The Galapagos Effect: How Japan Sometimes Ends Up Standing Alone

Regular readers have seen me take swings at Japanese business culture for its love of antiquated technologies like fax machines and Internet Explorer. And that’s a little unfair. Japan has contributed, and continues to contribute, many wonderful innovations to the world in a variety of fields.

Unfortunately, sometimes Japan’s good ideas have trouble escaping Japan.

The Garakei

Exhibit A: The Garakei. “Garekei” (ガラケー) is derived from ガラパゴス携帯電話, or “Galapagos cell phone”. It refers to the cell phones produced in Japan from around the 2000s until the peak of the smartphone era in the 2010s.

Garakei had some awesome features. Many sported a digital, contactless wallet. Hell, you could watch television on the damn things – quite an innovation in the day of 3G bandwidth.

But the Garakei phenomenon also told a story about a Japan that is sometimes so fixated on its own market that it finds itself standing apart from the rest of the world.

To understand this phenomenon, we have to understand the gara in Garakei. It’s time to look at The Galapagos Effect – and why it bugs the living hell out of many in Japan’s business world.

The Galapagos-ification of Japan

The Galapagos are an archipelago of volcanic islands in the Pacific Ocean. They’re famous for their extreme isolation: the closest country is Ecuador, to which the islands belong, some 926km away.

They’re also famous, of course, as the location where Charles Darwin hit upon the ideas that led to the foundational work on evolution, On the Origin of Species. Darwin noticed how the animals on the islands, while roughly similar, were all perfectly adapted to their specific environments.

That makes for a powerful metaphor. And sometime in the 2000s, people in the business and tech worlds in Japan started using ガラパゴス化 (garapagosu-ka) , “the Galapagos Effect”, to refer to how Japanese technology sometimes – often unintentionally – finds itself out of step with the world.

The origins of ガラパゴス化 are misty. But the first recorded appearance is in 2004 by Sado Shuji (佐渡 秀治), then the head of marketing for VA Linux Systems Japan. A subsequent series of working group results and research papers resulted in the term spreading through various fields, including mobile technology.

The Nomura Research Institute summarized the Galapagos Effect as follows:

1. There exists in Japan a market of goods and services that caters to the special needs or wishes of the Japanese consumer
2. There is a market abroad of goods and services with different qualities and features than exists in Japan
3. As Japan continues to develop its products independently, the solution used outside of Japan becomes a de facto standard.
4. Before Japan notices, it finds itself out of sync with what the rest of the world is using.

Note that “out of sync” doesn’t mean “inferior”. In many cases, the technologies developed in Japan exceed the capabilities of those used overseas.

But, as we’ll soon see, that technological excellence can be a double-edged sword.

The case of Felica, the Galapagos IC chip

Let’s look at some examples. And let’s start with one that, if you live and work in Japan, you are likely holding in your pocket as we speak.

I’m talking about the Felica chip. It’s the contactless RFID IC (Integrated Chip) technology that powers your Suica or Pasmo card for your train commute. It also powers Ion’s WAON card, the nanaco card from 7&i Holdings, and others. It’s used daily by millions across Japan for contactless payments at the train station, convenience stores, supermarkets, and restaurants.

Felica found its first application in Hong Kong’s Octopus Card in 1997. Octopus is still used to this day, 25 years later.

However, Felica’s worldwide adoption stopped at around 20% of contactless IC card usage. Internationally, the technology lost out to the NFC Type A/B standard used by Mastercard and Visa.

Felica was packed with features – too many features, it turns out, for many applications. And many outside of Japan found the cost of implementing Felica terminals much too high.

Felica’s complexity also proved a major hurdle when JR East, the rail company that issues the Suica card, and Apple wanted to onboard Suica to the iPhone. The integration finally happened in 2016. (If you’ve never used it, you should – it’s amazing.)

Today, Felica is seeing more widespread usage throughout Asia, particularly in Malaysia and Indonesia. Sony has slowly managed to champion its expertise in IC and the success of Felica in Japan and Hong Kong into a successful business strategy.

A short history of “Garakei”

This brings us next to the Garakei. Or, as I’m sure it’d love to be called, the “feature phone”.

But not just the Garakei. Because there are two other only-in-Japan phone types that deserve some love, too.

The feature phone got its start in the 2000s – and it started because Japan was ahead of the global curve. NTT Docomo in Japan was the first company to launch a 3G network, which they marketed as FOMA[3].

Due to various technical hurdles, worldwide 3G adoption was slow. But around the same time, the Internet exploded into public consciousness. That accelerated the implementation of 3G. And it was the impetus that lead to various Japanese companies, including NTT, investing in Internet-enabled phones.

But the budding Japanese mobile market differed from foreign markets in a number of respects. First, unlike many US and European countries, the Japanese government doesn’t sell its digital wavelengths. Instead, it lends these wavelengths free of charge to cell companies. So, instead of wasting millions bidding for spectrum, Japanese carriers could invest that money in better hardware and software instead.

However, on the negative side, Japan had far fewer consumer protections for cell phone users than other countries. Companies weren’t obligated to offer number portability or SIM unlocking services. (SIM is Subscriber Identity Module, the chip that identifies a phone as belonging to a particular user and carrier. A SIM-unlocked phone can be used, theoretically, with any cell phone carrier.)

A bunch of incompatible keitais

All of this meant that Japanese cell companies had an incentive to encourage lock-in. And encourage it they did. Phones carried their own specialized operating systems with customizations specific to each provider. Phone providers built their own IP-over-cell services for Internet access, such as NTT Docomos’ iMode, and associated services, such as iMode Mail.

One popular feature of Garakei was a contactless digital wallet. Dubbed おサイフケータイ (osaifu keitai), or “wallet phone”, it worked thanks to a contactless IC card built into the device.

Yep, you guessed it: the osaifu keitai used Felica chips!

1seg

Another feature specific to Japan solved a problem as old as television: How do you watch TV away from your TV?

Today, the solution’s obvious – just use a smartphone app. But in the pre-4G age, bandwidth was at a premium.

So Japan’s cell phone companies and TV stations banded together to create 1Segment or 1Seg (ワンセグ). 1Seg was a standard for transmitting Quarter Video Graphics Array video streams (around 320 pixels by 240 pixels in size) via UHF. A typical HDTV broadcast signal is comprised of 12 “segments”; 1Seg only uses a single segment – hence the name. The service was free, meaning anyone with a 1Seg-capable phone could tune in to local and national programming.

1Seg took off in popularity in large part due to the Great Tohoku Earthquake of 2011. The mobile devices were a critical source of information for residents displaced by the quake and devastating tsunami. Many universities and airports took advantage of 1Seg to broadcast local signals available only within a limited area.

Eventually, 1Seg died along with many of the features of the Garakei and downstream devices. 1Seg never caught on outside of Japan. With the birth of 4G, the need to broadcast a low-bandwidth television signal vanished. And smartphones gave consumers far more cell phone real estate than they ever imagined possible.

The Garasma, Garaho, and the iPhone-ification of Japan

Japan wouldn’t remain a Garakei Paradise forever. As the smartphone age dawned, Japan-specific solutions at first came in their wake. “Garapagaos smartphones” (ガラホ) followed the same pattern of Garakei phones, sporting support for Osaifu Keitai, 1seg, and other features.

To make things even more confusing, there was the Garasma (ガラスマ; garasuma), also a “Galapagos Smartphone”. The difference is that, with Garaho were smartphones with Garakei functions like 1seg, Garasma were functionally Garakei that contained a paired-down set of smartphone features.

In January 2007, Apple revolutionized the cell phone market with the introduction of the iPhone. The first iPhone only supported the GSM standard for cellular networks. Since no one in Japan supported GSM, its impact in the local market was nonexistent.

But then the iPhone 3G launched and everything changed. Softbank began selling a (SIM-locked) version of the iPhone in 2008. In 2008, Google’s Android mobile operating system hit the scene, with Docomo releasing Japan’s first Android-powered phone in 2009.

The advent in Japan of cell phone hardware (like the iPhone) unmoored from the big three cellular providers spurred a demand away from provider-specific Garakei phones. By 2010, smartphones represented 22.7% of Japan’s cellular market. By 2019, they dominated the market at 89.7%.

Thanks to its swift action adopting “Garakei”-like features into the iPhone (such as support for Felica), Apple today rules Japan’s smartphone market, holding a 64.8% share.

What’s wrong with Galapagos? It’s a lovely place

Reading through some of the technologies developed, you may ask: is the Galapagos Effect necessarily a bad thing? While services such as 1Seg have joined Google Glass in The Big IT Graveyard in the Sky, there’s no question they served a purpose for their time.

But there are both technological and business downsides to the Galapagos Effect.

Remember how I mentioned above that the origin of ガラパゴス化 can be traced back to open source proponent Sado Shuji. Sado wrote about the term and its origins on his blog.

Sado says he never remembers intending the “Galapagos Effect” to mean that Japan’s technology evolved independently of that developed abroad. Rather, he used it to refer to Japan as an “Open Source Galapagos”. He lamented the language gap that kept Japanese developers from interacting more with the larger open source community. Further, he more or less blasted his country for using a ton of open source while producing little of its own:

“We have ‘always patching’ [software bugs] syndrome. Lots of people using, few creating. Lots of user groups with little relation to developer groups….Do we only want open source to reduce costs?” (For the record, Sado says he’s “shocked” by his choice of words at the time.)

Sado, in other words, was calling Japan a literal Galapagos: an island nation separated from the mainstream, not by an ocean, but by language and a lack of innovation. He called for Japan to “globalize” and become an active member of the global open-source software community.

Escape from Galapagos

Of course, words sometimes grow beyond the control of their author. And so with the Galapagos Effect, which has become more of a metaphor for creating spectacular features that the world doesn’t want.

This attitude comes out in a 2014 article from Nikkei about the “unmanned economy” – service robots, self-checkout, self-driving cars, etc. The article focuses on robotics developers who are, in their words, trying to avoid the pitfall of failing to distinguish between “technology that sells” and “technology that’s awesome.”

In other words, developers don’t want to miss out on market opportunities – particularly in international markets – by focusing on technology for technology’s sake.

According to Google Trends, ガラパゴス化 as a phrase peaked in awareness around 2010 and remained a hot topic through 2013. Its popularity has dropped since then. However, a quick news search shows the term is still in regular use in fields as diverse as Robotic Process Automation and education.

It’s natural that every market will have technology and solutions that are specific to the needs of its populace. However, as both the Garakei and open source examples prove, there’s a danger in becoming so specialized that you sever the open flow of ideas across borders.

Fortunately, many in Japan today seem determined that the nation not become a technological island unto itself.

Sources

ガラパゴス化. Wikipedia JP

ガラパゴスの象徴「フェリカ」、iPhone標準搭載で世界進出に芽. Newswitch

A Concise History of The 3G Technology. Intraway

ガラパゴススマートフォン. Wikipedia JP

ワンセグ. Wikipedia JP

【2022年6月】日本とグローバルのスマホOSシェア｜iPhoneとAndroidの比較を中心にご紹介. Shift Asia

すごい技術より売れる技術　ガラパゴス化避ける.

いわゆるガラパゴス化という言葉の起源. ShujiSado.com

すごい技術より売れる技術　ガラパゴス化避ける. Nikkei