As yen tumbles, gadget-loving Japan goes for secondhand iPhones

TOKYO, Nov 8 (Reuters) – For years, Japanese shoppers eagerly sought the latest gadgets, but now a falling yen has put new iPhones out of reach for some and sparked a growing hand-me-down trade second in a major 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 shift in spending in the world’s No. 3 economy. Industry watchers say Japanese buyers have become more open to buying second-hand, 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 base iPhone 14 later debuted at 20% more than the iPhone 13, although the US price remained unchanged at $799. While the dollar has risen against global currencies this year, the yen has been hit particularly hard, falling 22%.

Salary worker 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 nice if the battery lasted for 10 years,” he said. The iPhone SE 2, released in 2020 but without the iPhone 14’s dual rear camera, was a “good balance” of cost and features, he said.

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

Apple Chief Financial Officer Luca Maestri also admitted to analysts last month that the strong dollar had led to higher prices for its products in some countries, but sales were still up by double digits in Indonesia, Vietnam and other struggling markets. with currency challenges.

Sales of used smartphones rose nearly 15% in Japan to a record 2.1 million last financial year and are likely to reach 3.4 million by 2026, according to technology market research firm MM Research Institute.

BARRIER 100,000 YEN

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

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

Even after the price hike, the iPhone 14 sold in Japan is the cheapest among 37 countries when tax is taken into account, the MM Research Institute said in a September survey. More weakness in the yen could prompt Apple to raise prices again, the research firm said, potentially damaging its large 50% share of Japan’s smartphone market.

The latest iPhones are now priced above the 100,000 yen mark, which is a “big psychological barrier” for many buyers, said Daisuke Inoue, chief executive of Belong Inc, a unit of trading house Itochu Corp. (8001.T) that sells used phones. and online tablets.

Average sales on Belong’s e-commerce site in Nicosuma have tripled since Apple raised prices in July compared with the average over the previous three months, Inoue said. At Belong’s operations center outside Tokyo, shipments of used phones were disassembled and sorted before being inspected, sorted and cleaned by rows 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 equipment both in Japan and abroad, depending on where the best prices are, Inoue said.

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

Many Japanese have traditionally been wary of used 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 increased, a spokesman for Mercari, Inc ( 4385.T ) 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 past two months.

“The yen just continues to weaken,” said Iosys executive Takashi Okuno. “The 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

Our Standards: The Thomson Reuters Trust Principles.

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