The Japanese market is significantly different than the American in several ways that make perfect sense once you understand the underlying drivers. Subnotebooks are a classic case.
-- Printed Japanese cannot be touched typed. Ergo, a full-sized, ergonomically correct, touch-type-able keyboard is, at best, a neutral feature in the Japanese market.
-- The average Japanese clerical desk is (I believe) 18" deep. Ergo, a laptop is a more desirable computer than a conventional three-piece suit desktop PC for many applications because it requires less desktop real estate to operate and it takes up NO desktop real estate when not in use. (It goes into a drawer, after all.)
By the same reasoning, the smaller and lighter the laptop, the more desirable it is.
Combine the need for small size, low mass, good graphics displays, and no great need for US-grade keyboards and you get a Toshiba Libretto, Sony Vaio, and a whole horde of 6" by 9" (B-class) subnotebooks, many with touch-sensitive screens.
Similarly, since many Japanese-market laptops are sold for desktop use, battery life is really of secondary interest.
Send those products to the US and the reviewers will rant and rave about the atrocious keyboards and under-two-hour battery life and ignore the fast processors, clear screens and light weight.
Apple notebook buyers rave about the iBook for its aesthetics, quality keyboard and long battery life. None of which have is a plus when compared to a similarly priced b-sized notebook. The weight alone is three times greater folks!
When was the last time Apple marketed a computer with a touch screen? How about a full-function computer without a keyboard? (No PDAs need apply.)
There are literally dozens of such products on sale in Asia. And every person who needs one need not look at Apple. To them, Apple is irrelevant.
Now, once you remove all these systems from the accounting, Apple does okay, percentage-wise. But only because it's not counting an enormous part of the market it can't even compete for. The simple fact is -- Apple is a niche player in Japan just at it is a niche player in the US.
Steve Jobs' strategy is to maximize his company's strengths as much as possible to expand outside its core markets as much as possible, but he has limited resources at his disposal. No amount of "thinking different" can make up for the hordes of local designers working to differentiate their PC-based products and optimize them for their local markets.
This is vital because, once in a while, one of those local designs explodes and creates a whole new market as big or bigger than Apple's whole business, as the Vaio PCG-505 series did. Three years ago nobody sold anything like the 2.75-pound purple Sony's in the US. Now everybody does, except Apple.
Localization means optimization for other markets. Optimization means diversity of features. Diversity means evolution as those features feed back to the core product line. Without evolution, a platform will wither and die.
To rescue Apple from the abyss, Steve Jobs had to focus on its core business. To make it truly competitive with PCs and ensure its long-term survival, he has had to start looking at markets other than his core or Apple risks becoming irrelevant to all buyers.
Felix Torres is a Chemical Engineer by training and inclination, an Aerospace Researcher by trade, and a liaison between end-user organizations and the local IT department by accident. Felix's first computer was a home-built analog for the science fair. Curiosity and professional need have led him on a path through punch cards, Teletype terminals, 8080 assembly language, and personal computers since they were known as microcomputers. Felix's big mouth is currently annoying IT personnel at a government research facility in Cleveland, Ohio.