I'm pretty sure Japan has FAR more superior phone units than the iPhone. Heck. Most of their phones have Video-talk... wowie. the iphone would be backwards out there.
Odd, everyone I've showed my iPod Touch to has been blown away by its ease of use, features and eye candy. Pretty much everyone (regular people, mind you - not 'tech' people) has said that they will buy the iPhone as soon as it's available here, because Japanese phones are clunky and archaic-looking compared to the iTouch/iPhone.
For example, Japanese phones have high speed internet access, but many are limited to the provider's content portal. The ability to surf the net using Safari just blows their minds. REAL SITES instead of that portal crap they're used to.
Also, Japanese phones are limited to SMS/MMS - no POP/IMAP access. The ability to check your 'real' email account with ease is sorely lacking over here, and the fact that the iPhone can do it is a big plus for a lot of people.
While many Japanese phones now have navi applications, GoogleMaps.app just kills them all in terms of ease of use (not to mention it's actually FUN to use) ...
Music and videos, from your OWN collection? Wow. Many Japanese phones can play music but few (if any) can play MP3s, they all use DRM - which means a buggy PC-only app to re-encode your music, or (usually) downloading stuff OTA for a fee. ie, $3 for a song plus the ridiculous packet data charges.
All of this stuff aside, the iPhone simply blows the competition away when it comes to looks, design, and useability. I think it'll be a HUGE hit over here.