Apple finds iPhone success in Japan

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Japan has emerged as Apple’s fastest-growing region for the iPhone in the past two years, outpacing its home market and even Greater China and rest of Asia. Japan is a rather unique market for Apple, home to Apple’s biggest profit margins and the only one of five regions where Apple’s operating profit grew in the past fiscal year.

Two factors in the iPhone’s Japanese success are Japan’s wealth, despite two decades of economic turmoil, an ageing population and protection of domestic firms; and a postpaid market where phones are heavily subsidised by telcos. Japanese consumers also have a bias towards Korean brands and therefore a big smartphone brand like Samsung has relatively small presence.

According to data from Strategy Analytics, Japan was the world’s fourth-largest smartphone market in Q1 2013, behind China, the US and India.

NTT DoCoMo’s entry into the iPhone market for the first time, Japan’s largest telco, opens the gates to 61.8 million of its customers. KDDI Corp and SoftBank Corp, Japan’s second- and third-largest carriers also compete to win over iPhone customers with iPhone discounts and multi-year contracts.

Prior to NTT DoCoMo’s entry, the iPhone was already Japan’s best-selling smartphone with 37% marketshare in six months ended 30 September 2013. That’s a fraction bigger than Apple’s US share in Q3 2013.

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Apple’s sales in Japan grew 27% to US$13.5 billion in the fiscal year ended 28 September, with operating profit margins exceeding 50%, compared to 35% in the rest of the world.

With Apple finding surprise success in Japan, can the Cupertino strike gold in other markets like Greater China?

Read full story at WSJ | Image credit: Tokyo Times

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