note: this post has been incorporated in a separate summary post
The iPhone XS Japan launch was muted with none of the lines of the 2017 iPhone X launch. But as of last weekend the local Docomo store was completely out of iPhone XS stock, this weekend was the same. The store doesn’t list iPhone XR stock. It’s all you need to know which iPhone model is selling: people who want to upgrade their iPhone are choosing iPhone XS. iPhone XR is nice but the price is not nice enough to drive iPhone upgrades for people on the fence. If the WSJ iPhone XS price cut in Japan story is correct we should start seeing iPhone XR specials from Docomo, au and SoftBank this week.
I suspect there are lots of iPhone users on the fence, a XS price cut for JP carriers makes sense but as outlined earlier it won’t be enough. The Japanese government is pushing for market changes and Apple needs to change with it and do more if they want to hang onto iPhone market share. In order of importance these are:
- Issue a iPhone X Suica problem repair program
This is essential. As I have written many times before Apple really damaged their reputation in the Japanese market by sweeping defective NFC iPhone X production under the carpet. Apple can repair some of the damage by replacing iPhone X Suica problem devices and agressively fixing iOS 12 Suica Express Card performance issues. - Extend Apple Pay Japan and lower transaction fees
Include important missing pre-paid cards that are on Osaifu-Keitai and Google Pay: nanaco (7 Eleven), WAON (AEON), Edy (Rakuten). Nanaco and WAON are particularly important in areas rural outside of the JR transit hubs. It’s said that Apple Pay Suica transaction fees are 3.75% while Google Pay Suica is 3.25%. The Japanese government pushing for a card transaction fee cap of 3.25% plus contactless payment incentives as part of the sales tax increase in 2019. Apple would be smart to lower Apple Pay transaction fees inline with proposals now instead of later. - Add TV content and improve Apple Music services
Japan is the 2nd largest music market after the United States. Japanese TV content is missing on the Apple content platform that everybody else has (Amazon, Netflix, Hulu, etc) and can bundle, Apple cannot. If Apple waits for their subscription service rollout, it may be too late. With big bad Dentsu, the Imperial Death Star of Japanese media as the power driving Spotify in Japan, Apple Music also has to work overtime to keep up: hire the best Japanese music curators, create some cool J-Pop Beats 1 programs instead tired old UK content and fix the iCloud Music Library Japanese music metadata mess so Apple can sell HomePod. - Fix Apple Maps and Siri
This is a given that has been covered before: the total experience needs to greater than the sum of the parts.
There isn’t much time, the 10% Japanese sales tax is due to start October 1, 2019.
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