NTT DoCoMo: Why Apple iPhone 5s, 5c Release Can’t Stop The Bleeding

on October 07 2013 12:30 PM
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NTT DoCoMo, the largest mobile carrier in Japan, still can’t stop losing subscribers, despite the company's decision to finally add the iPhone to its lineup. Courtesy / Reuters

Even though NTT DoCoMo Inc. (9437:JP) finally added the iPhone to its mobile lineup with the release of the iPhone 5s and iPhone 5c, the largest mobile carrier in Japan still can’t stop losing subscribers. DoCoMo said on Monday it lost 66,800 net users in September, which marks the largest loss on record for the company.

DoCoMo is still dominating the Japanese mobile market -- as of last month, DoCoMo had 61.8 million subscribers -- but its market share slid to 46 percent in September, compared to 52 percent in 2008. Meanwhile, rivals of DoCoMo, including SoftBank and KDDI, added 270,700 and 232,700 subscribers, respectively, in September, as both mobile carriers advertised ample supplies of iPhone 5s and 5c units after both phones’ Sept. 20 release date. KDDI has 39 million subscribers, and SoftBank has 34 million subscribers.

DoCoMo blamed its September loss on an insufficient stock of iPhone 5s and iPhone 5c handsets, according to Atsuko Suzuki, a spokeswoman for DoCoMo. Suzuki also said the marketing strategies of rival carriers also hurt sales. According to Tokyo-based BCN Inc., which compiles data from electronics stores, DoCoMo accounted for 31.9 percent of iPhone 5s and 5c sales in Japan, while KDDI accounted for 28.6 percent, and SoftBank accounted for 39.5 percent.

How Can DoCoMo Compete?

“DoCoMo must offer more incentives for existing users to remain with the carrier,” BCN analyst Eiji Mori told Businessweek on Monday.

Even with the iPhone 5s and 5c added to its lineup, DoCoMo still needs to differentiate itself from rivals in order to maintain its status as the largest mobile carrier in Japan. In the U.S., carriers and retailers tend to offer their own discounts and deals on new smartphones; Wal-Mart and Best Buy offer a $50 discount on the iPhone 5c, while Virgin Mobile USA offers a $100 discount on both the iPhone 5s and iPhone 5c.

At the very least, DoCoMo can improve its advertising, since that was the major complaint from the company’s Monday statement. Even on its website, the iPhone 5s and 5c are marginalized with small stock images of the phone, and only mention two programs, including a Student Program and an iPhone trade-up program. DoCoMo could detail why the new iPhones are best on their particular network, or even offer exclusive deals on iPhone 5s/5c cases and covers when purchasing the phone through the carrier.

The iPhone 5s and iPhone 5c release with more LTE bands than any other smartphone; check out the full list of countries and carriers that have been supporting the new iPhones since their release date on Sept. 20.

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