Can the iPhone 12 accelerate 5G’s lagging rollout in Japan?
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It’s that time of year again — new iPhones are on the way.
Apple Inc. on Tuesday unveiled its iPhone 12 series, the company’s first phones capable of connecting to ultrafast 5G networks.
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As the iPhone enjoys a sizeable chunk of the market in Japan, optimists might imagine that Apple’s entrance into the world of 5G will boost the rollout of the networks in the country, which is lagging behind other tech-advanced nations such as the United States, China and South Korea.
But others aren’t so sure.
Currently, there is hardly any content that takes full advantage of 5G’s tech merits — such as ultrahigh resolution video services and richer augmented reality games. And the network coverage nationwide is extremely limited, meaning it may not motivate users to leap into 5G, industry experts said.
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This is unlikely to change immediately even after the debut of the 5G iPhones, and the latest handsets could face a tougher time than usual to penetrate the market due to subdued consumption amid the pandemic.
“Unless there are apps or other potentially killer content for 5G smartphone users, I don’t think the use of 5G will spread fast just because iPhones become 5G ready,” said Hideyuki Asakawa, senior manager at the Japan Research Institute.
The new iPhone 12 series comes in four models — iPhone 12 Pro Max, iPhone 12 Pro, iPhone 12 and iPhone 12 mini. Two models — the pro and the basic model — are scheduled to hit the market later this month. The other two will be available next month. The phones will be available through NTT Docomo Inc., KDDI Corp., and SoftBank Corp.
On paper, the 5G network offers superior performance with high-speed data transmission and low latency connectivity. The target latency rate via 5G is just 1 millisecond, 10 times faster than 4G, while data transmission speeds are up to 100 times faster.
More elaborate augmented or virtual reality games, superhigh resolution videos and live broadcasts employing multiple cameras, are often seen as examples of what the future may hold for entertainment in the 5G era.
But at this point, there is not a lot of content that users can enjoy that makes good use of 5G, other than being able to download large video files at high speeds.
And it’s not just the content that isn’t ready.
Coverage in Japan is still so limited that there is very little chance that users will get a 5G signal unless they research coverage areas beforehand.
The three megacarriers — NTT Docomo, KDDI and SoftBank — launched their 5G network services in late March. Rakuten Mobile Inc., which has newly entered a market dominated by the three carriers, launched its 5G service late last month.
But the speed of network development is falling behind other advanced countries including the United States, South Korea and China.
The U.S. and South Korea launched 5G networks about a year earlier than Japan. The number of 5G subscribers in South Korea has reached more than 8.6 million, according to recent media reports, citing data released by the government. South Korean carriers had reportedly installed 115,000 5G base stations as of spring.
NTT Docomo said in August that its number of 5G subscribers had risen to around 240,000, while KDDI and SoftBank have not disclosed their numbers. Docomo plans to have 20,000 5G base stations installed by the end of March 2022. KDDI and SoftBank are aiming for 50,000 each by sharing existing 4G frequency bands and base stations for 5G, allowing them to expand their coverage area faster, although the network speed will be slower than higher-frequency 5G networks.
In comparison to its Asian rivals, the development of 5G network infrastructure is quite slow in Japan, said Kosei Takiishi, analyst at Gartner Japan.
“Competition among the domestic carriers is expected to heat up in the 5G field from now on, so I think they will probably speed up the deployment of base stations,” but it will take a while to catch up to South Korea and China, Takiishi said.
Executives of the top domestic carriers admit that they have to accelerate the development of their networks.
“Other countries are moving really fast compared to Japan. We will be one lap or two laps behind if we don’t do anything,” said KDDI President Makoto Takahashi during a news conference last month.
Takiishi said widening 5G coverage takes time and costs a lot because high-frequency 5G signals do not travel long distances, requiring the carriers to set up more base stations with new technology.
Although the network and content are still in development, domestic carriers will be aiming to sell 5G handsets to consumers with the help of the new iPhones.
The state of Japan’s smartphone market is in stark contrast to many other countries, as Apple has enjoyed the largest share for years, even though Google’s Android operating system has a much larger presence globally.
According to MM Research Institute, Apple dominated the Japanese market with a 45.5% smartphone share in fiscal 2019 followed by Sharp, which uses Android for its smartphones, with 12.5%.
Asakawa of the Japan Research Institute, however, said Apple may struggle to win the hearts of the average consumer this time around.
Because of the COVID-19 pandemic, “consumption has been subdued and people’s cycle to purchase new phones has become longer, like once every four years,” said Asakawa.
On top of cooled-down consumption, the government is now setting a ¥20,000 cap on handset discounts, so the financial burden can be heavy for those who want the latest cutting-edge smartphones, which can cost over ¥150,000.
In the past, carriers offered more generous cashback incentives, especially for users switching over from a rival. But the government ordered the carriers to refrain from giving out excessive incentives to such users because it was unfair to subscribers who remain loyal to a certain carrier.
Asakawa added that avid iPhone fans will still buy the new models, but considering the current economic situation, “I don’t think it will motivate consumers to purchase the new smartphones.”
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