A good concept to be familiar with when thinking about what happened with Japan and PCs is the Galapagos effect.
The Galapagos islands, as I'm sure you all know, are where Darwin realized many of the important basics of evolution. Among other things, he drew insight from birds with beaks adapted to eat animals particular to the islands. The Galapagos effect, at its most basic, just means that a unique environment will produce unique species. As a metaphor for socio-cultural phenomenon, however, it has something of a negative connotation. The implication is that the unique species probably won't ever do well outside of its environment, as well as that it has an isolating effect by preventing other species from getting in. When the outsiders do eventually force themselves in, it's also the unique species that typically loses out since it simply doesn't have the numbers to put up a fight.
You can imagine why this gets applied to Japan a lot. In fact, I think "Galapagos effect" is originally a Japanese-coined expression. Japan is geographically, culturally, historically, and linguistically a very unique environment, and it's watched a lot of unique species come and go over the years. One of the most relevant and concerning cases of this is with computers, and our friend the PC-98 is right in the middle of it. If anyone is interested, I'll try to tell that story now.
Japan has long been known as a high-tech country. Japanese people started making great cameras not long after rebuilding from WWII, followed by great cars and consumer electronics. In the hey-day of the 1980s, people around the world assumed that Japan would be a leader in computers, too, but as the 1990s came and everyone and their grandma bought a PC, that surprisingly didn't happen.
Actually, the thing that Japanese people find more frustrating is the success of the iPod and the iPhone in the 2000s. As the birthplace of the Walkman, Japan had all the tech-pedigree it needed to make the dominant portable MP3 player. Smartphones are an even bigger deal, because before the iPhone came around, Japanese cell phones were by far the best in the world. They were so feature-loaded that it was literally embarrassing for foreigners to show their phones to a Japanese person - believe me, I would know. Japanese phones and music players alike should have ruled the world, but they didn't. So what happened?
The old favorite scapegoats of Westerners are a supposed lack of ingenuity and an insular, rigid corporate culture inherent to Japan. I won't pretend these factors don't exist, but I do think a lot of people overlook the Galapagos effect when thinking about why Japan is where it is today.
To understand the situation with computers, let's go back to the very early 1980s.
This is when the first big wave of consumers buying PCs happened in the West. Systems like the Apple II and the Commodore 64 sold by the millions. When you think about what you can do with these simple 8-bit machines, your options are pretty limited: you can learn how to program, you can play games, and you can mess with rudimentary paint and music programs that don't often result in getting much useful work done. Probably most important of all, though, is that you can do word-processing. If you're coming from a typewriter, the backspace key alone makes these PCs well worth the investment, and they weren't even that expensive: for less than $1000 in 2018 money, you could buy a Commodore VIC-20 and a dot-matrix printer, use a TV as a monitor, and start cranking out documents.
If you remember anything at all from this post, remember the fact that this sort of cheap, easy word-processing for the everyman was not available in Japan in those days, and that the reason is the Japanese language. For effective word-processing in Japanese, you need a font with thousands of high-resolution characters that take up huge amounts of memory, you need a high resolution graphics chip and monitor, and you need a sophisticated input system for the user. The word processors that did exist in the 1980s were both expensive and so painfully slow that nobody in their right mind would want to use them unless they absolutely had to. To most of the people who bought them, cheap computers like the MSX were basically gaming consoles that happened to have keyboards attached, and little more.
While things did slowly get better, it wasn't until the mid-90s that the relatively fast input system that everyone uses today came more fully into being. Meanwhile, you can imagine how effectively not having the extremely useful feature of writing their language impacted the Japanese public's thinking about PCs.
On top of this is what's in that research paper about the PC-98. Japan's dominant PC until 1995 was highly expensive, and it ran on an operating system that kept foreign software out and Japanese software in. Is it any wonder that computer culture in Japan at the time was stagnant? About the only thing PCs were really good for outside of an office, again, was playing games.
In the West, it seems like the general public was very quick to embrace the idea that PCs should be our central hub for everything, even long before it was technologically feasible. In Japan, this didn't happen...and there is your iPod and iPhone problem.
You would be amazed at how many Japanese devices from the early 2000s don't even connect to PCs. There are digital camaras that save to SD cards designed to be inserted directly into printers, with no PC compatibility for any component at any stage. I bought a fancy phone in 2005 that had a decent built-in camera and MP3 playback capability, and when I asked the lady at the store for a USB cable to connect it to my PC, she blinked at me and told me there was no such thing. She was right, too; when I looked into it, the only way to get photos out was to email them, and it turned out that the phone was designed to record MP3 from an analogue input.
The iPod embracing the PC for the hub we all wanted it to be was key to its success. And as for the iPhone, I think the key there is that it was designed to be another hub. Japanese cell phones were neat, but they were ultimately a bunch of features loosely strapped together, any one of which could come and go. For those to evolve into smartphones would have many taken years, and their designers would have had to stumble into it almost by accident. Even now, it looks to me like people in Japan adopt PCs with reluctance and not with enthusiasm. They don't even teach kids how to type in most schools.
I've been writing this for too long, so I'm just going to end it. Anyway, take another moment to reflect on the enormous impact that Japan's unique language has had on its modern history. One does have to wonder how all of that will evolve going into the future, as well.