Apple finding it difficult to crack Japanese cell phone market

Posted:
in iPhone edited January 2014
Apple's iPhone, a runaway success in the US and parts of Europe, is struggling to see similar success in Japan, where consumers who've long been privy to some of the world's most advance cell phones are passing over the touchscreen handset for cheaper and more familiar offerings.



After selling about 200,000 units during the first two months, sales of the iPhone 3G have fallen to a third of what they were immediately following launch, according to the Wall Street Journal. Analysts now believe Apple will be hard pressed to sell 500,000 units, a far cry from their 1 million unit predictions earlier in the year.



Part of the problem is that Apple and its exclusive Japanese carrier Softbank are marketing the handset at high prices and touting features such as 3G internet access. While 3G access is relatively new for US customers, the technology has been a staple on Japanese cell phones for years.



The 16GB model is priced at approximately $320 for new customers who sign up for a two-year contract, slightly above the $299 asking price from US carrier AT&T. Softbanks existing 19.5 million subscribers aren't offered the same subsidy, however, and must pay $540 for the same model on top of Internet service fees that scale as high as $60 per month.



Although the carrier has lowered data fees since the launch of the iPhone 3G in July, the vast majority of consumers are still opting for one of the many handsets that are consistently on sale for lower prices, the Journal said.



Another barrier to adoption is that the iPhone lacks features that are familiar to Japanese consumers, such "emoji," a form of clip art that can be inserted in sentences to spruce up email messages. The iPhone also lacks other capabilities found on most Japanese cell phones such as digital television, satellite navigation service, and chips that let owners use their phones as debit cards or train passes.



Apple's App Store, one of the iPhones standout features, has also been largely passed over by Japanese users who are both unfamiliar with its advantages and cautious of making purchases online.



"Japanese users don't know what to do with an iPhone," said Takuro Hiraoka, an analyst for GfK Marketing Services Japan Ltd. "Sales could grow if Apple provides specific examples of how it can be used."



Apple isn't alone in its struggles. The Journal notes that "more than 10 domestic handset manufacturers compete for a slice of Japan's cellphone market," but even the global leader, Nokia, hasn't found a way to garner a 1 percent share. Sharp, based out of Tokyo, is the market leader with a 25 percent share.
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Comments

  • Reply 1 of 155
    Man, I'd love the Japanese market to force Apple to give the iPhone more features and lower pricing.
  • Reply 2 of 155
    boogabooga Posts: 1,073member
    Quote:
    Originally Posted by L255J View Post


    Man, I'd love the Japanese market to force Apple to give the iPhone more features and lower pricing.



    Actually it sounds like Apple needs a team of iPhone developers whose sole job is to make features that Japanese buyers care about but no one else does. Emoji, DoCoMo payments, some sort of dock-port add-on that receives HiDef TV, etc. I suspect the fees aren't actually what's driving the slow adoption so much as the fact that the iPhone can't replace the average "near-free" phone for typical Japanese usage, while it can for most areas of the world.
  • Reply 3 of 155
    How quick people were to judge from this report:



    http://forums.appleinsider.com/showthread.php?t=89972



  • Reply 4 of 155
    Quote:
    Originally Posted by ckipel View Post


    How quick people were to judge from this report:



    http://forums.appleinsider.com/showthread.php?t=89972







    LOL



    What is it? Is it doing good or what?
  • Reply 5 of 155
    Some Japanese analysts are saying it could be as small as 160,000 units. WSJ gets most of it right but there are some missing pieces. In addition to the emoji (which are glyphs that use the Unicode free use area), iPhone does not have the one-seg digital TV reception most handsets have now or the digital wallet function. These are not the biggest drawback however, it is the poor reputation and lousy execution of Softbank.



    The Softbank store experience compared to Docomo and AU is poor, the iPhone 3G phone plan is complex and Softbank has lowered the initial tier price for packet data but if you use 3G data much at all, the price has not changed. Softbank should have come out the door with lower prices but all they are doing is reacting to Docomo price cuts which does not look good in the eyes of most people here.



    Despite all this there is still interest in the device and hope but only if Docomo signs on. I talked with one journalist who said that Docomo has already agreed to sell iPhone but was waiting for the green light from Apple. There is also reports from analysts that if Softbank does not hit their iPhone sales targets, Docomo will be brought online. There are a lot of Docomo users who have said they are interested in iPhone and Apple would easily hit the 1 million mark in Japan if Docomo comes into play. Will be interesting to see how it develops



    JB in Tokyo
  • Reply 6 of 155
    I know this is about iPhone and Japan but here's my recent experience after showing off my iPhone to my niece in Korea.



    First of all, there's no GSM so I couldn't use the phone but they did have Wifi in the apartment so was able to show e-mail and other features.



    She then pulled out her Samsung and showed off the interface. iPhone definitely had better resolution and probably a slicker interface. Samsung had similar size, touch interface and a few more buttons.



    She showed off her pic album which you can reverse/forward pics by flicking the phone. Lot more low res games on the phone. Seems like they incorporated the accelerometer into the phone's basic features which I wish Apple would do with the iPhone.



    I showed how I can play videos with iPhone's iPod feature. She then pulled out an antenna and showed how she can get live satellite broadcasts. In fact, we were watching the same show on her phone that we were watching on TV.



    I said "Oh, wow"



    Quote:
    Originally Posted by AppleInsider View Post


    Apple's iPhone, a runaway success in the US and parts of Europe, is struggling to see similar success in Japan, where consumers who've long been privy to some of the world's most advance cell phones are passing over the touchscreen handset for cheaper and more familiar offerings.



    After selling about 200,000 units during the first two months, sales of the iPhone 3G have fallen to a third of what they were immediately following launch, according to the Wall Street Journal. Analysts now believe Apple will be hard pressed to sell 500,000 units, a far cry from their 1 million unit predictions earlier in the year.



    Part of the problem is that Apple and its exclusive Japanese carrier Softbank are marketing the handset at high prices and touting features such as 3G internet access. While 3G access is relatively new for US customers, the technology has been a staple on Japanese cell phones for years.



    The 16GB model is priced at approximately $320 for new customers who sign up for a two-year contract, slightly above the $299 asking price from US carrier AT&T. Softbanks existing 19.5 million subscribers aren't offered the same subsidy, however, and must pay $540 for the same model on top of Internet service fees that scale as high as $60 per month.



    Although the carrier has lowered data fees since the launch of the iPhone 3G in July, the vast majority of consumers are still opting for one of the many handsets that are consistently on sale for lower prices, the Journal said.



    Another barrier to adoption is that the iPhone lacks features that are familiar to Japanese consumers, such "emoji," a form of clip art that can be inserted in sentences to spruce up email messages. The iPhone also lacks other capabilities found on most Japanese cell phones such as digital television and satellite navigation service.



    Apple's App Store, one of the iPhones standout features, has also been largely passed over by Japanese users who are both unfamiliar with its advantages and cautious of making purchases online.



    "Japanese users don't know what to do with an iPhone," said Takuro Hiraoka, an analyst for GfK Marketing Services Japan Ltd. "Sales could grow if Apple provides specific examples of how it can be used."



    Apple isn't alone in its struggles. The Journal notes that "more than 10 domestic handset manufacturers compete for a slice of Japan's cellphone market," but even the global leader, Nokia, hasn't found a way to garner a 1 percent share. Sharp, based out of Tokyo, is the market leader with a 25 percent share.



  • Reply 7 of 155
    "I showed how I can play videos with iPhone's iPod feature. She then pulled out an antenna and showed how she can get live satellite broadcasts. In fact, we were watching the same show on her phone that we were watching on TV.



    I said "Oh, wow"



    Well thats why the Japanese aren't too impressed with the iPhone. Can't even copy and paste on it.
  • Reply 8 of 155
    Quote:
    Originally Posted by L255J View Post


    Man, I'd love the Japanese market to force Apple to give the iPhone more features and lower pricing.



    How many features can Apple add via software to make it work better in Japan and also help trump the competition elsewhere.



    Quote:
    Originally Posted by ckipel View Post


    How quick people were to judge from this report:



    http://forums.appleinsider.com/showthread.php?t=89972



    Apple has only been in the cell phone for one year, they are fighting some well entrenched players with a very loyal fan base, and they can't offer HW features that many Japanese are used to. I think a half million in that market is quite good. It seems to be a lot better sales that some of the EU countries, like Finland. If Their ~20M user base included 1M iPhnes that would be 5% for a new cell phone in 2 months in an already entrenched smartphone market.



    Quote:
    Originally Posted by slapppy View Post


    "I showed how I can play videos with iPhone's iPod feature. She then pulled out an antenna and showed how she can get live satellite broadcasts. In fact, we were watching the same show on her phone that we were watching on TV.



    I said "Oh, wow"



    Well thats why the Japanese aren't too impressed with the iPhone.



    TV is one of those things that Apple will never join in if the solution is pulling out a terrestrial antenna that I have to position to get a good signal It's all a bit lame; I haven't had to do that since 1981 when my neighbor had cable put in. I'd rather have it sent over 3G or have my videos on the device.
  • Reply 9 of 155
    Quote:
    Originally Posted by AppleInsider View Post


    Softbanks existing 19.5 million subscribers aren't offered the same subsidy, however, and must pay $540 for the same model on top of Internet service fees that scale as high as $60 per month.



    Strange they say that, as my friend was an existing Softbank customer using a Sharp handset, and he successfully upgraded to the iPhone paying the same monthly subsidised cost for the handset as I do as a new customer to Softbank (moved from AU).



    So far I've met two Japanese people using iPhones where I live - one man, one woman - and both are also using their old phones just so they can send and receive messages with emoji. If only Apple could release an emoji plug-in or something...



    As for me, I love my iPhone And I don't miss the 1-seg I never really used. Sometimes I do miss the emoji though, and good battery life.
  • Reply 10 of 155
    "Sharp, based out of Tokyo, is the market leader with a 25 percent share."



    I am sure Sharp is based in Tokyo and that is why it has 25% market share. Apple is based out of Tokyo.
  • Reply 11 of 155
    zunxzunx Posts: 620member
    THIS IS HOW TO BOOST IPHONE SALES:



    Free, free, free iPhones! Free from any carrier or contract plan.



    That easy!
  • Reply 12 of 155
    From studies about the Japanese market show that most people don't actually make common use of the features most bragged about.



    From articles I've been reading the iPhone has high approval among users in Japan. The biggest problem is the cost of the phone and the contrac plan are all far more expensive than normal. The same mistake was made last year in Europe where carriers charged an extreme premium on the iPhone and sales were not very good. Once prices were lowered iPhone sales immidiately increased.
  • Reply 13 of 155
    Sharp? I dont even know they make phones :amazed:



    Personally, if Apple wants to penetrate into the Japanese market they need to know what Asians do and how they communicate. We love those emos.
  • Reply 14 of 155
    Quote:
    Originally Posted by dyp View Post


    She then pulled out her Samsung and showed off the interface. iPhone definitely had better resolution and probably a slicker interface. Samsung had similar size, touch interface and a few more buttons.



    What OS is the phone using?



    Quote:

    She showed off her pic album which you can reverse/forward pics by flicking the phone. Lot more low res games on the phone. Seems like they incorporated the accelerometer into the phone's basic features which I wish Apple would do with the iPhone.



    How does incorporating more of the accelorameter help with the actual usefulness of the phone?



    Game developers on the iPhone have said they don't need to use low rez mobile games. They are able to use console level graphics.



    Quote:

    I showed how I can play videos with iPhone's iPod feature. She then pulled out an antenna and showed how she can get live satellite broadcasts. In fact, we were watching the same show on her phone that we were watching on TV.



    I said "Oh, wow"



    Pulling out an antenna to watch live broadcast does not sound like a desirable feature to me. Downloading and streaming video when you want it is the future. Antennas and broadcast schedules are the past.
  • Reply 15 of 155
    crebcreb Posts: 276member
    Anyone who has dealt with Japan, and who has been to Japan understands why this is the case. I'm sorry, but the Japanese have come to expect quite a bit more from their electronics. The US has always been behind the whiz-bang compared to Japan. Hell, in the nineties I was laughed at when I showed them my then mobilephone?they were so much further than the US back then, and now.
  • Reply 16 of 155
    As an international phone not specifically designed for Japan, maintaining 1/3 of the big initial rush, and selling half a million phones, is kind of a nice problem to have. Even if outsiders predicted even better, making it a "problem."



    Apple's clearly had to prioritize on features, with all their attention going (for much of this year) into the SDK. That has turned out to be amazingly useful, but other features, from copy-and-paste to fill GPS to more Japan-oriented abilities, will follow in time.



    The payment-card chip may have to happen (for now anyway) via 3rd-party case, if it's important. Sounds doable (and useful). Everything else sounds like software to me.
  • Reply 17 of 155
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by Joel Breckinridge View Post


    Some Japanese analysts are saying it could be as small as 160,000 units.



    What methodology do these analysts use to determine the number of sales?



    If SoftBank says they got 215,000 iPhone activations the first month, how is 160k going to be credible?
  • Reply 18 of 155
    I actually think it servers Apple right to get low sales there.



    iPhone might be high tech with US standards. But US ≠ the whole world..



    The iPhone market and the gaming market are the only areas I think Apples is doing something wrong in.

    Other then that, Apple is the future =)
  • Reply 19 of 155
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by TenoBell View Post


    Downloading and streaming video when you want it is the future.



    That would be nice, but Apple as far as I can tell, is not allowing any actual cell bandwidth using media apps except for their own token video app.
  • Reply 20 of 155
    mactelmactel Posts: 1,275member
    Quote:
    Originally Posted by Booga View Post


    Actually it sounds like Apple needs a team of iPhone developers whose sole job is to make features that Japanese buyers care about but no one else does. Emoji, DoCoMo payments, some sort of dock-port add-on that receives HiDef TV, etc. I suspect the fees aren't actually what's driving the slow adoption so much as the fact that the iPhone can't replace the average "near-free" phone for typical Japanese usage, while it can for most areas of the world.



    Yep, you nailed it. I believe a smaller form factor (maybe a flip) is also ideal and desired for the Japanese market.
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