played. The Rolly was a disaster, as anyone would likely have guessed given its price point and exceptional lameness -- but it failed to teach Sony a lesson.

No better example of this exists than the company's go-for-broke focus on 3-D television. Last year's CES saw the industry unleash a flood of 3-D TVs, only to encounter ho-hum reactions from consumers and, subsequently, mediocre sales -- research giant NPD estimates that just 2 percent of all televisions sold in North America were 3-D capable. Rather than consider whether introducing a nonessential technology with minimal available content was a bad idea, Sony CEO Sir Howard Stringer was quoted by USA Today as saying, "No -- you have to launch [it]. It's there. Competitive pressures -- you read in the papers, so-and-so is the first to release 3-D TV. You don't want to be the last."

At this year's CES, with the help of "Green Hornet" stars Seth Rogan and Jay Chou, Sony triumphantly showcased a pair of prototype devices intended to serve as the company's innovation centerpieces. The first was a glasses-free portable 3-D video player suitable for use in the car. The second was a Geordi LaForge-esque "personal 3-D viewing visor" that wags promptly dubbed the "Headman."

Meanwhile, as Douglas Krone, CEO of Dynamism and Gizmine -- sister companies that sell otherwise-unavailable Japanese gadgets to American early adopters -- notes, the home of Sony has become the land of Apple.

"I was at a party last night in central Tokyo that happened to have a bunch of twentysomething guests," he says. "Every time I saw something glowing, it was an iPhone. It was a chilling display of dominance -- five years ago, you would have seen 99.9 percent Japanese handsets and 0.1 percent Nokias and MotoRAZRs. Softbank's flagship stores look almost comical now, with rows and rows of iPhones broken only by the occasional row of iPads, in a space that used to have a wide array of handsets."

The unexpected popularity of the iPhone and iPad in a country hitherto dominated by phones with a far greater array of features and capabilities has taken many pundits by surprise. A 2009 Wired.com Gadget Lab article, "Why Japanese Hate the iPhone," even predicted that the iPhone would be a profound flop, with Japanese consumers seeing the device as outmoded technology offering insufficient support for video and multimedia messaging and a complete lack of standard (for Japan, anyway) features like a built-in TV tuner. It has instead become a game-changing hit -- selling over 5 million units and owning, as of the last quarter of 2010, over 72 percent of the country's rapidly expanding smartphone market.

Apple's successful conquest of Sony's home turf could be seen as the final evidence that the Cupertino company is what Deutschman calls Sony's "spiritual successor." "Under Jobs, Apple has the kind of passion for design and innovation that Sony did in its heyday," he says. "Everything they do is the 'greatest thing we've ever done,' which will 'once again change the world.' And recently, most of the time they've been right."

There have been questions as to whether Apple can continue its stunning run of success in Jobs' absence -- pointing to how the company foundered after its founder was ousted in 1986. The difference between then and now is that Jobs has spent much of the past seven years (yes, it's been that long since Jobs first announced he'd undergone surgery for pancreatic cancer) laying the groundwork for the company's transition -- not merely in terms of succession, which most analysts have focused on, but in its fundamental business model.

The most critical announcements that Apple has made, and has yet to make, relate not to new products, but fundamental extensions of the infrastructure that Jobs has quietly embedded into and around his iconic devices: Seamless cross-device integration; ridiculously simple platforms for downloading, sharing and streaming content; a one-click payment system that currently holds more than 100 million active accounts, each with linked credit card information.

The rumors are rife about Apple's soon-to-come move to the cloud -- which would make its media and application framework both ubiquitous and device-agnostic -- and an even-sooner-to-come addition of wave-to-pay technology to its mobile devices -- which would allow Apple's iTunes accounts to be used to purchase real-world goods as well as digital ones.

If so, Jobs's last act as CEO might well be not just to change the world, but to build a new one, with Apple's technology at its core. That is, if the rumors prove true.

"Who knows?" says Deutschman. "Whatever happens, for the next two or three years, Apple is in terrific shape. It has incredible momentum. And you know -- no one's made money betting against Steve Jobs in a very long time."