Only 40 percent of Japanese mobile users are planning to replace their handsets soon, a figure that is down 25 percent points from one year ago, according to an annual mobile-usage survey by the industry group CIAJ. The renewal cycle was four months longer than last year’s figure, reaching almost three years.

This is the first time the percentage considering a new phone has dropped below 50 percent since 2011. The survey also found less interest than last year in decisive features for new phones, such as waterproof protection, size or operating system. At the same time, there was more interest in carriers and services.

Japanese consumers surveyed also showed a high degree of awareness of 5G, with over 70 percent recognizing the term and 30 percent understanding what it is. Interest was shown in 5G-supported services such as 4K/8K video (96.2 percent), downloading movie-length videos in seconds (74 percent) and virtual games using AR/VR technologies (69.9 percent).

The survey polled over 1,200 people who owned a total of 1,552 devices. More than 96 percent of respondent said that their main device was a smartphone. Only a third said they used multiple devices, down from 44 percent a year ago, and these were tablets in nearly 80 percent of the cases.

Tarifica’s Take

The results of this survey in Japan are quite interesting. On the one hand, we see interest in phone replacement at a historic low, while on the other hand there is clearly a good deal of positive anticipation of 5G service. These two trends might appear to be contradictory, but that is not necessarily the case.

As long as service comes via 3G and 4G/LTE networks, consumers, even in a very technologically sophisticated market such as Japan, appear to be quite happy with their current devices and relatively unwilling to spend money on a new one. That is likely because they do not perceive any (or enough) shortfall in their devices’ capacity to access the full range of what current networks can provide in terms of speed and signal consistency, and also because the current smart devices provide enough or more than enough in terms of features. The added cost of upgrading, then, does not seem to be merited. High-end features are widespread across most price points of devices, so replacing one’s device with the latest, greatest and most expensive smartphone is simply seen as unnecessary.

However, the picture may change when 5G service becomes widely available. Since accessing the next-generation networks will require specially compatible devices, consumers can be expected to upgrade then, if they are in fact desirous of enjoying the advertised advantages of 5G. According to this survey, Japanese users do indeed show a fairly good degree of awareness of what 5G is, and a more-than-good degree of interest in its benefits when informed of such. Therefore, the onus will be on mobile operators to make sure than when they offer 5G across the broad market, they make it as easy as possible for their customers to get 5G devices. That means keeping prices down by subsidizing and conducting informative marketing campaigns. Getting devices into the hands of as many users as they can will be key to optimizing use of 5G networks. The good news is that in Japan, it may not be as much of an uphill battle as it may appear on the surface.