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What Apple Can Learn From Nokia

By Tim Beyers - Updated Apr 5, 2017 at 8:05PM

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The Finns leave Japan. Will the Steves leave, too?

Nokia (NYSE:NOK) is leaving Japan. Apple (NASDAQ:AAPL) could be next if it isn't careful.

On Thanksgiving here in the U.S, the Finnish mobile-phone maker said that it would end marketing activities and stop selling phones in Japan. "In the current economic climate we have been forced to sharpen our business focus," a Nokia spokesperson told Forbes.

Only Nokia's "Vertu" phones will remain on sale there. Vertu is a high-end line of mostly handcrafted phones that sell for between $5,000 to $10,000, Forbes reports. Vanity phones, you might call them. Picture the gold, diamond-studded Samsung handset that aided in casino operator Willy Bank's downfall in Ocean's 13.

If you're thinking that most Japanese can't spare five grand for a bling-bling ring-ring, I'm with you. But they ignored nearly all of Nokia's gear, including low-cost models that have proven hugely popular in India. With a 1% share of the Japanese market, Nokia never found the sweet spot.

Apple found it once, at the iPhone's launch in Japan, but not since. "The iPhone is a difficult phone to use for the Japanese market because there are so many features it doesn't have," Eimei Yokota, an analyst with MM Research, told The Wall Street Journal in September.

He's referring to, among other things, digital TV -- a common feature for Japanese smartphone consumers, the Journal reports. Here, we're still hoping that Netflix (NYSE:NFLX), Amazon.com (NASDAQ:AMZN), or Apple will figure out how to stream to the small screen.

That's because Japan's mobile market is more mature than ours. But its PC market isn't much better. Here, too, Apple had had intermittent success:

Fiscal Year

Mac Unit Sales

 

Growth (YOY)

2008

389,000

29%

2007

302,000

(1%)

2006

304,000

(3%)

2005

313,000

8%

Source: SEC filings.

At least Mac sales are finally blossoming; iPhone sales have trailed off since a July launch. Talk then was of Apple selling more than 1 million handsets in Japan. Now, the Journal reports, analysts estimate there will be fewer than 500,000 sold.

"Japanese users don't know what to do with an iPhone," Takuro Hiraoka, an analyst for GfK Marketing Services Japan, told the Journal, referring to the thousands of add-ons available in the App Store. "Sales could grow if Apple provides specific examples of how it can be used."

There's your wake-up call, Apple. Put on some tea and think differently about Japan.

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Fool contributor Tim Beyers had stock and options positions in Apple and a stock position in Nokia at the time of publication. The Motley Fool's disclosure policy would rather you sent it a text message than a voice mail. Voice mail is sooooo five seconds ago.

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