Apple still dominates Samsung, locals in Japan smartphone business

IDG News Service - Apple has continued to dominate the Japanese smartphone market in recent months, new data shows, and analysts say it is likely to stay strong through the new year.

New shipment numbers released by IDC on Wednesday put Apple firmly ahead of Samsung Electronics and Japanese manufacturers during the third quarter of 2012. The numbers show a quarter of all smartphones shipped in Japan were iPhones, 23.5% of them Fujitsu phones and 9.5% Samsung phones.

While the iPhone has had less success in nearby China, and chief rival Samsung has made major gains in other markets, Apple remains the clear winner in Japan. Its handsets have been heavily promoted by two major operators, Softbank and KDDI, while the bulk of Samsung sales are via NTT DoCoMo, which doesn't carry Apple products.

"Apple is at the top of the smartphone market here," said Hideaki Yokota, a mobile analyst at MM Research Institute in Tokyo. "They get a boost even from the lower-end market, where older iPhone models are sold for AY=0 with a contract."

As with previous iterations, the iPhone 5 launched to long lines in Japan in October, and there were some shortages initially. The IDC data show domestic makers like Fujitsu and Sharp are also a strong presence domestically, though they have little presence in overseas markets.

"It is important to note that these are shipment numbers, though Apple's sales are also strong," said IDC market analyst Michito Kimura in an interview.

"Fujitsu appears strong, especially with its 'RakuRaku' phone, but there is some oversupply here and its position will weaken."

Fujitsu's RakuRaku phones have large icons and text and simplified operation aimed at Japan's elderly users. The company released a smartphone version earlier this year, and has aggressively shipped it to sales outlets through carrier NTT DoCoMo, Kimura said.

Sharp has had strong success with a new handset that features its IGZO screen technology, Yokota said. The company says the screen uses far less power than normal LCD screens and the devices can last two days on a single charge, a rarity for a smartphone.

"Battery life is a major concern for Japanese consumers, and many are buying the Sharp phone as a second phone. Sharp is limited by its ability to supply them," Yokota said.

The IDC numbers also show that Samsung's share of Japan smartphone shipments dropped sharply from the second quarter, when its flagship Galaxy S3 launched. In the second quarter Samsung accounted for 17.3% of shipments to Apple's 28.7%, before dropping to under 10% in the third quarter.

Samsung may also face bigger challenges ahead in Japan - the country's largest business newspaper, the Nikkei, reported earlier this month that DoCoMo is reconsidering whether to offer the iPhone. The operator has seen its users increasingly desert for rivals in recent months.

DoCoMo has until now heavily promoted Samsung's Galaxy S3 and Note devices in the domestic market, but would be less inclined to do so if it also had the iPhone.