In Japan, iPhones are now free

February 26, 2009, 6:08 PM UTC

The price of an iPhone in Japan can’t get much lower than this.

Starting Friday, Softbank Mobile, the exclusive carrier of Apple’s (AAPL) smartphone in Japan, will give anyone who signs a two-year contract a free 8GB iPhone 3G. If customers prefer the 16GB model, that will cost them $118 (reduced from $350).

Writing for CrunchGear, Serkan Toto reports that SoftBank Mobile’s data plan is also being discounted from $62 to $45.60 per month for both new and existing subscribers, a move he attributes to weak iPhone sales in Japan.

[Reader Kidong Yun points out that even at the reduced data rates, Japanese customers still pay nearly $150 a month for iPhone service, roughly double what users pay in the United States.]

The promotion is scheduled to end in May. It follows a data plan price cut in August — less than a month after the iPhone’s Japanese debut.

Toto, a marketing consultant based in Tokyo, had predicted that Apple might have trouble getting traction in Japan’s highly competitive cell phone market. In June, he posted 10 reasons why Japan will hate the iPhone (or maybe not). To get a feel for how the iPhone is perceived in Japan, we re-post them below the fold:

1. No One-Seg digital TV tuner

2. No Felica (e-wallet) function

3. Weak camera

4. Only one panel color available

5. Display of cute emoticons,
, is difficult

6. Japanese cell phone contracts are long-term (2 years standard, almost no pre-paid) and expensive to terminate

6. A lot of Japanese already own an iPod Touch (launched in October 2007)

7. Japanese women with long fingernails will not buy it (and there are a lot of them)

8. High-school kids use cell phones mainly for emails using one thumb, a dialpad and a jog dial (ideal for Japanese character input)

9. Softbank will probably charge a lot of Yen for the handset itself, accessories, data plans etc.

10. Japan is the toughest cell phone market in the world

(high level of technical sophistication, critical customers, high innovation rate etc. ) (link)