As the yen weakens, gadget-loving Japan turns to used iPhones

TOKYO (Reuters) – For years, Japanese shoppers have been eagerly awaiting the latest hardware, but now a weaker yen has put new iPhones out of reach for some and sparked a growing second-hand trade in a key market for Apple Inc (AAPL.Q).

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

In July, Apple raised the entry-level iPhone 13 price by nearly a fifth. The base iPhone 14 came out later with 20% more than the iPhone 13, even as the US price remained steady at $799. While the dollar has risen against global currencies this year, the yen has been particularly hard hit, dropping 22%.

Salary Kaoru Nagase wanted a new phone but couldn’t justify 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 amount.

“At more than 100,000 yen, the iPhone 14 is too expensive and I can’t afford it. It would be good if the battery lasted 10 years,” he said. He said the iPhone SE 2, which was released in 2020 but without the iPhone 14’s dual rear camera, was a “good balance” of cost and features.

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

Apple’s chief financial officer Luca Maestri also admitted to analysts last month that a strong dollar had led to price increases for its products in some countries, but sales were still growing in double digits in Indonesia, Vietnam and other currency-challenged markets.

Sales of used smartphones grew nearly 15% in Japan to 2.1 million in the past fiscal year and are likely to reach 3.4 million by 2026, according to technology market research firm MM Research Institute.

100,000 yen barrier

Taishin Chonan bought an iPhone 13 second-hand after cracking the screen in one of the two devices he was carrying for personal use. The variant has a higher resolution and a better battery and camera than the iPhone 7 it was using.

“So far I have only bought new phones, this is my first time buying used phones,” said the 23-year-old. New models are expensive.

Even after the price hikes, the MM Research Institute said in a September survey that the iPhone 14 sold in Japan is the cheapest of 37 countries when taxes are taken into account. The research firm said further yen weakness could push Apple to raise prices again, potentially eroding its huge 50% share of the smartphone market in Japan.

said Daisuke Inoue, CEO of Belong Inc, a unit of trading house Itochu Corp. (8001.T) which sells used phones and tablets online.

Inoue said average sales on Belong’s Nicosuma e-commerce site have tripled since Apple raised prices in July compared to the average over the previous three months. At the Belong Operations Center outside Tokyo, shipments of used phones have been unboxed and sorted before being checked, sorted and cleaned by rows of workers at long tables.

The phones were then photographed from multiple angles for sale online. Inoue said Belong is using Itochu’s global network to help it get used devices in Japan and abroad, based on the best prices.

He said some of the devices are being bought from companies, such as tablets that were previously used to pay in cafes or taxi screens.

Many Japanese have long been wary of second-hand items, including electronics, but that’s changing.

Marketplace Mercari saw strong growth in sales of used smartphones, while sales of home appliances and electronics also grew, a Mercari, Inc (4385.T) spokesperson said.

With Japan once again opening up to foreign tourists, the used iPhone market is getting another boost.

Store chain Iosys Co Ltd has seen a rise in the number of foreign tourists buying used iPhones in the past two months.

“The yen continues to weaken,” said Takashi Okono, CEO of Iosys. “The trend of visiting Japan and buying an iPhone is back.”

(dollar = 147.1200 yen)

Additional reporting by Kohei Miyazaki in Zama, Japan and Parish Dave in San Francisco. Written by David Dolan. Edit Lincoln Fest

Our Standards: Thomson Reuters Trust Principles.

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