Why Isn’t Apple the First Choice for Japan’s Largest Carrier?

JapanJapan’s NTT DoCoMo (NYSE:DCM) still refuses to offer Apple’s (NASDAQ:AAPL) iPhone despite having the slowest growth rate of the nation’s three biggest carriers reports Bloomberg. Instead, DoCoMo has intensified its promotional efforts on two handsets; Sony’s (NYSE:SNE) Xperia A and Samsung’s (SSNLF.PK) Galaxy S4.

Although DoCoMo is Japan’s largest wireless carrier with over 60 million subscribers and approximately 45 percent of the Japanese market, users are joining its network at a slower rate than they are at competitors that offer the iPhone. According to Bloomberg, rival Japanese carriers KDDI and SoftBank added 225,000 and 254,500 subscribers in July, respectively. DoCoMo only added 172,500 subscribers during the same time period.

However, DoCoMo is reluctant to carry the iPhone because Apple’s iTunes Store would be a direct competitor to DoCoMo’s own integrated services and products business. DoCoMo includes many embedded features on its handsets that would clash with Apple’s holistic approach to its iOS ecosystem.

DoCoMo may also be concerned about the restrictive conditions that Apple imposes on carriers of the iPhone. Chief Financial Officer Kazuto Tsubouchi indicated that DoCoMo may be interested in carrying the iPhone if sales of the device were limited to less than 30 percent of the carrier’s total handset sales reports Bloomberg.

In the meantime, the Japanese carrier is focusing on alternative smartphones from Apple’s competitors. “To win against the iPhone, we have to offer a model which is generally easy to use. Sony’s brand and Xperia’s image are just as good as the iPhone,” stated Tsubouchi via Bloomberg.

Here’s how Apple has traded so far this week.


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