Japan facing continuing deflation woes due to mobile phone price wars
By Will Park on Thursday, October 4th, 2007 at 2:54 PM PST In Announcements, DoCoMo, Financial/Corporate News, KDDI, Services
When do low prices on mobile phones and service actually hurt consumers? Well, for Japan, the continuing decline of mobile phone prices is putting the hurt on the island-nation’s economy. With 100 million mobile phone users, Japan’s top mobile phone manufacturers and carriers are engaged in a months-long battle to entice wireless customers into their side of the ring. The biggest weapon is the slashing of the price of hardware and service.
The price-war has had a negative effect on Japan’s economy – namely on the Consumer Price Index (CPI). The country has been struggling to escape deflation’s strangle-hold for the past several months. And it looks like Japan is going to have to deal with another month of deflation and falling prices/CPI.
The Ministry of International Affairs and Communications, which compiles the CPI, has yet to decide how to deal with the expected 30% price cuts from the nation’s top two mobile phone providers – KDDI and NTT DoCoMo (NYSE: DCM).
It seems too much of a good thing really can be bad.
[Via: Yahoo]
