As yen tumbles, gadget-loving Japan goes for secondhand iPhones
08/11/2022 01:02
By Miho Uranaka
TOKYO, Nov 8 (Reuters) - For years Japanese shoppers
eagerly shelled out for the latest gadgets, but now a tumbling
yen has put new iPhones out of reach for some and sparked a
growing secondhand trade in a major market for Apple Inc
AAPL.O .
The Japanese currency's fall to a 32-year low against the
dollar has squeezed consumers and accelerated a broader spending
shift in the world's no.3 economy. Industry watchers say Japan's
shoppers have become more open to buying secondhand, thanks in
part to the rise of online auction sites.
In July, Apple hiked the price of the entry-level iPhone 13
by nearly a fifth. The basic iPhone 14 later debuted at 20% more
than the iPhone 13 did, even as the U.S. price stayed flat at
$799. While the dollar has surged against global currencies this
year, the yen has been particularly hit, dropping 22%.
Salaryman Kaoru Nagase wanted a new phone but couldn't
justify the price of a iPhone 14, which starts at 119,800 yen
($814). Instead, he bought a used iPhone SE 2 in Tokyo's
Akihabara electronics district for less than a third of that.
"At more than 100,000 yen the iPhone 14 is too expensive and
I just can't afford it. It would be fine if the battery lasted
for 10 years," he said. The iPhone SE 2, released in 2020 but
without the dual rear camera of the iPhone 14, was a "good
balance" of cost and features, he said.
Apple declined to comment for this story. But in an annual
regulatory filing last month, it said Japan sales fell 9% in the
year ended September 24 due to the yen's weakness.
Apple Chief Financial Luca Maestri also acknowledged to
analysts last month that the strong dollar had led to price
increases for its products in some countries, but sales had
still grown by double digits in Indonesia, Vietnam and other
markets facing currency challenges.
Sales of used smartphones grew nearly 15% in Japan to a
record 2.1 million in the last financial year and are likely to
reach 3.4 million by 2026, according to technology market
research firm MM Research Institute.
100,000 YEN BARRIER
Taishin Chonan bought a used iPhone 13 after the screen
cracked on one of the two devices he carries for personal use.
The replacement has higher resolution and a better battery and
camera than the iPhone 7 he had been using.
"Up until now I'd only ever bought new phones, this is my
first time buying used," the 23-year-old said. "The new models
are expensive."
Even after the price hikes, the iPhone 14 sold in Japan is
the cheapest among 37 countries when tax is taken into account,
MM Research Institute said in a September survey. More yen
weakness could prompt Apple to raise prices again, the research
firm said, potentially denting its hefty 50% share of Japan's
smartphone market.
The latest iPhones are now priced above the 100,000 yen
level that is a "major psychological barrier" for many shoppers,
said Daisuke Inoue, chief executive of Belong Inc, a unit of
trading house Itochu Corp. 8001.T that sells used phones and
tablets online.
Average sales on Belong's Nicosuma e-commerce site have
trebled since Apple raised prices in July compared to the
average over the previous three months, Inoue said. At Belong's
operations centre outside of Tokyo, shipments of used phones
were unboxed and sorted before being inspected, graded and
cleaned by rows of workers at long tables.
The phones were then photographed from multiple angles for
sale online. Belong uses Itochu's global network to help it
source used devices both in Japan and overseas, depending on
where the best prices are, Inoue said.
Some of the devices are bought from businesses, such as
tablets previously used for payments in cafes or displays in
taxis, he said.
Many Japanese have traditionally been wary of secondhand
items, including electronics, but that is changing.
Marketplace site Mercari has seen strong growth in sales
of used smartphones, while sales of home appliances and
electronics have also grown, a Mercari, Inc 4385.T
spokesperson said.
With Japan open again to foreign tourists, the secondhand
iPhone market is getting another boost.
Retail chain Iosys Co Ltd has seen a surge in foreign
tourists buying used iPhones in the last two months.
"The yen just keeps weakening," said Iosys executive Takashi
Okuno. "That trend of visiting Japan and buying an iPhone is
coming back."
($1 = 147.1200 yen)
(Additional reporting by Kohei Miyazaki in Zama, Japan and
Paresh Dave in San Francisco; Writing by David Dolan; Editing by
Lincoln Feast)
((david.dolan@thomsonreuters.com; +81 3 4563 2708;))