Anybody got real numbers on iPhone sales in Japan?

Uncertainty held forth even before Apple and SoftBank Mobile launched the 3G in Japan on July 11, 2008. An initial survey by iShare reported in June that only 9% of respondents wanted to buy an iPhone – though painting a 9% purchase rate for a single model of phone as disappointing is arguably odd. Yet the survey has to be discounted either way, as it targeted a small sample size and took place before Apple had even announced the 3G. 

• "Study suggests most of Japan not bonkers over iPhone"

A subsequent larger survey by popular pricing site Kakaku.com showed different results: as many as half of respondents eager to consider an iPhone, with huge numbers willing to jump ship from their current carrier to SoftBank just for some of that touch screen goodness. 

• Japanese iPhone survey indicates massive demand - Part I
• Japanese iPhone survey indicates massive demand - Part II

That survey pointed to a warm reception for Apple's new baby. Yet actual sales are all that matter. How's that going for the 3G?

Conflicting guesses

The iPhone's initial welcome in Japan was just what the optimists would have liked to see: huge buzz, massive buyer turnout, breathless media coverage, and quickly-depleted inventory. Lines exceeded 1000 people in some locations. Some who couldn't get one the first day camped out until the next day. Japan's initial stock of iPhones, reportedly 25,000 units, disappeared in the first two days.

• iPhone 3G racks up huge Japan sales for SoftBank - until the well runs dry

Naturally, things slowed quickly after the initial stampede. To what degree? Well, mobile industry consultants Eurotechnology Japan KK estimated in early August that between 75,000 and 125,000 iPhone 3Gs were sold in Japan between July 11 and the end of the month – a perfectly healthy number. On the other hand, lacking much real sales data to work with, the report employed plenty of guesswork based on changes in SoftBank Mobile subscriber numbers.

• How many iPhones sold in Japan in July?

A more pessimistic report came in September from research firm MM Research Institute. It reported that Apple sold 200,000 iPhones in Japan in the first two months, a number in line with Eurotechnology's estimate, but has faced steadily-declining sales since. Press including the Wall Street Journal quickly formed a "the iPhone isn't selling in Japan" bandwagon, citing unnamed analysts who predict first-year sales will fall short of half Apple's goals.

SoftBank, for its part, did credit the iPhone alone for a 2% rise in its net profit for the July-September quarter, but that achievement doesn't preclude an initial heady rush followed by buyer disinterest. 

What's the real story? Unfortunately, Apple and SoftBank Mobile aren't any help, so far releasing no detailed sales data.

Is the iPhone unattractive?

Why the big slowdown, if indeed there is one? Analysts have suggested reasons including:

• mediocre 2-megapixel camera
• lack of emoji – smilies and similar graphics for email
• high price
• digital TV
• electronic payment / train pass features
• resistance to online credit card purchases for App Store downloads
• lack of understanding of iPhone benefits

On top of that, many watchers suggest that the factors that drove iPhone 3G excitement overseas, including 3G networking and web browsing, have already been available in Japan in competing models. That factor doesn't represent a mark against the iPhone, but could be cause for tepid enthusiasm in Japan (outside the early excited buyers).

How valid are the shortcomings claimed above? Some notes:

Camera: The iPhone does lack video, focus, a flash, and other features found in many cell phones in Japan; it's no doubt a mediocre player on the photography front. Yet it's not true, as sometimes claimed in the English-language press, that cell phones in Japan are all massive-megapixel wonders. Phones with no more megapixels than the iPhone are still common in Japan, including top sellers like the N706i.

Emoji: A wide range of little smilies and other symbols is built into the text input systems of cell phones in Japan. But the unreported truth is that the iPhone does have plenty of emoji symbols available via its Japanese input system – circles, squares, stars, hearts, even fun stuff like a little phone, little snowman, and the onsen hot spring mark! They've been there all along.

However, these have to be accessed by character input (such as inputting おんせん onsen to find the hot spring mark among the conventional character choices offered). Users might prefer to see whole screens of symbols to quickly choose from. This would be an easy feature to add via software update – and reports say that Apple's next update will do just that.

High price: The Wall Street Journal article compares the iPhone's Japan price to the US price, which is meaningless to the topic at hand. The question is: How does the iPhone price stack up to other phones' prices in Japan? A detailed look will have to come later; the short answer is that it's not significantly more expensive, and SoftBank Mobile has made the iPhone data plan much more palatable since introduction.

Still, there is a recession on...

Digital TV: To evaluate the impact of 1-seg TV, we'll have to see some data on just how highly Japanese users rank the feature, which offers unlimited viewing of limited digital TV channels. (Sometimes. When the signal comes in.) It's perhaps important enough for SoftBank Mobile to tackle via a TV tuner add-on for the iPhone, though unfortunately for SoftBank and TV-loving phone buyers, an extra gadget is decidedly less attractive than built-in capabilities.

Electronic payment: Some mobiles in Japan boast chips enabling "digital wallet" purchases and/or use as a train pass. Data is needed to evaluate just how widely used the feature actually is. Whatever the answer to that, it's true that the iPhone has no such feature; adding it would require that Apple work closely with related services in Japan, and modify both iPhone hardware and software.

Resistance to online purchases: Alleged Japanese resistance to make online purchases via credit cards is an old story, but one wonders how true it is. Credit card use is by no means an oddity in Japan, and the matter would seem to be moot to begin with: Apple already has an army of card-wielding Japanese iTunes customers who can now purchase apps along with tunes. Over 13 million Japanese are iTunes users – that's a quarter of Japan's Internet-using population, representing the highest penetration of any country.

• Nearly 25 Percent of Japanese Internet Users Accessed iTunes in August, According to comScore World Metrix

However, additional data is needed to see whether those Japanese users are buying enough from the iTunes Music Store to suggest a bright future for the App Store.

One small bit of related info: The maker of iPhone virtual lighter application Smule reports that it tracks the location of users, and many of Smule's top cities reporting are in Japan. While that's nothing upon which to draw conclusions, it does hint at a lack of App Store phobia in Japan.

Lack of understanding of iPhone benefits: The iPhone certainly does bring a new way of doing things, and it's easy to imagine some initial head-scratching over how to use it. Apple and SoftBank will have to address the matter via advertisement and education.

But it's possible to see this as a positive for iPhone sales, in that sales could easily rise once customers learn the iPhone way and its benefits.

Another view

The above notes questioning alleged iPhone shortcomings are highly speculative; then again, so are the supposed shortcomings themselves. We don't actually know yet whether many Japanese consumers are put off by the iPhone's lack of digital TV and e-wallet and what not, or even whether sales are flagging or not. 

One skeptical look at the naysayers comes from RoughlyDrafted Magazine, in its article The Japanese iPhone Failure Myth. A paraphrased summary of what the article finds wrong with gloomy reports:

• MM Research doesn't provide data to support its claim of falling sales, and is further contradicted by the Eurotechnology estimate;
• The Wall Street Journal was very wrong when it made a similar claim of poor initial iPhone sales in the US;
• Claimants of sales shortfalls may have had unrealistically high expectations for a mobile market that's very saturated;
• Analysts don't offer facts to support claims like "...[Japanese] consumers tend to be more cautious about making purchases online".

Granted, RoughlyDrafted is a site that's not afraid to take Apple's side in any dispute; make of the article's argument what you will. But note that there are iPhone fans to be found in the Japanese press as well, including high praise for the gadget from big names in its tech industry. There'll be reports highlighted here in the future; for now, here's a translated piece for your review:

• iPhone Sheds Light on Weakness of Japanese Handset Makers

Where does that leave us?

We're left where we started: taking guesses without data. Until data arrives, we'll have to wonder.

Let's wonder skeptically, though. In addition to the above possible problems with those reports of an iPhone slump, there's an additional concern: a press firmly bound to certain popular memes about the Japanese market, and determined to find newsworthy "differences" between that market and the rest of the world. It's not unusual for those attitudes to heavily skew any reports about Japan. (Case in point: Show tech writers the earlier-mentioned hard data that iTunes is the most-used music service in Japan, and some will still walk away claiming that Japan uniquely prefers something else.)

And with that, let's go back to the question that opened the article:

Anybody got real numbers on iPhone sales in Japan?