Tuesday, November 12, 2013

Apple's Surprising Growth in Japan

If someone asks you which country is Apple Inc’s fastest growing overseas market in Asia, you may say it must be China, or India. Surprisingly, the answer is Japan! What’s even more surprising is that Japan also brings Apple’s largest profit margin among all overseas markets. Many people might think that Japan has the least possibility of being the fastest-growing region for Apple. Why? The reasons are pretty obvious. Firstly, Japan is worldly known and popular for its electronic products, which own great reputation, high quality as well as competitive price. Secondly, the country has been facing aging population issue for a while; plus its sluggish economy, the Japanese market seems lacking of purchasing power.

However, the fact is that iPhone is currently Japan’s best-selling smartphone, with a 37% market share in the past six months, which is even higher than the share in the U.S. in the third quarter. In addition, iPad is dominating Japan’s tablet-computer market with more than half market share in the past year. Furthermore, it is reasonable to forecast its even more promising future due to the fact that Japan’s largest wireless carrier DoCoMo, started offering Apple products to its nearly 62 million customers in September, 2013. Obviously, Japanese’s fervor for Apple is similar to how they look at Louis Vuitton bags or Chanel beauty products.

How about other two huge markets China and India? China, the world’s largest Smartphone market, is neither Apple’s fastest-growing overseas region nor largest profit margin market. iPhone currently is only ranking fifth in Chinese market. In India, Apple’s market share is even less than 5%.

Apparently, both traditional and nontraditional factors could affect a product’s success in overseas market. One traditional factor would be pricing. Take China for example, iPhone 5C and 5S are about as twice expensive as what consumers usually pay for alternative products. High pricing deters many potential buyers in Chinese market. While what happened in Japanese market shows how a product can be affected in an nontraditional way. Samsung, the world’s largest Smartphone maker owns huge market shares in Asia; however, it only ranks fourth in Japan. The reasons are subtle and complicated. It either has something to do with history or culture, Japanese consumers hold strong bias against Korean brands, which leads to Samsung’s less popularity in Japan.  

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