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.
It seems too much of a good thing really can be bad.
[Via: Yahoo]