Japan’s consumer electronics giants are struggling. Today’s Sony, for example, bears little resemblance to the industry leader it was in the eighties and nineties. Since February 2014, it’s spun off its television, audio, and video divisions – and sold its PC segment outright.
Increased foreign competition is just one reason for the sector’s rapid decline. Japan’s tech titans have also been accused of moving too slow – with red tape, bureaucracy, and an emphasis on seniority over ability hampering innovation.
Across the sea in China, upstarts like Xiaomi and OnePlus are challenging the status quo by selling high-tech gadgets direct to consumers – at a more reasonable price than established firms. Could a Japanese startup with a similar approach be a nail in the coffin for the country’s embattled consumer electronics companies?
Lightning fast
If UPQ (pronounced “up-Q”) knows anything, it’s how to move fast. The Tokyo-based startup, founded in early June, unveiled 24 products (all but three are consumer electronics) in seven categories at a press conference last week. Ranging from a SIM-free smartphone and GoPro-like action camera to a 50-inch 4K display and a variety of earphones, each item went from idea to production in just two months. And it’s not just a publicity stunt – you can already order everything online.
“We actually had about 100 ideas, but we narrowed it down to 24,” Yuko Nakazawa, UPQ’s founder and CEO, tells Tech in Asia.
Nakazawa’s path to entrepreneurship was an interesting one. She joined Casio as a product planner in 2007, where she worked on the firm’s feature phones, smartphones, and compact cameras.
“Casio had some really unique products, like the G-Shock phone,” Nakazawa says. “I loved doing product planning for these kind of fun, niche products.”
In 2010, Casio and Hitachi’s mobile phone divisions merged with NEC. Unhappy with her new parent company – with design language that favored simple over bold – Nakazawa resigned in 2012. NEC, once Japan’s top feature phone maker, exited the smartphone business a year after Nakazawa’s departure, admitting it was too late to compete with foreign rivals.
Hackathon?
Instead of seeking a job at another electronics company, Nakazawa used her savings to open a cafe in Akihabara.
“I’m not an engineer, so I couldn’t make the kind of gadgets I wanted [to be a product planner for],” Nakazawa says. “But I could open a cafe, and create my own menu. I enjoyed making one-off cakes and giving people something original.”
While walking outside near her cafe last October, Nakazawa came across an advertisement for a hardware hackathon. “I didn’t even know what ‘hackathon’ meant at that time,” Nakazawa says. “So I Googled it.”
As someone who was drawn to the more quirky gadgets during her tenure at Casio, Nakazawa liked the idea of staying up all night to make something completely new and different. Despite not having an engineering or design background, she decided to apply – and was accepted. Her team created an internet-of-things enabled bento (lunch) box called X Ben, which was later invited to join the Japanese Ministry of Economy, Trade, and Industry’s “Frontier Makers” program in December.
Frontier Makers, which is operated like an accelerator, provided the group with JPY 1 million (US$8,000) to produce a consumer-friendly prototype and support for bringing it to market. The program’ goal is to bring niche products from Japan to international consumers, and after graduating in March 2015, Nakazawa’s team showed the device off at the SXSW Interactive trade show in Austin, Texas.
“I planned to go back to the cafe [after Frontier Makers], but I realized that I could make something interesting without a large company,” she says. “I didn’t even know the word startup then, but I knew I wanted to build more products from scratch.”
At SXSW, Nakazawa got acquainted with DMM.make, the Akihabara-headquartered hardware incubator also hosting eye-tracking virtual reality headset Fove and 3D-printed robotic prosthetic Exiii. She also hooked up with another DMM.make startup, Cerevo, known for its smart consumer electronics and smartphone-connected snowboard bindings. After returning from SXSW, she joined Cerevo as a product manager in April.
Take it or leave it
Though Nakazawa founded UPQ as her own company in June, the startup relies on Cerevo for engineering, design, and quality control. Cerevo also shared some of its manufacturing contacts in China, but Nakazawa says she took to Alibaba and other websites to find factories that could deliver products to her exact specifications – and on a tight timeline.
“We deal with suppliers in China, Hong Kong, Taiwan, and South Korea,” she says. “I negotiated with each factory to provide relatively small [first-run] quantities at reasonable prices. I’m a very tough negotiator.”
UPQ’s flagship offering is its A01 smartphone. It features a quad-core chipset, a 4.5-inch display, and runs stock Android 5.1 Lollipop. It’s factory unlocked and supports dual SIM cards – a rarity for phones sold in Japan.
The A01 comes in three color variations.
The A01’s specs might sound underwhelming against an iPhone or the latest Galaxy, but it costs just JPY 14,500 (US$116).
“Smartphones are among the most complicated consumer electronics products, due to the variety of components,” Nakazawa says. “If you can make a smartphone, you can make just about anything.”
UPQ also offers a 50-inch 4K display for JPY 75,000 (US$602), a 14MP full-HD action cam for JPY 15,500 (US$124), a three-axis electronic stabilizer for cameras and smartphones up to 5.5 inches for JPY 37,500 (US$301), and rolling luggage with a built-in battery and charging ports for JPY 29,000 (US$233).
There are also a variety of wired and wireless earphones, Philips Hue-like connected lightbulbs, Bluetooth speakers, and more. Each device is available exclusively in UPQ’s custom “Blue x Green” color. Even its only non-electronic product – a retro “egg chair” straight out of the 1960s – comes with Blue x Green cushions. You can see the full product lineup here.
UPQ items for sale in DMM.make’s online store (prices shown include tax).
“We’ll offer just one color per season,” Nakazawa says. “Even if you only purchase one product, that splash of color will bring life to a plain space.”
She adds that only the colors will change seasonally – for a product like the smartphone, it will be refreshed once a year. If you don’t like the current season’s color? “Too bad,” Nakazawa says. It’s a controversial approach, but the entrepreneur sticks to her guns.
UPQ’s debut line is currently available on DMM.make’s online store. Nakazawa says she’s also in talks with Japan’s ubiquitous big-box electronics retailers so that consumers can “touch and try” each gadget before they buy.
Inspiring the competition
UPQ has already raised an undisclosed amount of funding from investors that Nakazawa declined to name. A source with knowledge of the deal tells Tech in Asia that the amount is just shy of US$1 million.
While Nakazawa has no immediate plans to bring UPQ overseas, all 24 products are FCC and CE certified, and thus can be sold in the US and EU.
When asked if she’s trying to become the Xiaomi of Japan, Nakazawa deflects. “Big Japanese tech companies are in trouble,” she says. “I want to change the way Japanese people approach making new products.”
Nakazawa firmly denies wanting to overthrow Japan’s waning consumer tech giants. It might sound crazy, but she’s more interested in inspiring them than beating them:
“I don’t think of [companies like Sony and Panasonic] as rivals, because no one in Japan is doing what we do. Even if they try to move fast like us, competition is good, because it makes everyone work harder to make better products. I don’t care if they kill my business, as long as they do it better than me.”
For such a peaceful founder, Nakazawa likes moving fast. Her next step?
“Bigger products,” Nakazawa says with a smile. “I’m thinking an electric car.”
P.S. Shameless plug alert! Nakazawa will be speaking at Tech in Asia Tokyo 2015 this September 8 and 9. Get your tickets here. Hope to see you there!
This post She created Japan’s Xiaomi, launching 21 gadgets in 2 months appeared first on Tech in Asia.
