Apple’s Japanese puzzle as iPhone sales slow

Japan remains a challenging market for Apple’s media products and services, with news that migrating consumers there from ringtones to a la carte downloads of music has been challenging now matched by reports claiming disappointing iPhone sales in the country.

Market research firm MM Research Institute claims Apple sold about 200, 000 phones in Japan in the first two months since launch, but observes the rate of sale has declined “analysts now widely believe sales are unlikely to reach a total of 500,000 units, half the one million units that they previously thought Apple could sell.”

Apple’s most recent financial results suggest the company is gathering some momentum in Japan, with Mac sales climbing 8 per cent year-on-year, though it’s hard to extract any specific figures for iPod or iPhone sales from the information provided.

Speaking during the financial results call in October, Apple’s chief operating officer, Tim Cook, did let slip a few details, explaining that sales of new range iPods in Japan were up “12 points” according to early marketshare data.

Answering questions from Bear Sterns analyst, Andrew Neff, Cook confirmed continued challenge in Japan: “Andy, it’s fair to say that Japan continues to be our most challenging major market. It is the only market that we – a major market that we’re not growing significantly in.”

Mac sales are doing well, he added, “the overall Mac had its best year-over-year performance in Japan in seven quarters, with units up 14% year over year and that compared to an IDC estimate of the market in Japan contracting an additional 2%. So it’s a tough market,” he said.

CNN reports that slower-than-hoped-for iPhone sales could be due to some technical problems that be-deviled the initial launch. Citing iPhone carrier Softbank’s Chief Strategy Officer Tetsuzo Matsumoto, the report explains, “We introduced the iPhone without any big market trial, so the initial package had some problems.”

No word on what the problems have been, the executive did point out that as new applications ship for the iPhone, the device is becoming a more attractive purchase for Japan’s consumers, but warned the device to be “unlikely to be a mass market blockbuster any time soon in Japan”.

However, despite the confusion and confound, Apple does hold some strong cards as it attempts to broaden its reach in Japan’s lucrative CE market, with ComScore’s recent revelation that 13.6 million Japanese already use iTunes, with 25 per cent of internet users employing the service in August this year.

Can Apple solve its Japanese puzzle?

5 thoughts on “Apple’s Japanese puzzle as iPhone sales slow

  1. Chris in Tokyo

    Yes, I like a lot of other people bought the iphone when it came out here in Japan. Basically, the monthly price is one big reason why its not so called selling well – at the start it was around 8,000 yen or $80 American for a monthly unlimited download plan. That is quite expensive for the 18 to 30 year old consumer base which is driving the market here. The iphone itself was not expensive as you need to buy your phone outright with Softbank.

    Japan is a hard market to crack. Ive been surprised by some of the disinformation that has been spread surrounding some products. Apple has done quite well here but it really needed to put some extra features in the grab the market here.

    those are emocons (like in MSN) are very very popular in Japan. that Would have been a start !!!

  2. mark

    how is that any different than what it is in the US? prices are expensive as hell everywhere, but look at what you’re getting.

  3. Richard

    I think our problem is that we do not listen very well. Japanese people like Chris in Tokyo are telling us the story, but we (exemplified by mark) are not listening.

    The problem might be simpler than we think… We just have to adapt the iPhone to allow Japan’s culture to express itself in it, not try to convince Japanese people to do things our way.

  4. Al

    Yep. It’s pretty simple Softbank and Apple: you’ve priced your product too high in Japan.

    Japan Softbank: 16GB will cost you 8,720 yen per month (£63.36) for 24 months and this doesn’t include the cost of calls to other networks. Phone is included in this price, but amounts to 80,640 yen (£585.81)!

    UK O2: 16GB will only cost you £37.43 (
    5,152 yen) per month for 24 months including 300mins (basic business package). The cost of phone is included in this price, but the phone cost is only £156.59 (21,568 yen)!

    The exchange rate is pretty unfavourable right now, but even so….

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