Paul Lester wrote:
> The weaker conglomerates (JPhone, TuKa and KDDI) offer
> subsidized phones. DoCoMo on the other hand does not do this
> and they have the biggest market share.
>
DoCoMo DOES offer subsidized handsets. The retail price the consumer pays is
considerably lower than what DoCoMo pays to handset makers for the handset bulk
wholesale.
> Also the highly subsidized phones are always older models, often
> 9-months to over a year behind the current technology.
Also not true. Even the very latest models are subsidized as a way to drive
customers to take up the latest revenue-driving value-add services.
> (By selling them cheap they save money by not having to
> destroy the older models). If they did not give the phones
> away in exchange for getting new customers, the phones
> would be scrapped. In this way the "subsidized phones" are not
> a way to get customers to pay for the original phone, but instead
> a way to make money out of something that should be scrapped
> and burned. (Much like the Wal-marts in the US).
>
No, subsidized handsets are a way to
1 - attract new customers
2 - encourage old customers to use newer value-add services
> As in other countries, the cheap phones are the result
> of mass production turned into overproduction.
>
Japan's telcom industry (at least DoCoMo) is also often the victim of
under-production. For example Sony was unable to keep up with demand for their
latest SO503i handset. The cheapest phones on the market are the result of a high
churn rate; with new models every 3 months, any handset more than 1-2 cycles old
is out-dated.
Besides which, DoCoMo shops do not sell heavily discounted handsets even for older
models; 3rd party resellers (like HitShop, Bic Camera, etc.) sell extremely
discounted (older and newer) model handsets but they're reimbursed from DoCoMo in
some manner b/c they're increasing subscriber numbers. So it's actually DoCoMo
that takes the loss on discounted handsets no matter where they're sold, all in
the name of increasing subscriber numbers and/or getting users to use the latest
services which add more revenue per user.
r e n
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Received on Mon Jul 30 10:41:23 2001