Survey: Japanese Handset Demand to Hit Bottom in FY 2010

Mar 17, 2009 16:32 Yukiko Kanoh, Nikkei Electronics

Japanese domestic demand for mobile phones will continue to weaken until fiscal 2010 and rebound in fiscal 2011, according to a survey conducted by a Japanese research firm.

MM Research Institute Ltd (MMRI) carried out the survey in February 2009, targeting 2,500 mobile phone users in Japan. It analyzed the survey results with the handset replacement cycle, purchase prices of handsets and market data, and estimated domestic demand through fiscal 2013.

Mobile phone sales in fiscal 2008 is expected to decline 25.7% year-on-year (YoY) to 37.65 million units in Japan, sharply falling from fiscal 2007, which marked record high sales. MMRI forecast sales will continue to shrink through fiscal 2010 until demand rises YoY in 2011. However, annual mobile phone sales are likely to remain about 35 million units over the next five years without any sharp recovery.

The largest factor behind the decreased mobile phone sales is the sharp rise in handset prices resulting from the new marketing method introduced in fiscal 2007, according to MMRI. In fiscal 2008, the mobile phone replacement cycle was 3.1 years, 1.4 times longer than the 2.2 years in fiscal 2007. The company forecast the cycle will extend to 3.6 years in fiscal 2010, temporarily slow down growth and reach 3.7 years in fiscal 2013.

Although Japanese mobile phone market is not likely to revive significantly, a certain degree of demand can be expected for telecommunication services and data communication services that use products other than mobile phones, MMRI said. Those services include broadband services using data communication cards and notebook PCs called netbooks.

More diverse data communication services and value-added terminals can be expected to emerge in the market following the realization of mobile WiMAX, next-generation PHS and LTE (long term evolution), etc, according to MMRI. Therefore, it is important to attract specific users with network-capable products and services other than mobile phones and to create needs in order to energize the mobile broadband market, according to MMRI.

24 Hours | 7 Days