Apple 2.0

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Why Japan will have to wait for the iPhone

December 18, 2007: 7:29 AM ET

picture-43.pngCiting "people familiar with the situation," the Wall Street Journal reported Tuesday that Apple (AAPL) CEO Steve Jobs recently met with NTT DoCoMo president Masao Nakamura to talk about bringing the iPhone to Japan. (link; subscription required)

Japan's No. 1 mobile operator would seem a logical choice to carry the iPhone except for one thing: as Engadget notes, DoCoMo doesn't run a GSM/EDGE network. Japanese consumers hoping for an iPhone would have to wait for the 3G model, not due out before mid-2008.

Demand for the iPhone in Japan is expected to be high. According to the Journal, its 100 million mobile-phone users buy new models every two years. Apple's products are already popular there. The iPod and iTunes have dominated Japan's MP3 market since 2005 (see here). Mac sales in Japan have grown slowly in recent years, where smaller laptops are preferred, but according to several reports (see for example here), Leopard is selling rapidly. The thin Macs many expect to be unveiled at MacWorld should do well in Japan.

Apple is also reported to be talking to Japan's No. 3 carrier, Softbank, about carrying the iPhone. Although Apple's revenue-sharing demands are said to be, as usual, a sticking point in negotiations, the Journal's source doesn't expect Apple to have much difficulty coming to an agreement with one operator or another.

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Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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