TOKYO, Nov 8 (Reuters) – For years Japanese shoppers have been eagerly hunting for the latest gadgets, but now a weakening yen is putting new iPhones out of reach. few and sparked 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 shift in spending in the world’s no.3 economy. Industry observers say Japanese shoppers are becoming more open to buying secondhand, thanks in part to the rise of online auction sites.
In July, Apple raised the price of the entry-level iPhone 13 by nearly a fifth. The basic iPhone 14 later debuted for 20% more than the iPhone 13 did, though the US price remained flat at $799. While the dollar has surged against global currencies this year, the yen has been particularly hard hit, falling 22%.
Salaryman 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 that.
“At over 100,000 yen the iPhone 14 is too expensive and I can’t afford it. It would be good if the battery lasts 10 years,” he said. The iPhone SE 2, released in 2020 but without the iPhone 14’s dual rear camera, is 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 sales in Japan fell 9% in the year ended September 24 due to the weakness of the yen.
Apple Financial Chief Luca Maestri also acknowledged to analysts last month that the strong dollar led to higher prices for its products in some countries, but sales still grew 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 last fiscal 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 of one of the two devices he brought for personal use broke. The replacement has a higher resolution and a better battery and camera than the iPhone 7 he used.
“Until now I have only bought new phones, this is my first time buying a used one,” said the 23-year-old. “New models are expensive.”
Even after the price increase, the iPhone 14 sold in Japan is the cheapest among 37 countries when taxes are taken into account, the MM Research Institute said in a September survey. Further yen weakness could prompt Apple to raise prices again, the research firm said, which could erode Japan’s massive 50% share of the smartphone market.
The latest iPhones are now priced above the 100,000 yen level which is a “major psychological barrier” for many buyers, said Daisuke Inoue, chief executive of Belong Inc, a unit of trading house Itochu Corp. and tablets online.
Average sales at Belong’s Nicosuma e-commerce site have tripled since Apple raised prices in July compared to the average of the previous three months, Inoue said. At Belong’s operations center outside Tokyo, shipments of used phones are unboxed and sorted before being inspected, labeled and cleaned by lines of workers on long tables.
The phones are then taken from several angles for sale online. Belong uses Itochu’s global network to help it source used goods in Japan and overseas, depending on where the best prices are, Inoue said.
Some of the devices were bought from businesses, such as tablets that were previously used for payments in cafes or displays in taxis, he said.
Many Japanese used to be wary of second-hand goods, including electronics, but that is changing.
Marketplace site Mercari saw strong growth in sales of used smartphones, while sales of home appliances and electronics also increased, a Mercari, Inc ( 4385.T ) spokesman said.
With Japan once again open to foreign tourists, the secondhand iPhone market is getting another boost.
Retail chain Iosys Co Ltd has seen an influx of foreign tourists buying used iPhones in the past two months.
“The yen continues to weaken,” 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
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