You know times are hard when Japanese start giving up their cell phones! The number of cell-phone shipments in Japan have dropped by nearly half since last year, according to a recent industry report. That is no small drop since Japanese cell-phone users are estimated to be over 110 million, or about 87 percent of the population. Without constant demand, the cell-phone industry, like many others, could be in for difficult times.
Loud conversations and pandemic use of cell phones is not likely to abate anytime soon, though. Roughly 1.8 million new cell phones were shipped last year even as the economy worsened. That’s still a lot of cell phones, old or new — evidence enough of how deeply integrated cell phones have become in the everyday life of Japan.
Japanese consumers may simply be accommodating themselves to tighter budgets and to discriminating feelings about one of their most prized possessions. The recession may give Japan’s insatiable consumers a chance to catch their breath and let an oversaturated market cool down a bit. That may not be so bad, all things considered, but it has effects on other parts of the economy as well.
The cell-phone industry is not a small one. The ministry of communications estimates that business carried out on cell phones was worth over a trillion yen in 2007. Cell-phone music downloads alone were worth some ¥75 billion in 2007, according to one industry analyst. Although sales did expand last year for phones with “one-seg” functions, which allow cell-phone users to watch TV and other broadcasts, the overall direction was down.
Japan has long been considered a testing ground for the interface between new cell-phone technologies and evolving consumer desires, but consumer priorities can shift suddenly and unpredictably. When that happens, greater demands are placed on marketers to provide new services and products at new rates. Japan may not yet be entering a communication recession, but the cell-phone industry, like other areas of the economy, has clearly hit a speed bump in its rush toward the future.
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