Japan is crazy about mobile phones. They are used to pay bills, watch TV, order concert tickets and read comics. The cultural style tends toward complex, funky phones. Even so, there may be a niche for Apple's iPhone in Japan, according to USA Today.

A few in Japan who have seen Apple's iPhone are very excited. "People regard it as cool and advanced. And the interface is easy to use," said freelance journalist Tsutsumu Ishikawa. He flew to Hawaii just to buy one on June 29th, even though he can't use it for calls in Japan.

Despite the enthusiasm by some, there are some serious hurdles facing Apple in Japan.

First, the iPhone isn't yet compatible with the 3G network used in Japan. Next, Japanese customers are accustomed to paying somewhat under US$200 for a smart phone. Also, Japanese customers typically work in small spaces and keep things to themselves. The iPhone's relatively large video screen makes that difficult. Finally, and perhaps the biggest hurdle, is the business connection.

Japan's three top service providers, SoftBank, KDDI and DoCoMo, are in firm control there and have been calling the shots. They make it hard for customers to do anything but work with them, and go so far as to bar customers from some websites and services.

Apple might have more trouble breaking into that culture and calling the shots. Mr. Ishikawa, who covers the telecommunication industry there, thinks Apple may have an "in" with SoftBank. The son of the firm's founder was seen at Macworld 2007 when Steve Jobs announced the iPhone, and Mr. Ishikawa reports that there is a "personal relationship" between the two men.

Another thing that could help Apple is the popularity of the iPod in Japan. That gets Apple out on the right foot with customers. Even so, estimates are that Apple can only expect about 5 percent of the Japanese market, about 2-3 million iPhones per year. That's about US$1.4B annually that Apple will happily take to the bank and try to increase even more down the road.