As We All Say Old Is Gold-Flip phones make a comeback in Japan, smartphone sales shrink

TOKYO: Japanese shipments of traditional flip-
phones rose in 2014 for the first time in seven
years while smartphone shipments fell,
highlighting Japanese consumers' tenacious
attachment to the familiar and typically less
expensive older models.
Dubbed "Galapagos" phones because they have
evolved to meet unique Japanese standards and
tastes, flip-phone shipments rose 5.7% to 10.58
million in 2014, data from market researcher
MM Research Institute Ltd shows. Smartphone
shipments fell 5.3% to 27.70 million, down for a
second year.
Users in Japan pay some of the highest
smartphone fees among developed nations, the
telecommunications ministry says, while flip-
phone rates are among the lowest. Many
Japanese accustomed to years of deflation are
content with old-style flip-phones offering
voice calling, email and in most cases basic
internet services.
Japanese electronics companies Panasonic Corp
and NEC Corp have pulled out of the consumer
smartphone business, unable to compete with
dominant brands Apple Inc and Samsung
Electronics Co Ltd. They still make flip-phones,
though, competing in a crowded market with
Fujitsu Ltd and Sharp Corp, among others.
But with a mobile penetration rate of 98.5%, or
125 million subscriptions, there is little scope
for significant overall growth in Japan's mobile
market, MM Research said. "Smartphones are
also peaking in terms of functionality and they
tend to last a long time as well, so there are
fewer renewals," said MM Research Executive
Analyst Hideaki Yokota. He said 2014 was a
particularly strong year for renewals in the
subscription cycle for flip-phones, suggesting
that last year's growth may not be repeated
this year.