As yen tumbles, gadget-loving Japan goes for secondhand iPhones

TOKYO, Nov 8 (Reuters) – For years Japanese consumers have been eager for new gadgets, but now the falling yen has put some new iPhones out of reach for some, and , which sparked a second-quarter stock market growth for Apple Inc (AAPL. O).

The fall of the Japanese currency to a 32-year low against the dollar has pressured consumers and accelerated a broader spending cycle in the world’s third-largest economy. Industry watchers say Japanese consumers are more likely to buy second-hand goods, thanks to the rise of online shopping sites.

In July, Apple increased the price of the entry-level iPhone 13 by nearly five times. The original iPhone 14 later started at 20% more than the iPhone 13, although the US price remained at $799. While the dollar has risen against global currencies this year, the yen has been hit hard, falling 22%.

Salaryman Kaoru Nagase wanted a new phone but couldn’t decide on the price of the 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.

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“At more than 100,000 yen the iPhone 14 is expensive and I can’t afford it. It would be good if the battery lasts for 10 years,” he said. The iPhone SE 2, released in 2020 but without the iPhone 14’s second rear camera, has a “great advantage” of price and features, he said.

Apple declined to comment on this matter. But in the annual statutory report last month, Japan’s sales fell 9% in the year ended September 24 due to a weaker yen.

Apple’s Chief Financial Officer Luca Maestri also acknowledged to analysts last month that the strong dollar had pushed up the cost of its products in some countries, but sales continued to rise by double digits in Indonesia, Vietnam and other markets facing financial challenges.

Sales of smartphones rose nearly 15% in Japan to a record 2.1 million last fiscal year and could 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 cracked on one of the two devices he was carrying for personal use. The replacement has a higher resolution, better battery and camera than the iPhone 7 he used.

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“Until now I buy new phones, this is my first time buying one,” said the 23-year-old. “New models are expensive.”

Even after price increases, the iPhone 14 sold in Japan was the cheapest among 37 countries when taxes were taken into account, MM Research Institute said in a September study. . The yen’s weakness could cause Apple to raise prices again, the research firm said, potentially destroying 50% of Japan’s smartphone market.

New iPhones now priced above the 100,000 yen mark are a “big psychological barrier” for many consumers, said Daisuke Inoue, chief executive of Belong Inc, part of the Itochu retail house. Corp. (8001.T) sells used phones. and online platforms.

Average sales on Belong’s e-commerce site Nicosuma have tripled since Apple raised prices in July compared to the average for the previous three months, the report said. Inoue. At Belong’s processing center outside Tokyo, shipments of used phones are unpacked and sorted before being inspected, labeled and cleaned by rows of workers at long tables.

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Phones were photographed from multiple angles for online shopping. Belong uses Itochu’s global network to help it source used equipment in Japan and overseas at the best prices, Inoue said.

Some of the equipment is bought from businesses, such as tables that were previously used for prices in cafes or displays in taxis, he said.

Many Japanese have been wary of traditional goods, including electronics, but that is changing.

Mercari’s marketplace has seen strong growth in sales of used smartphones, while sales of home appliances and electronics have increased, a Mercari, Inc ( 4385.T ).

As Japan reopens to foreign tourists, the second-hand iPhone market is on the rise.

Marketing group Iosys Co Ltd found an increase in foreign tourists buying used iPhones in the past two months.

“The yen is still weak,” said Iosys CEO Takashi Okuno. “That feeling of going to 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; Written by David Dolan; Edited by Lincoln Feast

Our Standards: Thomson Reuters’ Guardian Principles.

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