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
> 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
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