As Yen Falls, Gadget-Loving Japan Bets On Second-Hand iPhones

As Yen Falls, Gadget-Loving Japan Bets On Second-Hand iPhones

By Miho Uranaka

TOKYO (Reuters) – For years, Japanese buyers have eagerly forked out for the latest gadgets, but now the yen’s slump has put new iPhones out of reach for some and sparked a growing secondhand trade in a market important to Apple Inc.

The Japanese currency’s slide to a 32-year low against the dollar has put pressure on consumers and hastened a broader spending shift in the world’s No. 3 economy. Industry watchers say shoppers in Japan have become more open to buying secondhand, thanks in part to the rise of online auction sites.

In July, Apple increased the price of the entry-level iPhone 13 by almost a fifth. The base iPhone 14 later debuted for 20% more than the iPhone 13, even as the US price held steady at $799. While the dollar has risen against world currencies this year, the yen has has been particularly affected, 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 more than 100,000 yen, the iPhone 14 is too expensive and I just can’t afford it. It would be fine if the battery lasted 10 years,” he said. The iPhone SE 2, released in 2020 but without the iPhone 14’s dual rear camera, was a “good balance” between cost and features, she said.

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

Apple’s chief financial officer, Luca Maestri, also acknowledged to analysts last month that a strong dollar had caused prices to rise for its products in some countries, but sales had still grown by double digits in Indonesia, Vietnam and other markets. facing foreign exchange challenges.

Sales of used smartphones grew nearly 15% in Japan to a record 2.1 million in the latest financial year and are likely to reach 3.4 million by 2026, according to tech market research firm MMResearch Institute.

100,000 YEN BARRIER

Taishin Chonan bought a used iPhone 13 after the screen on one of two devices he carries for personal use was broken. The replacement has a higher resolution and a better battery and camera than the iPhone 7 I had been using.

“So far I’ve only bought new phones, this is the first time I’ve bought used ones,” said the 23-year-old. “The new models are expensive.”

Even after price increases, 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, potentially hurting its hefty 50% share of Japan’s smartphone market.

The latest iPhones are now priced above the 100,000 yen level, which is a “significant psychological barrier” for many buyers, said Daisuke Inoue, chief executive of Belong Inc, a unit of trading house Itochu Corp. that sells phones and iPhones. used tablets online.

Average sales on 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 the Belong hub on the outskirts of Tokyo, shipments of used phones were unpacked and sorted before being inspected, graded and cleaned by lines of workers at long tables.

The phones were then photographed from multiple angles for sale online. Belong uses Itochu’s global network to help it source used devices both in Japan and abroad, depending on where the best prices are, Inoue said.

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

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

Marketplace site Mercari has seen strong growth in sales of used smartphones, while sales of home appliances and electronics have also grown, a Mercari, Inc. spokesman said.

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 foreign tourists buying used iPhones in the last two months.

“The yen continues to weaken,” Iosys executive Takashi Okuno said. “That trend of visiting Japan and buying an iPhone is making a comeback.”

($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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