• Facing market distortion from extreme discounting, Japan introduced stricter subsidy rules in late 2023 to stabilize smartphone pricing.
• Japan’s revised subsidy rules aimed to curb excessive carrier discounts, but have further reinforced Apple’s dominance in the premium segment.
• The “Net 1-yen” model and RMJ-based pricing system favor iPhones with strong resale value, making it harder for other brands to compete in the Premium segments.
• Both the low-end and high-end segments are gradually expanding, as low-end models benefit from fewer restrictions and Apple continues to dominate the premium segments.

Japan’s efforts to regulate excessive smartphone discounts were meant to create a fairer market, but they’ve ended up making conditions even more favorable for Apple.

In late 2023, Japan’s Ministry of Internal Affairs and Communications (MIC) enforced stricter discount rules to eliminate extreme offers such as “1-yen phones.” Yet the new environment has amplified Apple’s competitive advantages. iPhones’ strong resale performance makes them ideal for “effective 1-yen” promotions, where users return the device after a fixed period and pay very little overall.
Beginning in 2025, the resale price benchmark was revised to rely on Reuse Mobile Japan (RMJ) data. Under this system, Android and Chinese OEM devices are now being assessed at lower values than before, reducing their trade-in benefits and raising end-user costs. Instead of competing head-to-head with iPhones in the premium segment, Android and Chinese brands are increasingly shifting their focus to lower-end models that fall outside the scope of government subsidy rules. This shift has reduced choices in the mid-range segment.

Japan’s premium smartphone market ($800+) grew by 14% YoY from 2023 to 2024, yet Apple still commands an overwhelming 92% share, fueled by its advantageous trade-in values and marketing structure.

While excessive discounting has been curbed, the new regulations have also unintentionally narrowed consumer choice. A more balanced policy approach may be needed to preserve competition across price tiers.

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