Thanks to the recent explosive growth in popularity for smartphones in Japan, both smartphone devices and applications are attracting more attention in Japan’s business and consumer markets. Although the penetration rate of smartphone devices is still relatively low, unit sales in 2008 reached 1.6 million units, a 68% increase from the previous year. From 2009 to 2012, the annual growth rate for the Japanese smartphone device market is predicted to increase between 20 and 30%. There is also demand among Japanese mobile service operators for more smartphone software choices as a means to gain market share and increased average revenue per unit (ARPU). For U.S. firms interested in the Japanese market, market-proven business applications for smartphones are in particularly high demand. Japan possesses a good foundation for the smartphone applications market since there is increasing demand for programs that enable users to do office work anywhere on mobile devices.
Smartphone handset shipments are still small, only 2% of the total mobile phone market in Japan compared to 17% in the United States. However, mobile service operators are expecting smartphones to create new business opportunities since the current non-smartphone mobile market is reaching a saturation point. According to a recent Japanese Government survey, the household penetration rate for mobile phones was 90.5% in 2008.
Existing traditional models lack strong replacement benefits and the upgrade cycle for these mobile phones tends to be longer so leading local service operators such as NTT DoCoMo or au (KDDI) are expecting more smartphone demand within the Japanese business sector. As smartphones and smartphone operating systems are capable of being used “ubiquitously” (i.e. being used everywhere at all times), more enterprises will likely extend their in-house applications to the mobile environment and the demand for business applications for smartphones is therefore expected to increase. For example, mobile Software as a Service (SaaS) for customer relationship management (CRM), enterprise resource planning (ERP), sales force automation (SFA), or other enterprise solutions may be of interest to the business sector. See Chart 2 for potential smartphone business applications.