By Miho Uranaka
TOKYO (Reuters) – For years, Japanese shoppers have been eagerly scouring for the latest gadgets, but now a falling yen has put new iPhones out of reach for some and sparked a growing second-hand trade in a key market for Apple Inc.
The Japanese currency’s plunge to a 32-year low against the dollar has squeezed consumers and accelerated a broader shift in spending in the world’s third-largest economy. Industry watchers say Japan’s buyers have become more receptive to buying second-hand, in part due to the rise of online auction sites.
In July, Apple increased the price of the entry-level iPhone 13 by almost a fifth. The base iPhone 14 later debuted at 20% more than the iPhone 13, although the US price remained unchanged at $799. While the dollar has risen against global currencies this year, the yen has been hit particularly hard, losing 22%.
Salary earner Kaoru Nagase wanted a new phone but couldn’t justify the price of an 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 it.
“At more than 100,000 yen, the iPhone 14 is too expensive and I just can’t afford it. It would be okay if the battery lasted 10 years,” he said. The iPhone SE 2, which launched in 2020 but without the iPhone 14’s dual rear camera, is a “good balance” between cost and features, he said.
Apple declined to comment on this story. But an annual regulatory filing last month said sales in Japan fell 9% in the year ended September 24 due to the weakness of the yen.
Apple Chief Financial Officer Luca Maestri also conceded to analysts last month that the strong dollar has led to price hikes for its products in some countries, but sales in Indonesia, Vietnam and other currency-struggling markets are still growing at double-digit rates.
Sales of used smartphones in Japan rose nearly 15% last fiscal year to a record 2.1 million and is expected to reach 3.4 million by 2026, according to technology market research firm MM Research Institute.
100,000 YEN LOCK
Taishin Chonan bought a used iPhone 13 after the screen of one of the two devices he carries for personal use shattered. The replacement has a higher resolution and better battery and camera than the iPhone 7 it was using.
“Until now I’ve only ever bought new phones, now I’m buying used ones for the first time,” said the 23-year-old. “The new models are expensive.”
Even after the price increases, the iPhone 14 sold in Japan is the cheapest among 37 countries when taxes are factored in, the MM Research Institute said in a September survey. Further yen weakness could prompt Apple to hike prices again, the research firm said, potentially eroding its 50% share of the Japanese smartphone market.
The latest iPhones are now priced above the 100,000 yen mark, which presents a “big psychological barrier” for many buyers, said Daisuke Inoue, general manager of Belong Inc, a unit of trading house Itochu Corp. that sells used phones and tablets online sold.
Average sales at Belong’s e-commerce site in Nicosuma have tripled since Apple raised prices in July compared to the previous three-month average, Inoue said. At Belong’s operations center outside of Tokyo, shipments of used phones were unpacked and sorted before being inspected, sorted and cleaned by workers at long tables.
The phones were then photographed from different angles to sell them online. Belong uses Itochu’s global network to source used equipment both in Japan and abroad depending on where the best prices are, Inoue said.
Some of the devices are being bought by companies, like tablets previously used for payments in cafes or displays in taxis, he said.
Many Japanese have traditionally been suspicious of second-hand 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 increased, a spokesman for Mercari, Inc. said.
As Japan reopens to foreign tourists, the second-hand iPhone market gets another boost.
Retail chain Iosys Co Ltd has seen a surge in foreign tourists buying used iPhones over the past two months.
“The yen just keeps weakening,” said Iosys manager Takashi Okuno. “This 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 of Lincoln Feast)
