By Michael Fitzpatrick
FORTUNE -- Stung by the country's inability to profit from the smartphone revolution, Japanese ingenuity is betting on doing better with wearable technology. But, somewhat counter-intuitively, is going all-American to do so.
At the country's first wearable technology expo, held recently in the heart of Tokyo, a common thread emerged: The Japanese model of bringing technology to market wasn't working.
Japan has long been a force in making consumer electronics, specifically hardware. But as some of the country's brightest young innovators in attendance at the expo noted, the rules have changed -- and Japan's tech companies and their investors have failed to capitalize on the new order.
"Previously in Japan, only hardware was created here. Now we have to develop hardware, software, and the cloud," said 37-year-old Akinori Takahagi, CEO and co-founder of a startup called Moff that is developing interactive wearable devices. His Kickstarter-funded startup -- now searching for U.S. and not Japanese partners, he emphasized -- will sell the wearable "Moff" smart toy on Kickstarter by July, priced at $49.
"There are very few here who can understand these new rules in Japan," Takahagi said. "So when I wanted to fund and launch my product, I looked to Silicon Valley" -- despite just six month's training in the English language. Takahagi said his compatriots "simply did not get" his idea for the Moff, a wearable wristband that responds to playful gestures, such as air-guitaring with matching audio.
"They would complain Moff was too simple," Takahagi said. In contrast, people praised the toy as "simple genius" when he brought it to the South by Southwest Interactive festival in Austin, Texas. The difference in mindset was startling.
"They felt our uniqueness and originality, describing Moff as 'awesome' and 'cool,'" Takahagi said. "In Japan people were just cool towards it."
After the festival and positive coverage on U.S. tech websites, Takahagi decided to start a U.S.-based Kickstarter campaign to develop and market Moff. Only after a successful Kickstarter drive continued U.S. publicity did Japanese investors step onboard.
Japanese tech investors are far too conservative when it comes to taking a risk on new ideas, Takahagi said.
"There are no such smart formulas here, especially in our big enterprises," he said -- a state of affairs, he added, that is very much holding back Japanese innovation, especially in technology.
Takuro Yoshida is another chief executive of a company that makes wearable technology. His firm, Logbar, makes a "smart ring" that allows gesture-based control over multiple digital functions. When Fortune asked him about the U.S.-Japan divide in terms of support for young tech startups, he responded that his homeland often overlooked talent.
"There is so much more enthusiasm in the [United] States for Ring," Yoshida said. "They react to the fact that it is cool. In the U.S., people like our product and just want to use it. Japanese are more interested in the business model" -- to the point that it prevents experimental products from ever making it to market.
"I have met a lot of VCs and angel investors in Japan, but their thinking is very national -- not international," he said. "They are too domestic-focused, and their minds are passive."
Yoshida said Logbar also plans to launch Ring, which has 5,000 pre-orders already, in July for $180. The product has since accepted some Japanese investment.
Japan can still benefit from a wearable technology revolution, Yoshida said, because the country "still excels at miniaturization" despite higher prices than Asian neighbors China and Taiwan.
But history must not repeat itself, Tokyo-based tech consultant Serkan Toto warned.
"Japanese phonemakers missed out on smartphones because of complacency, extremely inward-looking management, and the long, rich history of the domestic feature phone ecosystem," he said. "It remains to be seen if Japan will get their revenge on America leapfrogging them in the mobile phone market with iOS and Android. But Japan leading the world in wearable tech is definitely wishful thinking, at least at this point."
Japan is about to augment its busiest train route with a super-fast maglev service and is looking sell its tech know-how abroad. A group of investors in the U.S. is interested, but it'll take a lot more than just curiosity (namely, cash, and a whole bunch of it) to get this project going.Feb 6, 2014 11:33 AM ET
How the sources of Apple's revenue shifted between 2010 and 2014.
FORTUNE -- Following up on Wednesday's snapshot of Apple's (AAPL) Q1 revenue by region -- which saw Greater China grow 29% and the Americas shrink 1% -- I've gathered the past four years of a data and summarized them in three charts.
The top graph shows revenue by operating segment (i.e. geographical region plus retail). The bottom shows share of revenue MOREPhilip Elmer-DeWitt - Jan 30, 2014 6:23 AM ET
Japan's tech giants are growing and investing heavily in surveillance tech. The results are the most sophisticated spy and monitoring tools ever conceived.Dec 20, 2013 11:14 AM ET
Japan has a long of history of friendliness towards robots, and it maintains a global lead in R&D on artificial intelligence. This infatuation, though, could have serious drawbacks.Oct 30, 2013 11:34 AM ET
Despite high prices and very different attitudes to bodily functions, high-tech toilets -- or smart loos -- are finding success outside of Japan and even in the U.S.Oct 9, 2013 9:39 AM ET
Despite having one of the hottest summers on record and taking nuclear power stations offline, Japan has had no power rationing or blackouts this year. How did they do it? They cut back.Sep 23, 2013 11:32 AM ET
The country's constitution bans it from having a traditional standing army. But its so-called Self Defense Force is one of the world's most sophisticated armed bodies.
By Michael Fitzpatrick
FORTUNE -- On paper, Japan is a pacifist nation. It ranks 6th on the Global Peace Index, a list tabulated by peace activists at Vision of Humanity. Japan's constitution makes illegal a traditional standing army. But a recently published defense white paper shows MOREAug 5, 2013 10:19 AM ET
Its (false) claim that the Nexus 7 outsold Apple's iPad in Japan is par for the course.
FORTUNE -- Kudos to SlashGear's Chris Burns for declining to take at face value Google's (GOOG) claim, made at the launch of the new version of the Nexus 7 tablet last week, that the original Nexus 7 was more popular in Japan than Apple's (AAPL) iPad.
Burns ran the numbers past IDC -- a research firm MOREPhilip Elmer-DeWitt - Jul 31, 2013 7:13 AM ET
The government says it has made crucial adjustments, but many wonder if enough has really changed.
By Michael Fitzpatrick
FORTUNE -- Teetering along the Pacific Ring of Fire, Japan has long cultivated a nuclear power program despite the obvious dangers.
Now squeezed by energy needs, Japanese leaders say they are ready to embark again on the nuclear route after closing all but two of Japan's 50 nuclear reactors following the massive quake MOREJul 10, 2013 7:06 AM ET
|GM's recalled Cobalt was a failure from the start|
|Michaels hack hit 3 million|
|Why you should pay off your car loan ASAP|
|Americans have fallen in love with real estate once again|
|Walmart offers cheaper money wire service|