I used to change my handset every year because half year old models (new models come out twice a year) used to only cost about 3000 yen when bought online (and the battery life of the phones would seriously start to suck before even using it for a year). I’ve now switched over to PHS because it’s cheaper and can also be used as a mobile modem, but am now considering the iPhone as well…
Threat to smaller Japan handset groups
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Previously, the handset was cheap or free, and paid for by a high monthly subscription.
As a result, older users, who tended to keep their handset even after the end of the contract period, subsidised students who got a handset every two years.
But now those older users simply continue on their Y980 tariff after the price of the handset is paid off, and younger users, faced with the true cost of a new phone, are not upgrading as often. The average life of a Japanese handset has gone from two years and seven months to more than three years.
The resulting fall in handset sales hurts even more because the industry is so fragmented. Only the biggest player, Sharp, has a market share of more than 20 per cent according to IDC Japan, and only Panasonic, Fujitsu and NEC have more than 10 per cent.
The rest of the market is shared between Toshiba, Sony Ericsson, Kyocera, Casio Hitachi, LG, Nokia and several smaller manufacturers – not least Apple, with the Japanese launch of the iPhone.
Profits at all of these companies are under intense pressure and one likely result is consolidation.
Japan, Hockey, Baseball, etc. 