Latest GfK Retail and Technology research has revealed a testing time for the Japanese mobile phone market, with handset sales exhibiting a marked decline. In September 2008, sales of mobile phone handsets were down by 27.1% over the same period in 2007, the largest comparative decrease in recent times.
The key factor in this slump has been the cessation of incentives offered by wireless mobile operators to distributors, which had previously helped to keep handset prices relatively low. This fact, combined with the catastrophic global economic situation which has drained consumer confidence, has led to many Japanese opting to hang on to their existing mobile handsets rather than purchase new ones. The average life cycle for handsets in 2008 stands at 2.8 years, comparing unfavourably with 2.2 years in 2007, and appears set to increase to 3.0 years in 2009.
In 2008 41.3 million handsets were sold, compared to 51.9 million in 2007 and 47.8 million in 2006. GfK analysts predict that this total will continue to decline in 2009.
However, there is hope on the horizon in the shape of a change in legislation anticipated to be passed in 2011. At present, mobile handsets contain a built-in 'SIM lock' which means that SIM card can only be used in that particular phone. The new legislation will see this restriction removed and consumers able to use SIM cards in any handset they choose.
This new system heralds a significant change in the Japanese mobile market and will provide a valuable stimulus as consumers will be free to change, add or upgrade their handsets with increasing frequency. Operators will now only sell the mobile tariffs whereas manufacturers will sell only handsets, which should lead to a more competitive market and bring prices down as demand increases.
Posted to the site on 5th November 2008
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