O Entrepreneurs.. phones are not like toasters

Leo Lewis from Tokyo

Whether it's a small startup, a conglomerate, or an investor whose interests intertwine with technology and breakfast, the same important question eventually emerges: Should the company that makes a popular toaster try its luck in the mobile phone industry?
Puzzles like this are a staple of business school lectures. Tiffany & Co. did a good job by adding trinkets to its original collection of stationery items. And Berkshire Hathaway seemed smart when it augmented the textiles with insurance. We revere these stories when they succeed, and are reckless when they fail.
Japan is a major source of such experiences: many of the companies' greatest successes (Toyota, Nintendo, Yamaha) involve just-in-time shifts of focus (from looms, playing cards, and pipers). But, like a gambling addict if he hears the roll of the dice, the country also seems to have a definite feeling about toasters and telephones. “It should be possible for a company to make both products at a globally competitive level,” muttered the voices in the company’s head. “We will repeat the experiment until the outcome changes.”
The principles of this faith grow more and more clearly each time it is tested. Hitachi, Toshiba, Mitsubishi, Panasonic, and Sharp all made toasters and mobile phones simultaneously. All of them somehow remain in the toaster circuit, but have been forced by failure, either completely or largely, out of the global mobile sector.
The latest company to try to snatch the sword out of the rock is Palmoda, a Japanese design-led company that listed in Tokyo a little over a year ago, which came to market with a name based primarily on its truly remarkable toaster oven. It also sells many other simple household appliances, as well as an "adults only" curry sauce. The roaster frenzy means shares are up 88 percent on the first day of trading. The machine is beautiful, and the bread you're toasting is toasted properly. But the Palmoda toaster assured those who paid $225 to join its army of devoted fans that it wasn't just a toaster, just as the Palmoda kettle isn't just an electric kettle. These are examples of Japanese industrial perfection at its finest; An indication of the triumph of the marketing narrative.
If there's one thing Balmoda founder Jane Terao is good at, it's narrative construction: transform himself (he dropped out of school, was a former rock band member), inspired him (touring alone in Spain, Steve Jobs) and the products themselves (trial and error). and tears). Last May, a new story joined the list: Terao has always dreamed of making a mobile phone, which it will do later in 2021.
The resulting device, designed by Palmoda and assembled by Japanese tech giant Kyocera, went on sale in November for 104.8 yen ($919). But this time, applause and encouragement weren't enough. The phone was judged to be too plastic, its processing more complicated than the implied cost, and its price being unjustifiably higher than the iPhone 13 mini. Last week, phone sales were suspended while Balmoda resolved some software issues. The stock is currently 64% below its peak.
Palmoda has now joined some of Japan's greatest industry names to learn that the problem is that phones differ from toasters in a way that is obvious, but also painful to understand.
Both products can undoubtedly benefit from the latest technology and design, but phones primarily require a cutting edge mindset. Balmoda's misstep is in thinking that because it's excellent in design — and modern phones owe so much to design — it can, on its first try, design a phone desirable enough for a $919 price tag. Toshiba, Panasonic, and others have separately discovered that being very good at technology does not guarantee success in this specific field of global consumer technology. In all cases, the stumbling block is the focus on the device rather than the platform and experiences it provides. Sony and Nintendo, whose game consoles are largely designed around their platforms, remain globally competitive thanks to this realization.
For a brief moment, in the years before the iPhone was reshaped the way we used to think about phones, Japan realized all this. NTT Docomo's iMode was a mobile internet platform that carriers and phone makers around the world wanted to license or emulate. When the first iPhone appeared, and everyone was stunned by its impressive design, functionality and touch screen, Japanese phone makers, immersed in the old standards of consumer technology, diverted attention to it and allowed infinite focus - on software and platform design - and drifted behind.

Add a comment