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Japan's big mobile carriers still glued to their iPhones

Latest models offer the sole selling point over cut-rate competition

The big three Japanese mobile carriers have released the iPhone 8 and iPhone 8 Plus.

TOKYO -- NTT DocomoSoftBank Group and KDDI all rolled out the iPhone 8 and iPhone 8 Plus on Friday, with high hopes that the new Apple handsets will help the three major Japanese mobile carriers hang on to subscribers as rivals push cheaper service.

With the top-of-the-line iPhone X not out until November, enthusiasm was somewhat lacking. But the trio harbor greater expectations than ever for the new handsets, since the latest Apple phones are what sets them apart from mobile virtual network operators providing cut-rate service via the networks of other companies.

"The world has changed dramatically in the past decade, and I really feel this has come from the power of the iPhone," SoftBank President Ken Miyauchi said at a flagship-store launch event in Tokyo's Ginza shopping district. The latest iPhones will definitely set a new sales record when the iPhone X is also released, he said.

A decade into the iPhone age, the pattern in Japan is established. When Apple rolls out new models here each fall, carriers have employed various promotional tactics, such as offering the devices effectively free of charge, in a tussle for subscribers.

With iPhones accounting for nearly 70% of smartphones used in Japan, the market is heavily reliant on Apple, according to AUN Consulting.

This stands in sharp contrast to the rest of the world, where devices from Samsung Electronics of South Korea and Huawei Technologies of China have emerged. Many youths are increasingly turning away from the iPhone in emerging economies of Asia.

The dependence of the three Japanese carriers on the iPhone is expected to grow further with the rise of the cut-rate operators.

Apple sells carriers the newest handsets in volume only. This makes them unsuitable for upstart virtual network operators with no hope of selling them all. Even Rakuten, the largest in Japan not under a larger mobile carrier, "cannot even start to think" about offering the latest iPhones for this reason, an official said.

So for the big three, the latest iPhones have become their only weapon against such service providers offering cheaper rates.

The trio have introduced plans tailored to their clienteles. SoftBank, which serves many younger customers, has set generous data limits, for example.

Market leader Docomo will offer deep discounts to customers staying in a contract for a second year and beyond. With the aim of keeping subscribers from switching to other carriers, this deal will apply exclusively to iPhones.

In an effort to reduce dependence on the iPhone, Docomo will offer a 1,500 yen ($13.38) monthly discount to users of Fujitsu and Samsung smartphones. But the impact remains to be seen.

The three carriers have flourished in the smartphone economy created by the iPhone. But there is a growing sense of urgency that they may be turning into "Apple dealerships," as a Docomo official put it.


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