Apple's iPhone could be hit by possible debundling of Japanese phone prices
The Japanese government is reportedly looking to stop local carriers from bundling the cost of smartphones into monthly service fees, in a change that could deliver a particularly hard blow to Apple.
The country's leading carriers typically offer smartphones with little to no initial payment, instead setting up installments attached to monthly service fees in fixed-term contracts, Reuters noted on Tuesday. Combined fees can cost as much as 10,000 yen per month, or about $90.51.
A senior telecommunications ministry source indicated that the government sees these contracts as blurring the cost of phones and service fees, and raising obstacles to people wanting a cellphone.
Apple is likely the biggest beneficiary of the status quo, since iPhones are some of the most expensive smartphones to buy upfront, especially the $999-plus iPhone X. Indeed Japan has been one of the company's most reliable markets, to the point that MM Research Institute says iPhones now represent about half of the country's ongoing smartphone sales.
If people were forced to pay for the cost of an iPhone upfront, some might instead opt for cheaper Android devices.
Apple has already taken flak from Japan's Fair Trade Commission on the issue. The company is said to have forced carriers to offer subsidized iPhones as a way of undercutting competitors on upfront prices, leading those carriers to set up contracts to compensate. Rather than confront the FTC, Apple agree to fix its iPhone agreements and permit unsubsidized iPhones.
The country's leading carriers typically offer smartphones with little to no initial payment, instead setting up installments attached to monthly service fees in fixed-term contracts, Reuters noted on Tuesday. Combined fees can cost as much as 10,000 yen per month, or about $90.51.
A senior telecommunications ministry source indicated that the government sees these contracts as blurring the cost of phones and service fees, and raising obstacles to people wanting a cellphone.
Apple is likely the biggest beneficiary of the status quo, since iPhones are some of the most expensive smartphones to buy upfront, especially the $999-plus iPhone X. Indeed Japan has been one of the company's most reliable markets, to the point that MM Research Institute says iPhones now represent about half of the country's ongoing smartphone sales.
If people were forced to pay for the cost of an iPhone upfront, some might instead opt for cheaper Android devices.
Apple has already taken flak from Japan's Fair Trade Commission on the issue. The company is said to have forced carriers to offer subsidized iPhones as a way of undercutting competitors on upfront prices, leading those carriers to set up contracts to compensate. Rather than confront the FTC, Apple agree to fix its iPhone agreements and permit unsubsidized iPhones.
Comments
Now, at $900 per phone with the option to not always pay for it, it makes sense to displace that cost over more than 24 months. The upgrades just aren’t must have anymore. A little speed here and there won’t significantly change things.
This will be the first time my wife and I have skipped more than one generation since the 3G. Our iPhone 7+s run great. A new battery at the end of the year and good as new.
What kind of logic is that?
the monthly invoice statements are really impossible to figure out.
there are so many fixed charges that are backed out of the monthly charge based on discounts and its a system purposely designed to make it impossible for the user to figure it out.
even the cost of the iPhone itself is detailed, but due to discounts based on a long term contract the cost of the phone itself is "listed" as nothing or very little.
but all japanese customers understand that the cost of the phone is simply being included in the other lines.
softbank is the worst offender of this.
average iPhone user in japan is paying between JPY 6,500 and JPY 9,000 per month (USD 59 to 81 ).
i think the japanese government is correct that this change alone will force the 3 major carriers to reduce costs (there is no such thing as true competition in this industry) and all 3 will reduce advertised rates.
lastly, the article seems to indicate that apple has a 50% market share for smartphones.
i doubt it.
it does of course how its being measured, but there are a lot of older iPhones being used.
i think that apple can count on something like a 30% yearly share for these past few years.
sony is declining. but android is increasing.
We still have bundled deals in the UK but it always works out more expensive than a sim-only plan and buying the phone separately. For those that don't have access to the money up-front or would rather keep that money in a high-interest account; stick it on a 0% credit card and pay it off over the 0% limit (up to 23months at the moment here). For those that can't GET a credit card like that, Apple itself offers 0% monthly payments too. then for those that can't pass credit check on either of those options, you shouldn't really be owning an iPhone X and should be sorting out your finances/priorities.