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NTT DoCoMo to sell iPhone in Apple stronghold Japan: sources

A man walks past the logo of Japan's biggest mobile phone operator NTT Docomo at its shop in Tokyo in this July 3, 2013 file photograph. REU
A man walks past the logo of Japan's biggest mobile phone operator NTT Docomo at its shop in Tokyo in this July 3, 2013 file photograph. REU

By Sophie Knight

TOKYO (Reuters) - Japan's biggest mobile carrier NTT DoCoMo Inc is expected to start selling iPhones as soon as autumn, helping Apple Inc extend its reach in a country where it has more than three times the market share of rival Samsung Electronics Co Ltd.

DoCoMo has long resisted offering the iPhone to its 60 million customers due to differences with Apple over branding and sales margins, but has lost market share to smaller rivals Softbank Corp and KDDI Corp, which have been selling Japan's best-selling smartphone since 2008 and 2011, respectively.

DoCoMo is expected to begin selling the iPhone as early as this autumn, people familiar with the matter told Reuters.

The sources, who declined to be named due to the confidentiality of the discussions, did not detail the conditions of the agreement.

Other sources have said sticking points between the two companies were DoCoMo's requirement that its logo to be imprinted on all the phones it sells, while Apple insists its products are sold unaltered.

Market watchers have also speculated that the U.S. tech giant demands that iPhone sales make up more than 50 percent of a carrier's total handset sales, while DoCoMo has said it is only willing to go up to 20-30 percent.

Asked about the iPhone deal, DoCoMo said in a statement that it had nothing to announce on the matter. Apple could not be immediately reached for comment.

Analysts said both companies had probably struck a mutually beneficial compromise.

"It's possible Apple were more flexible with DoCoMo because obviously it's a large carrier and it's somewhere they could get new unit volumes to come through," said Nathan Ramler, head of Asia telecommunications research at Macquarie Capital Securities in Tokyo.

The Nikkei business daily, which first reported the news, said an announcement was likely to come next week, when Apple unveils the latest version of the iPhone on September 10 in the United States.

Japan is an important market for Apple, which is facing tough competition from Samsung's Galaxy series and other devices that use Google Inc's Android platform.

More than a quarter of all smartphones sold in Japan are iPhones, according to Tokyo-based IT consultancy MMD, while Apple had a 13 percent global market share in the second quarter of this year.

DoCoMo plans to offer winter promotions on handsets made by Sony Corp, Sharp Corp and Fujitsu Ltd.

With Blackberry Ltd having decided not to offer its latest Blackberry 10 and the models that support it in Japan, pressure from corporate clients mulling a switch to the iPhone may have been another factor spurring DoCoMo to make a decision.

"The enterprise customers are definitely important for DoCoMo," said Macquarie Securities analyst Ramler. "And we've seen Apple working hard to improve its corporate solution with the iPhone, so it's possible that was part of the consideration as well."

Shares in Softbank, the first Japanese carrier to offer the iPhone, fell 2.5 percent, while KDDI dipped 0.2 percent. DoCoMo gained 0.5 percent after opening up more than 3 percent. The benchmark Nikkei average fell 1.5 percent.

(Reporting by Maki Shiraki and Nobuhiro Kubo; Editing by Chris Gallagher and Miral Fahmy)

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