Wednesday, February 18, 2015

Flip-phone Shipments Up in Japan as Smartphone Sales Decline

In Japan in 2014, shipments of traditional flip-phones increased for the first time in seven years, while smartphone shipments declined. Flip-phone shipments grew by 5.7 percent to over 10.58 million units in 2014, according to data collected by market researcher MM Research Institute and reported by Reuters. In the same period, according to the study, smartphone shipments in Japan decreased by 5.3 percent to 27.70 million units. It was the second year in a row in which smartphone sales declined in the country.

While it is highly unlikely that these results predict a mass return to the feature phone in the developed world, they do suggest several interesting things. First, in a highly saturated market such as Japan, which has a mobile penetration rate of 98.5 percent (125 million subscriptions), there is little room for smartphone uptake, so a decline in shipments is understandable. Second, because smartphone features and functionality are not increasing anywhere near as rapidly as they used to, and because the units are more durable than ever, there is less reason for smartphone owners to purchase new devices frequently. Third, we should beware of drawing overly general conclusions about “the developed mobile markets,” because these results may indicate that Japan has certain idiosyncratic cultural traits not shared by similar economies. While we have no hard data on the matter, it is possible that frugality and conservative usage habits cause many Japanese consumers to stay with feature phones, even though smartphones are easily available. Finally, it may be unwise to generalize too much from these figures for the simple reason that, according to the report’s authors, 2014 was a particularly strong year for renewals in the subscription cycle for feature phones, so the growth in that sector may be an anomaly that will not be repeated.

The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week or to contact the Tarifica Research department:     and        Follow Tarifica on LinkedIn

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