Google Pixel is rising, Apple iPhone's market share in Japan falls below 50% for the first time in two years.

According to Dolphin Research APP, as Apple's iPhone becomes more and more expensive, Google's Pixel is eroding the dominant position of the iPhone in Japan. Data from Counterpoint Research shows that in the second quarter of this year, Google's mobile phone market share in Japan reached a record high of 12%, six times that of a year ago. During the same period, the market share of the iPhone dropped from 58% a year ago to 46%.

Japan is the world's third-largest economy, a huge market for mobile software and games, and a key market for these two tech companies. The iPhone dominates in Japan just like it does in the United States, and this summer's decline is the first time in two years that the iPhone's market share in Japan has fallen below 50%.

The depreciation of the yen prompted Apple to raise the price of the iPhone in Japan before the recent global price increase. It turns out that the cost of this phone has deterred some consumers when the latest model does not offer essential new features.

"Japanese users are becoming more practical," said Tom Kang, an analyst at Counterpoint in Seoul. "There are now more opportunities for choice. We see growth in Sony and some other brands, but Google's growth is the most surprising."

The weakness of the yen has also boosted Pixel sales: for consumers outside Japan who want to buy this phone, it is cheap. Pixel is only available in a few countries, and the yen exchange rate has fallen to its lowest level in over 30 years, making Japan the cheapest place to buy this phone.

"Japan is becoming a transit hub for Google Pixel devices," Kang said. "Therefore, the iPhone is affected by the weakness of the yen, while Google benefits from it."

In the foreseeable future, Japanese consumers' increasing sensitivity to prices may drag down iPhone sales. Major mobile operators have cut subsidies to attract customers to sign long-term contracts, and many consumers are turning to independent channels to purchase devices.

Anshel Sag, Chief Mobile Analyst at Moor Insights & Strategy, said, "Google and the Pixel team have achieved tremendous success in Japan." "These devices seem to mostly come from the affordable Pixel 6a and 7a series, which may mean that Google has successfully captured the mid-range smartphone market in Japan." The decline in sales in Japan highlights the challenges Apple is facing. Due to weak demand, the company's sales have declined for the third consecutive quarter, and a similar performance is expected this quarter.

The release of the latest iPhone 15 series by Apple may boost its market share, although the starting price of the iPhone 15 Pro Max has increased by $100 this year after discontinuing the smaller storage versions offered in the past. Google will launch the latest generation of Pixel devices at its event on October 4th.

"Price is becoming an important factor," Kang said. "The loyalty of Apple and iOS users is much higher than that of Android users. However, Android devices always have a price advantage."