iPhone 3G could flop in Japan

iPhone 3G could flop in Japan

Summary: Apple's insistance on a built-in battery for the iPhone could mean that the device ends up being a flop in Japan.

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Apple's insistance on a built-in battery for the iPhone could mean that the device ends up being a flop in Japan.

According to a survey by iSHARE, 91.0% of Japanese mobile phone users are not planning to purchase Apple Inc's "iPhone" mobile phone.

...

Respondents who said "I prefer replaceable batteries" accounted for 77.1%, while those who said "I don't care if the battery is replaceable or not" made up 22.9%. Of respondents that have replaced a mobile phone battery before, 88.0% said "I prefer replaceable batteries."

Battery might be one issue, but I think that another is simply that the Japanese market is literally flooded with cellphones, and it takes a lot for a new phone from a new player to make a big impact.

Things might change as soon as someone releases a Hello Kitty skinning tool ...

Thoughts?

Topics: Hardware, iPhone, Mobility

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26 comments
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  • 10% marketshare is a flop?

    I'm not sure I agree with that. What I got from the article was that a year ago, 9.6% said they would buy one and 62.2% said they would consider buying one. In other words, 28% of people said they weren't interested in buying one at all. That number has now gone up to 91%. Basically, most who said they would get one a year ago are still going to get one but nearly all the "might buy one" people decided they wouldn't. That fits very well with my theory that the iPhone is really only big with die-hard Apple fans. That doesn't make it a flop (there are millions of people who will buy anything and everything Apple sells) but it does mean that those who put a bit more thought into their purchases have found the iPhone lacking.

    The iPhone is not a flop, not by any measure of the word, but it isn't the raving success that Apple thought it would be. The fact that Apple has lowered the price of one of their products by 50% in 1 year, an unprecedented move by Apple that is known for [b]not[/b] lowering prices, shows that Apple is disappointed with sales. [b]Note the word disappointed does not mean sales are bad[/b], only that they haven't met Apple's expectations. To be honest, this price cut was a great move and should spur those who weren't willing to buy an inferior phone for $400 but would consider it for $200.
    NonZealot
    • As far as that price cut goes

      it IS being subsidized by AT&T, so it's not as if Apple isn't receiving the same amount of revenue per item sold. So I wouldn't read too much into that. If anything, it's a pretty shrewd marketing campaign because the buyer is more likely to make the purchase if they see a lower up front price tag.
      Michael Kelly
      • Good point, one question

        Why didn't Apple [b]start[/b] with a lower, subsidized price from the beginning? This is how every single other phone is sold and to have customers pay the full price up front and then have the cell company pay a monthly fee to the cell phone manufacturer was not a practice anyone else tried. Apple obviously analyzed the common way of selling cell phones and figured they could make more money by pressuring AT&T into the deal it made. The fact that Apple is now going away from that arrangement and into the more traditional arrangement tells me that it simply wasn't working out the way they thought and that they needed to change things. That isn't what Apple does when things are going as expected. Ergo, things weren't going as expected.

        So, is Apple eating 100% of the 50% price cut? No, there is no doubt that AT&T is helping subsidize a portion of that cut. I guarantee that Apple had to eat a large portion of that price cut too though so let's not pretend that this is how Apple planned it from day one and that this is some brilliant tactic only Jobs could have come up with. Apple did the right thing: something wasn't working well and they changed it. Good for them. Hopefully this is a sign of things to come for Apple.
        NonZealot
        • Apple had to eat 100 percent of the price cut

          early on when they initially lowered the price of the unit under the original agreement.

          AT&T on the other hand gave Apple a small percentage of [i]new[/i] customers activating an iPhone, so higher sales expectations that did not materialize was a detriment to both.

          I agree, the only reason I can see for the change was the other business model did not work as originally planed, as they would not be offering the new iPhone under the more traditional deals of the iPhone being subsidized by AT&T if it did.

          I would also imagine that Apple will no longer recieve a percentage of the money for new customer activations.
          GuidingLight
          • THERE IS NO PRICE CUT

            As far as I and many others are concerned, there has been no price cut, the iPhone has gone UP in price due to the increased data plan pricing. I am not one who demands something for nothing but wish Apple and ATT would be much more upfront about this. Marketing is one thing, this is bordering on deceptive.
            nothingness
          • uh, ok.

            you know, total cost of ownership and initial price are very different. when you buy a car, do you consider the cost of insurance or gas part of the purchase price? certainly, it's part of the cost of ownership and should be thought about, but it's not part of the price of the vehicle.
            lostarchitect
  • Several points:

    1: The survey was taken [b]before[/b] the iPhone 3G was
    announced. They may have well have asked "would you
    buy an old cellphone?"
    2: In the US in 2003 (last year I can find figures) there
    were 159,000,000 cell phone subscribers. Apple's sales
    goal was less than 10% of that. Why should 9% of Japan's
    users been seen as a 'flop' when it corresponds fairly
    closely to Apple's stated goals in the US? Japan has about
    100,000,000 cell phone subscribers.
    3: Selling 9% of the phones in the 70+ markets Apple is
    entering adds up to a [b]lot[/b] of iPhones.
    4: "I prefer" is not the same as "I will only..." I prefer to
    use a Mac, but I'll use Windows without a second thought.
    5: Apple's presence is Japan is miniscule to begin with.
    Japanese consumers prefer Japanese brands.
    6: Even Nokia, the largest cell phone manufacturer in the
    world, has only about 10% of the Japanese market. 60% of
    the Japanese cell market is taken by Sharp, Panasonic,
    Sony, Toshiba and NEC.

    Given these facts, the fact that 9% of Japan's cell phone
    users would even consider an iPhone is a good sign for
    Apple.
    msalzberg
    • One comment, not a disagreement

      [i]4: "I prefer" is not the same as "I will only..." I prefer to use a Mac, but I'll use Windows without a second thought.[/i]

      I agree and it was my first thought too. However, don't look at this as a slam against the iPhone and instead look at it as an answer to the following question:
      [i]If there was one thing Apple could change about the iPhone that would increase your desire to buy one, what would it be?[/i]

      The answer, if this survey is accurate, is to make the battery replaceable. This is [b]good[/b] feedback and Apple would do well to listen to it. We've heard several times that few people want to carry around replaceable batteries although no one has put out any numbers to support or refute that statement. I would say this survey refutes that statement, at least for the Japanese market.
      NonZealot
      • Looking at the iShare survey, though..

        23% of the respondents didn't care about the battery. While
        that leaves 77% who do care, it means that the 91% figure
        has to do with a lot more than just the battery.
        msalzberg
        • I'm looking at this in isolation

          [i]While that leaves 77% who do care, it means that the 91% figure has to do with a lot more than just the battery.[/i]

          Yeah, who knows why the 91% responded the way they did? Some because of the battery and some, obviously, for other reasons.

          However, focusing only on the one stat that 77% care about having a replaceable battery, it does mean that those who have stated that no one cares about replaceable batteries and therefor that iPhone sales wouldn't be negatively affected by the lack of a replaceable battery, were wrong... at least in the Japanese market. A large majority of people [b]do[/b] care about replaceable batteries, at least in Japan. I'd be curious to see if that stat was significantly different in North America.
          NonZealot
  • RE: iPhone 3G could flop in Japan

    OK but a 9% would consider is a far cry from them then going into the store and purchasing one too. The Japanese market for cell phones is brutal. Look alikes will be on the market very soon there. Then the IPHONE will no longer be unique.
    redtrain65
  • You think 9 percent of the market is a flop?

    nt
    Bruizer
    • Of course.

      Because the real agenda is that some people are obsessed with a
      replacable battery and simply cannot comprehend that most
      people don't care because the internal battery will last longer
      than they will own the device, and most people do not drain their
      batter in a single day.
      frgough
      • 77% of Japanese people say you are wrong

        or didn't you read the article?

        [i]some people are obsessed with a replacable battery and simply cannot comprehend that most people don't care[/i]
        NonZealot
  • Only 402 people surveyed.

    "This research was conducted in the wake of the announcement by SoftBank Mobile Corp that it will release the iPhone in Japan (See related article). Targeting Internet users aged primarily 20 to 49, iSHARE asked questions about their intention to purchase an iPhone, as well as other questions and received 402 responses over the Internet."

    Come on Adrian, at least show, and maybe comment on, the sample size in your report. I'd hardly call 402 a representative sample of 125 million people. Or maybe you were just looking for some hits.
    A Grain of Salt
    • Actually...

      With a population of 127,000,000 (which is not accurate anyway, as they surveyed internet users between 20 and 49, a group which I am sure is not 100% of the Japanese population...but we'll assume it anyway), a sample size of 402, and a 91% negative answer group, and assuming that the answers are calculated within two standard deviations of the mean (ie, encompassing 95% of the bell curve) the confidence interval for these statistics is only 2.8. Meaning that the actual percentage of people who don't want this phone, or say they don't want this phone, is 88.2% - 93.8%, thus making this study quite accurate, even considering that the population size used in the calculation of the cofidence interval is ridiculously off-base. Furthermore, in order to select a sample from a group of people that large with a 95% confidence level and a confidence interval of 4.9 percentage points, they would have had to select 400 people. 4.9 is a relatively weak confidence level when the results are close. In this case, due to the extremely large gap between answer groups, 4.9 is not weak, and actually, the confidence interval improves as a result of the wide gap.

      It may sound like a small number of people, but when the results are this heavily leaning to one side, the chance of error in the responses are quite slim.

      In simpler words, based on what we know and what we have assumed, you can be 95% sure that between 88 and 94% of the people this population represents are not interested in this device.

      Of course, I'm of the opinion that if they got 9% of the market they should do the happy-dance, as that's an assload of phones sold (11.4 million, assuming that market=population).
      laura.b
      • I won't dispute your analysis..

        since you obviously know a lot more about this than I do.
        There is one thing that kind of undermines, you though. You
        wrote "assuming that the answers are calculated within..."
        What if your assumption is incorrect?

        Just toying with you. I would think that there are standard
        practices, and you seem to know what they are. Always like
        reading your posts.
        msalzberg
        • Thanks!

          I have taken statistics twice....and passed both times. And I hated it both times...but I took a lot away from it. I know...weird, right?

          Actually, my initial degree path was medicine, and you have to take stats for that degree, and when I switched to accounting, I had to take stats for that degree. They couldn't carry over, because one was "medical stats" and one was "business stats." Guess what the difference was? The title of the book. Grr. What a waste of time and money....but it's in the past. :)
          laura.b
  • Japanese go through batteries like crazy

    Adrian, this is a good point which I never though about before.

    It's a common knowledge that Japanese people love their cellphones. As the country that averages more then 1 cellphone per person, they use their phones all day long (and nights). They don't just chat on them. They do all kinds of wonder stuff that we over here don't get (darn those telecoms).

    One particular demographic, the young people, are especially attached to their phones. Thus schools has a "no charging" policy in Japan. It's a long running joke that high school girls hid their batteries Rambo style everywhere in their uniform. If it's a long running joke, it's got to have some truth to it. I wouldn't be suprised that heavy phone users change their batteries at least once a day and carry one or two extras with them. This is important to them.

    Anyways, anyone here that lived in Japan for a long time care to comment?
    willyu
    • Buttery is not so big problem but

      As you know, Japanese uses cellphone all day long. They always do emailing, playing games, using SNS and chatting on them. They may buy an external battery pack. It's a big problem that changing internal battery needs 3 business days and clearing data. However Softbank may offer them substitute when processing. So I think it's not a big problem to avoid iPhone.

      But iPhone have many other problem. Japanese youth cannot use services as same as their friends using. iPhone may not display emoticon that their friends use. Besides, 3G, playing music and GPS are very common. It's very big to use with single hand for Japanese (they always use in trains with single hand). There're too little presence of smartphone in Japanese market. And, is it easy to compose Japanese email?(It can be easy but I don't know)

      Many Japanese have interests in the design and iPhone brand. Safari is very good for user of 'full browser'. Of course, iPhone suits for iTunes and iPod user.

      I consider iPhone 2.0 is for geek in Japanese market. On the other hand, I think iPhone 3.0 or later can change Japanese cellphones.
      Tomgc