Apple's iPhone sparks Japanese carrier battle, iPhone 5s goes free on contract
Apple's Japanese partner carriers on Friday announced price plans for the latest iPhones, with each provider offering the entry level version of the flagship iPhone 5s for free with a two-year contract, a move seemingly sparked by NTT DoCoMo's agreement to sell the device.
With the announcement that Japan's largest cellular provider NTT DoCoMo would start sales of Apple's iPhone for the first time, the country's three major carriers now have access to the device.
In what looks to be a price war to attract new customers, all three telecoms ? DoCoMo, SoftBank and KDDI ? are offering the iPhone 5s with discounts that effectively make the phone free on contract. As noted by CNET, the special pricing only applies to the 16GB version of the handset.
As with any subsidized device, limitations apply to early upgraders, though the up front fee is still less than what customers in the U.S. have to pay. Interestingly, only KDDI is offering a free version of the cheaper iPhone 5c with a new contract activation or transfer from another carrier.
In addition, DoCoMo is running a promotion to lure existing iPhone users away from rival networks. If an iPhone owner brings in their used SoftBank or KDDI handset, they will receive special bonus "points" that can be applied to a new DoCoMo account, redeemable for other products or repair services.
A report on Friday estimated that 66 percent of former DoCoMo customers left the carrier because it did not sell the iPhone. The statistic is in line with previous statements from the company, which blamed Apple's handset for ongoing net losses in subscribership.
Since the first iPhone was released in 2007, DoCoMo has been unwilling to carry the phone as Apple does not allow carriers to preinstall apps or brand the device with their logo. The telecom was still holding out as late as July, when CEO Kaoru Kato said his company was in no rush to ink a deal due to Apple's strict requirements.
Aside from customers leaving DoCoMo's network, local corporations have also been negatively impacted by the iPhone. Big name companies that sold Japan-only handsets through, including Panasonic and NEC, recently exited the sector after months of declining in sales.
It remains to be seen what effect the iPhone will ultimately have on Japan's smartphone ecosystem, which was previously dominated by domestic products, but subscriber statistics appear to show Apple's handset quickly gobbling up market share.
Some industry watchers believe Apple stands to gain some 35 million additional iPhone sales in 2014 as a result of new deals with DoCoMo and China Mobile. The latter has yet to announce a partnership with Apple, though both the iPhone 5c and 5s were granted a network license from the Chinese government earlier this week, allowing it to operate on the unique TD-LTE bands used by the world's largest cellular provider.
With the announcement that Japan's largest cellular provider NTT DoCoMo would start sales of Apple's iPhone for the first time, the country's three major carriers now have access to the device.
In what looks to be a price war to attract new customers, all three telecoms ? DoCoMo, SoftBank and KDDI ? are offering the iPhone 5s with discounts that effectively make the phone free on contract. As noted by CNET, the special pricing only applies to the 16GB version of the handset.
As with any subsidized device, limitations apply to early upgraders, though the up front fee is still less than what customers in the U.S. have to pay. Interestingly, only KDDI is offering a free version of the cheaper iPhone 5c with a new contract activation or transfer from another carrier.
In addition, DoCoMo is running a promotion to lure existing iPhone users away from rival networks. If an iPhone owner brings in their used SoftBank or KDDI handset, they will receive special bonus "points" that can be applied to a new DoCoMo account, redeemable for other products or repair services.
A report on Friday estimated that 66 percent of former DoCoMo customers left the carrier because it did not sell the iPhone. The statistic is in line with previous statements from the company, which blamed Apple's handset for ongoing net losses in subscribership.
Since the first iPhone was released in 2007, DoCoMo has been unwilling to carry the phone as Apple does not allow carriers to preinstall apps or brand the device with their logo. The telecom was still holding out as late as July, when CEO Kaoru Kato said his company was in no rush to ink a deal due to Apple's strict requirements.
Aside from customers leaving DoCoMo's network, local corporations have also been negatively impacted by the iPhone. Big name companies that sold Japan-only handsets through, including Panasonic and NEC, recently exited the sector after months of declining in sales.
It remains to be seen what effect the iPhone will ultimately have on Japan's smartphone ecosystem, which was previously dominated by domestic products, but subscriber statistics appear to show Apple's handset quickly gobbling up market share.
Some industry watchers believe Apple stands to gain some 35 million additional iPhone sales in 2014 as a result of new deals with DoCoMo and China Mobile. The latter has yet to announce a partnership with Apple, though both the iPhone 5c and 5s were granted a network license from the Chinese government earlier this week, allowing it to operate on the unique TD-LTE bands used by the world's largest cellular provider.
Comments
Last year when I upgraded to the iPhone 5, the 16gb model was available free, an extra $120ish for the 32gb model, an extra $120ish on top of that for the 64gb model.
That's with SoftBank, but AU was the same when they started offering the iPhone as well starting with the 4s.
It's almost as if Apple knew the carriers would do this...
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You may be on to something... Anyway, this news will only cause Apple's stock to plummet...!
SoftBank charges about $70 a month in base fees to use an iPhone in Japan. 70 x 12 = $840 annually, or $4200 over 5 years. Yes, you need to think long term because it's not like you are only going to use your iOS phone for only 2 years and then quit! You're hooked forever, unless you go back to Stupid Phones. But who does that?
It's a sad fact that the media continues to refuse to bash the carriers for exorbitant monthly fees while at the same time Apple gets bashed for not coming out with a cheap enough phone. It's totally stupid and outrageous. Almost as outrageous as the fact that smartphone users themselves haven't yet revolted against the wireless carriers on this issue. Outrageous!
(I'm a Mac lover since 1984 and WiFi iPad lover since the iPad3, but I refuse to get an iPhone or any smartphone due to the wireless carrier fees. When those fees come down to $10 or $15 per month and give me always on internet, then they will have hooked me.)
Boom baby! These will fly off the shelves.
This is proof that iPhones are very inexpensive when sold on contract to customers who are ready to make use of Apple's ecosystem.
They get their money's worth via free iOS updates and the ecosystem as a whole.
I bet this will happen in the States as well. It has already happened in the States with the 5c.
When those fees come down to $10 or $15 per month and give me always on internet, then they will have hooked me.)
How much do you pay a month for cellular service? I have a "bring your own" iPhone on tmobile's pay as you go. $30/month for unlimited text/data and 100 minutes.
I haven't seen a $10/$15/month plan for unlimited data for any device, though I've seen one for $25.
"Since the first iPhone was released in 2007, DoCoMo has been unwilling to carry the phone as Apple does not allow carriers to preinstall apps or brand the device with their logo."
This is really sad because history shows that user interface suffers significantly when their companies install apps with their logos. Why companies STILL do that with Windoze and mobile devices is a mystery. It worsens their user experience and they wonder why they cannot get them as popular as Apple products.
SoftBank charges about $70 a month in base fees to use an iPhone in Japan. 70 x 12 = $840 annually, or $4200 over 5 years. Yes, you need to think long term because it's not like you are only going to use your iOS phone for only 2 years and then quit! You're hooked forever, unless you go back to Stupid Phones. But who does that?
I've no idea what the contract situation in Japan is, but in the UK and other parts of Europe, once your contract is up you can change your plan to a SIM only deal, where the cost of the phone isn't incorporated into the monthly rate, so you get much lower bills. A SIM-only contract will regularly come out at less than half the cost of the contract you get with an iPhone for equivalent service.
Or you can go Pay As You Go too.
In any case, now you own the phone and can use it on a different contract, or another carrier entirely, or sell it and sign up for a new contract with the latest and greatest handset.
So you're not hooked on the same rate forever.
I know, that's why I just buy it outright from Apple (€899) and get a cheap SIM only crap deal. €10 for call/text and something like €3 for 200MB/m
I have a theory that Apple is the only foreign OS, computer company that places high importance on the Japan market, because of niceties like excellent language input, much better font selection for Japanese, a Japanese dictionary (OSX and iOS). Android definitely don't have a good font selection, I don't think Google sees the value in that, even its default Roboto is a rip off (of Helvetica and various fonts), Google definitely is not footing the bill for fonts. As for Windows, as far as I know, you get only a serif and a san-serif Japanese font (correct me if I'm wrong please, since I only have Windows XP experience on this). I think this goes a long way if that's the main language you use on the OS, imagine if your OS's English font selection is just Arial and Times, and seriously I love that dictionary on OSX and iOS.
Aside from that, probably Apple style aesthetic, clean lines, simplicity, delightfulness, appeals to the Japanese. (I feel like an idiot writing that, since I'm totally guessing, ditto the font/language theory
).
And aside from that, its a cool phone with a great ecosystem. This goes without saying ... feel like an idiot stating the obvious too.
This is interesting...
An article about "unscrupulous journalism" written by:
@Prince McLean AKA @Daniel Eran Dilger AKA @DED
In a post written by:
@Corrections AKA @Daniel Eran Dilger AKA @DED
to an article written by:
@Mickey Campbell AKA @Daniel Eran Dilger AKA @DED
---I believe we have a trifecta!
• If all the carriers are pressured by competition to discount the MSRP of an entry iPhone model from $99 to $0 under contract -- doesn't the "street" price of the entry iPhone model become $0?
• If the price of the iPhone is the same for all carriers, won't the carriers have to compete on the quality and extent of their services?
• Could one of the services that a carrier offers, to differentiate itself, be: no or low interest financing of the iPhone?
• Would the financing contract of the iPhone, necessarily, be tied to a services contract?
• If not, wouldn't the carriers become more competitive and flexible with their services offerings?
• Instead of contracts with "activation" fees and "early termination" fees might we see no contracts and "loyalty" incentives offered by the carriers?
• If the "street" price of the latest/greatest entry iPhone model is $0 what is the "street" price of competitive smart phones?
• Is this a good thing for the consumer?
• Is this a good thing for the carriers?
• Is this a good thing for the smart phone manufacturers?
• Is this a good thing for Apple?
The best deal I have obtained here in DK is 13$/mth for 3Gb data, 2 h talk, but SMS at 4c each (luckily most of my testing is iMessage)
That's not gonna happen. Operating, building, and maintaining a cellular network takes a huge capital expenditure, and the carriers are also in the business of making a profit. Anyone in the market for a smartphone has already decided on taking on the ongoing costs, then all they need is to choose a phone. If the monthly bill is going to be the same with a free phone or a $199 one then many will choose the free one.
Why not just but an unlocked iPhone then? That's what I do. I use the web on wifi only and everywhere I travel too has wifi.
On what carrier and what country? The carriers in the US require a data plan for smartphones.
I wouldn't want that as that would be a sign of Apple's weakness.
Any news on this topic?