Apple's initial success with the iPod in Japan bodes well for the company in this difficult market, but Sony may not be as lucky getting its foot in the door, according to a Bloomberg report.

Advance orders in Japan made Apple's iPod mini the top-selling portable player three weeks before its July 24 release. AT Kearney media consultant David Marra told Bloomberg: "About 40 per cent of the 1.5 million digital music players sold in Japan this year will come from Apple."

Sony may suffer because it was late joining the digital music player market when it launched its hard drive based Walkman in July – three years after Apple launched the iPod.

Swissca Portfolio Management's Alexander Shalash said: "Sony was the pioneer with the Walkman, but this time they're late. There are no alternatives to the iPod right now.''

Sony Chief Financial Officer Katsumi Ihara told Bloomberg in September: "Our personal audio business isn't performing to our expectations – partly because of iPod, which has become a fashion. We must avoid having Apple take over our image in the personal audio category. We must fight back."


Analysts are concerned about Sony's future in the market. Fukoku Mutual Life Insurance fund manager Yuuki Sakurai said: "Sony's opinion of how important they were in the portable audio market was an illusion."

According to Sakurai, Fukoku Mutual has trimmed its Sony holdings because: "There have been some discussions in our company about whether Sony will be able to rebuild profitability in their consumer electronics business. There are doubts.'"

Similarly, RCM Japan equity manager Masanao Yoshitake said: "Sony's sales still aren't so strong for its digital products. We haven't considered buying the shares again because of the lack of profitability of their consumer electronics business.''

In tune

Sony is also likely to have some catching up to do with regards to online music sales in Japan. Akiyasu Matsuyama, a spokesman for Avex Group Holdings, Japan's largest publicly traded recording company, based in Tokyo said: "The Japanese know about iTunes. Sony's Walkman changed how people listened to music. If the iPod has the same impact, we will have to adjust.''

However, Apple may not be as fortunate in increasing its market share in Japan. According to Sakurai of Fukoku Mutual: "When it comes to computers, Apple is not penetrating the Japanese market. Japanese manufacturers do better because of their understanding of Japanese characters.''

Play on

The report points out that Sony's first portable PlayStation console will go on sale on December 12. The new PlayStation has a wireless connection and plays movies and music – some industry watchers are suggesting this could prove to be real completion to Apple's dominance with the iPod, in all world markets.