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A worker cleans a used iPhone at an operations centre of Belong, a unit of Itochu Corp that sells used smartphones online, in Zama, located in Japan's Kanagawa Prefecture, on October 27, 2022. Photo: Reuters

As yen tumbles, gadget-loving Japan goes for second-hand iPhones

  • The Japanese currency’s fall to a 32-year low against the dollar has squeezed consumers and accelerated a broader spending shift in the world’s No 3 economy
  • Sales of used smartphones grew nearly 15 per cent in Japan to a record 2.1 million in the last financial year and are likely to reach 3.4 million by 2026
Apple

For years, Japanese shoppers eagerly shelled out for the latest gadgets, but now a tumbling yen has put new iPhones out of reach for some and sparked a growing second-hand trade in a major market for Apple.

The Japanese currency’s fall to a 32-year low against the US dollar has squeezed consumers and accelerated a broader spending shift in the world’s No 3 economy. Industry watchers said Japan’s shoppers have become more open to buying second-hand, thanks in part to the rise of online auction sites.

In July, Apple hiked the price of the entry-level iPhone 13 by nearly a fifth. The basic iPhone 14 later debuted at 20 per cent more than the iPhone 13 did, even as the US price stayed flat at US$799. While the dollar has surged against global currencies this year, the yen has been particularly hit, dropping 22 per cent.

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Salaryman Kaoru Nagase wanted a new phone but could not justify the price of a iPhone 14, which starts at 119,800 yen (US$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 for 10 years,” he said. The iPhone SE 2, released in 2020 but without the dual rear camera of the iPhone 14, was a “good balance” of cost and features, he said.

Apple declined to comment for this story. But in an annual regulatory filing last month, it said Japan sales fell 9 per cent in the year ended September 24 due to the yen’s weakness.

Apple chief financial officer Luca Maestri also acknowledged to analysts last month that the strong dollar had led to price increases for its products in some countries, but sales had still grown by double digits in Indonesia, Vietnam and other markets facing currency challenges.

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

A clerk shows a used iPhone to customers from Thailand in Iosys Corp’s shop selling used smartphones at Akihabara electronics district in Tokyo, Japan October 28, 2022. Photo: Reuters

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

“Up until now I’d only ever bought new phones, this is my first time buying used,” the 23-year-old said. “The new models are expensive.”

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

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

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

The smartphones 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 overseas, depending on where the best prices are, Inoue said.

A worker tests used iPhones at an operations centre of Belong, a unit of trading house Itochu Corp. Photo: Reuters

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

With Japan open again to foreign tourists, the second-hand iPhone market is getting another boost. Retail chain Iosys Co has seen a surge in foreign tourists buying used iPhones in the last two months.

“The yen just keeps weakening,” said Iosys executive Takashi Okuno. “That trend of visiting Japan and buying an iPhone is coming back.”

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