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SoftBank profit cut in half through iPhone war with KDDI

updated 07:25 pm EST, Thu February 2, 2012

SoftBank profit drops through iPhone discounts

SoftBank on Thursday said its fall quarter profit was cut in half from a year ago owed to demand for, and competition over, the iPhone 4S. It made the equivalent of $430.8 million in profit versus $858.8 million in late 2010. The company had spent nearly $393.4 million in promos to prevent customers from jumping to KDDI now that it was an iPhone provider, a feat which president Masayoshi Son said turned out wasn't necessary.

Only 50,000 iPhone owners actively jumped from SoftBank to KDDI, he said. It had braced itself for as many as one million. Instead of spending on promotions, it would roll future money into upgrading the network to make that the primary incentive to stay onboard.

Pure revenue was up 10 percent to about $11.3 billion.

Apple's effect was apparent in the average revenue per person, which climbed to just over $33 as more customers signed on to smartphone-level cellular plans. SoftBank also carries Android phones, but it was the only Japanese iPhone provider for three years and has seen the iPhone dictate much of its higher-end business.

The rush at SoftBank, along with KDDI's own success, points to growth in Japan mostly coming at the expense of Android and basic feature phones. They weren't necessarily switching platforms, but many Japanese are still upgrading from traditional "keitai" cellphones and could lock Google out by picking an iPhone first. Of the major carriers in Japan, only NTT DoCoMo and much smaller eMobile have no iPhone option, though they are compatible. [via Wall Street Journal]



By Electronista Staff
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Comments

  1. patrix

    Junior Member

    Joined: Sep 2006

    +1

    different network technology?

    uh what? DoCoMo was the first to use HSPA (3G), and iphone is perfectly compatible. They even started manufacturing microSIM cards to get unlocked iPhones on their networks, then gouged them with paying double for data because unlocked iPhones can tether and so needed to be put on the tethering plan.

    As for eMobile, it's also using WCDMA HSPA, same as DoCoMo, Softbank, and many other operators. 100% compatible with the iPhone.

    Mainly it was DoCoMo's CEO insistance on adding a million preloaded apps on the iPhone that got DoCoMo not to get it.

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