For years, Japanese consumers eagerly paid for the latest gadgets, but a falling yen has put new iPhones out of reach for some, sparking a growing secondhand trade in a key market for Apple Inc.
The Japanese yen’s drop to a 32-year low against the US dollar has squeezed consumers and hastened a broader spending shift in the world’s third largest economy. According to industry observers, Japan’s shoppers have become more open to buying used, thanks in part to the rise of online auction sites.
Apple increased the price of the entry-level iPhone 13 by nearly a fifth in July. The basic iPhone 14 later debuted at a 20% higher price than the iPhone 13, despite the fact that the US price remained constant at $799. While the dollar has risen in value against other currencies this year, the yen has suffered the most, falling 22%.
Kaoru Nagase, a salaryman, needed a new phone but couldn’t justify the price of an iPhone 14, which starts at 119,800 yen ($814). Instead, he paid less than a third of that for a used iPhone SE 2 in Tokyo’s Akihabara electronics district.
“At more than 100,000 yen, the iPhone 14 is prohibitively expensive for me.” “It’d be fine if the battery lasted ten years,” he explained. He described the iPhone SE 2, which was released in 2020 but lacked the dual rear camera of the iPhone 14, as a “good balance” of price and features.
Apple has declined to comment. However, in an annual regulatory filing last month, it stated that sales in Japan fell 9% in the fiscal year ended September 24 due to the yen’s weakness.
Apple Chief Financial Officer Luca Maestri also admitted to analysts last month that the strong dollar had resulted in price increases for its products in some countries, but sales had still increased by double digits in Indonesia, Vietnam, and other currency-challenged markets.
According to technology market research firm MM Research Institute, used smartphone sales in Japan increased nearly 15% to a record 2.1 million in the previous fiscal year and are expected to reach 3.4 million by 2026.
Even after the price increases, the iPhone 14 sold in Japan is the cheapest among 37 countries when taxes are factored in, according to a September survey conducted by MM Research Institute. More yen weakness, according to the research firm, could prompt Apple to raise prices again, potentially reducing its hefty 50% share of Japan’s smartphone market.
According to Daisuke Inoue, chief executive of Belong Inc, a unit of trading house Itochu Corp. that sells used phones and tablets online, the latest iPhones are now priced above the 100,000 yen level, which is a “major psychological barrier” for many shoppers.
As per Inoue, average sales on Belong’s Nicosuma e-commerce site have tripled since Apple raised prices in July compared to the previous three months. Shipments of used phones were unboxed and sorted at Belong’s operations centre outside of Tokyo before being inspected, graded, and cleaned by rows of workers at long tables.
The phones were then photographed from various angles for online sale. According to Inoue, Belong uses Itochu’s global network to help it source used devices both in Japan and overseas, depending on where the best prices are.
Some of the devices are purchased from businesses, such as tablets previously used for payment in cafes or taxi displays, he explained.
