MMRI released their report for mobile phone sales in Japan for he first half of 2016, and the results were not good.
- Total handset sales decreased by 10.9% YoY.
- Smartphones decreased 8.4% YoY.
- However, looking at iPhone sales, this decreased only 3.1%, resulting in an increased market share of 40.7% (including feature phones).
- Importantly, Sony which is 2nd in market share saw a 28.5% drop in sales, while Sharp which is 3rd in smartphone share fell off a cliff with a 46.4% drop.
- The sharp decline has been attributed to the government decision to restrict what they consider excessive discounting of devices. The government thinks that by restricting discounting (some smartphones are sold for free by carriers if the purchaser agrees to a 24 month contract), carriers will eventually reduce the prices of their data plans. However, data plan prices have yet to come down, and are actually increasing depending on your usage pattern.
What this suggests is that when customers are more exposed to the real price of smartphones, it is the Android users who either decide to buy cheaper devices, or hold on to their devices longer. The iPhone users seem to be less sensitive to price increases.
In a nutshell, the Android market has a high level of price elasticity whereas the iPhone market does not.
I believe that the iPhone markets and the Android markets are actually different despite both being smartphones. Customers buy each for different needs, and they are not interchangeable. This is similar to how Mercedes and BMWs do not share the same market as cheap cars; the role of luxury cars is not just transportation.