I would say that the tech needs of folks in Japan, particularly in large cities, varies from that of folks in the US and likely much of Europe. Tech in Japan is much like any other pop culture medium here. People consume electronics for the 'cool' factor more than anything else, and I think more than anyone else. And they also tend to tire of trends relatively quickly. However, the particular needs of consumers differs a bit from western countries.
Essentially, the emphasis is usually on small. This is directly correlated to the ubiquitous usage of public transportation here - the best train system in the world, some believe. People have to carry all their things around while on the train or walking to/from stations. So, smaller and lighter is better. If you compare the Nintendo DS and the Sony PSP, the DS is smaller, though many people feel the PSP has better features. The DS has two screens, though each is smaller than the PSP, and has a stylus for some screen input functions. The PSP has a bigger screen, and you can purchase full length movies to play on it. I'm told the DS has a better series of games on it and a pen input chat function called "PictoChat". The PSP has browser and RSS functions, lacking in the DS. However, in Japan, the DS is kicking the crap out of the PSP in sales. And Nintendo has just released a smaller version of the DS called DS Lite, which is apparently more feature packed, though smaller than its predecessor. You could say each platforms offers something the other doesn't. However, my feeling is that the DS wins here in large part because it is so much smaller than the PSP.
In the US, the PSP is more popular than it is in Japan. (Actually, Xbox is not very popular in Japan, but it's not portable, so...). PSP movies sales are also not strong in Japan, but I wonder if they are very popular anyware. (Update: I just read on SlashDot that UMD movies sales are stagnant, and they'll be discontinued in the US). My guess is that people don't use public transportation as much in the US, so getting the big fattie device is OK. Just chuck it into the back seat of your car!
Apple was not the biggest music player on the block in Japan, until it released the Nano. I'm not saying that iPods weren't selling well here. However, other brands of small flash based players (in aggregate) were selling better a year ago. OK, the shuffle had been released, but frankly most folks here didn't really see the advantage of a flash player with no screen over the multitude of full-featured flash players available here already. However, the nano changed the equation, finally putting the iPod experience in a small and stylish form factor that was previously available, but with the iPod experience.
So, what about computers? Well, Macs have always enjoyed a popular following here, and Apple's resurgence has certainly hit Japan as well. However, where Apple is miserably behind, particularly in Japan, is a truly small laptop. The 12" G4 sold very well in Japan, but smaller, lighter offerings from Sony and Panasonic (among others) have more appeal among many Japanese, particularly women. The 12" G4 weighs 4.6 lbs (2.1 kg). The Sony Vaio TX series weighs 2.76 pounds (1.25 kg) and comes several colors. The Pansonic Toughbook eLite W4 Executive comes in at 2.7 lbs - and also several colors. In Japan Panasonic's "Let's Note Light" comes in at 1kg (2.2 lbs). If you take a peek at virtually all current Windows laptops, their screens are bright, with slick shiny surfaces - much nicer looking, IMHO, than any laptop Mac.
Furthermore, the G4 processor has woefully lagged behind those found in comparable Windows laptops, prompting Apple to move to Intel chips to provide power in smaller form factors. We are to expect smaller, lighter Mac Laptops, but the first Intel Mac laptop, the MacBook Pro, really doesn't go in that direction. And informed speculation suggests that Apple won't make another 12" laptop, likely going to 13" in their next Intel offering (an iBook?). This suggests to me that Apple really isn't interested in making small notebook computers, and I think that spells trouble for longterm Mac sales in the Japanese market.
I often see PDAs used by people in the US in their everyday lives. These are also common in Japan, and I see them used by commuters daily on the train. Lines are blurring between phones and PDAs (though I like mine separate), but the thing is that small light devices are the rule here. I can't help but wonder how Apple would absolutely rule the market in Japan if they released a PDA running something like the MacOS, or even a 1kg notebook computer.
Apple's OS is quite superb compared to WindowsXP and Vista is really nowhere in sight. But this alone won't help Apple in this market place unless they can offer devices in compact sizes that meet or beat the Windoze offerings. I just can't understand why Apple doesn't see this, and address this need. Perhaps flabby laptops are fine for the US and Europe, but they just aren't mainstream here.