Saturday's successful launch of a solid-fuel Epsilon rocket was seen as a breakthrough for Japans' space industry, marking the culmination of a host of ideas that could lead to major cost reductions in the future.

The relatively small rocket was developed with an eye on countries planning to build small, low-cost satellites that are increasingly being used for scientific research and observation.

The immediate business prospects for the rocket, however, do not look so bright amid intensifying international competition.