As the yen depreciates, gadget-loving Japan favors second-hand iPhones


TOKYO, Nov 8 (Reuters) – For years, Japanese shoppers have eagerly sought the latest gadgets, but now the weakening yen has put new iPhones out of reach for some, prompting a surge in second-hand trade in a big market for Apple Inc ( AAPL ). O).

The Japanese currency’s plunge to a 32-year low against the dollar has squeezed consumers and accelerated a broader spending shift in the world’s No. 3 economy. Industry observers say Japanese buyers have become 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 flagship iPhone 14 then debuted at 20% more than the iPhone 13, even as the US price remained steady at $799. While the dollar has appreciated against global currencies this year, the yen has taken a particular hit, falling 22%.

Salaryman Kaoru Nagase wanted a new phone, but couldn’t justify the price of the iPhone 14, which starts at ¥119,800 ($814). Instead, he picked up a used iPhone SE 2 in Tokyo’s Akihabara electronics district for less than a third of that.

“The iPhone 14 at over ¥100,000 is too expensive and I just can’t afford it. It would be nice if the battery lasted 10 years,” he said. The iPhone SE 2, which was released in 2020 but lacks the dual rear cameras of the iPhone 14, is said to be a “good balance” between price and features.

Apple declined to comment for this story. But in an annual regulatory filing last month, it said Japanese sales fell 9% in the year ended Sept. 24 due to a weaker yen.

Apple CFO Luca Maestri also admitted to analysts last month that a strong dollar had driven up prices for its products in some countries, but sales in Indonesia, Vietnam and other currency-challenged markets still grew by double digits.

According to technology market research firm MM Research Institute, sales of used smartphones in Japan rose nearly 15% to 2.1 million last fiscal year and will reach 3.4 million by 2026.

100,000 YEN BARRIER

Taishin Chonan bought a used iPhone 13 after one of the two devices he carried for personal use had a cracked screen. The replacement has a higher resolution and better battery and camera than the iPhone 7 it used.

“Until now I’ve only bought new phones, this is the first time I’ve bought a used phone,” said the 23-year-old. “New models are expensive.”

Even after the price hikes, the iPhone 14 sold in Japan is the cheapest among 37 countries after taxes, according to a September survey by the MM Research Institute. More yen weakness could prompt Apple to raise prices again, the research firm said, potentially chipping away at its massive 50% share of Japan’s smartphone market.

The latest iPhones are currently priced above ¥100,000, a “major psychological barrier” for many buyers, according to Itochu Corp., which sells used phones. (8001.T) trading house Belong Inc CEO Daisuke Inoue said. and online tablets.

Inoue said average sales on Belong’s Nicosuma e-commerce site tripled after Apple raised prices in July compared to the average price of the previous three months. At Belong’s operations center outside 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 for sale online. Belong uses Itochu’s global network to help find used devices both in Japan and abroad, depending on where the best prices are, Inoue said.

Some of the devices are bought from businesses, he said, such as tablets previously used for payments in cafes or displays in taxis.

Many Japanese have traditionally been wary of second-hand items, including electronics, but that is changing.

A Mercari, Inc ( 4385.T ) spokeswoman said the Mercari Marketplace saw strong growth in sales of used smartphones, while sales of home appliances and electronics also increased.

With Japan reopening to foreign tourists, the second-hand iPhone market is getting another boost.

Retail chain Iosys Co Ltd has seen an increase in the number of foreign tourists buying used iPhones in the last two months.

“The yen just continues to weaken,” said Takashi Okuno, chief executive of Iosys. “The trend of visiting Japan and buying an iPhone is 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 Holiday

Our standards: Thomson Reuters Trust Principles.



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