Hmmm.... In Japan, however, the keitai (cell phone) demand being so strong and so varied (anyone who walks has a cell phone), if the iPhone does find much of a niche, I feel it will be a small one. For example, youths enjoying TV functionality or high quality camera phones or other such niche features already would see the iPhone as interesting but in many ways a downgrade, since it will not do what they are used to doing. Users of simpler phones will see it as complex and flashy and gimmicky, whether or not that is true.
Also, the Japanese text conversion software in the iPhone must be as good or better than that in other phones to be taken seriously. Judging from Apple's less than desirable text conversion in Mac OS X, this is not likely to be found.
My guess is that the iPhone will be more of a Mac fan thing, since though it's great in America, there's a lot more to surviving the cell phone market in Japan than whether or not you can convert the network hardware. That's just the bare necessity. Without a competitive text conversion software, it will be a joke.
