Japan Said to Be Eyeing Rating System for Used Smartphones

Japan's communications ministry and the used smartphone industry are considering a system for ranking used smartphones so that consumers will be able to determine their quality and more easily purchase them, The Yomiuri Shimbun has learned. The effort is aimed at expanding the distribution of secondhand smartphones.

They plan to establish a study panel soon and compile private guidelines as early as October to enable consumers to buy used smartphones free from worry, according to sources.

If the used smartphone market expands, the burden on consumers from the costs of purchasing smartphones and communication fees is expected to decrease, the sources said.

Industry groups comprising Tsutaya Co., Geo Corp. and other businesses that sell and buy used smartphones, as well as those comprising businesses that repair them, will participate in the study panel.

They will discuss a rule in the private guidelines calling for labelling the quality of smartphones according to grades such as "S," "A" and "B," based on damage or battery status.

The rule takes into consideration consumers' preference for new products and the relative lack of people purchasing used ones.

The study panel intends to include in the guidelines a rule to ensure that individual information and data in smartphones is completely deleted. The rule takes into account concerns about the handling of data and will help consumers feel more confident about selling used smartphones to secondhand dealers.

According to a survey company, the scale of Japan's used smartphone market was in the 1.4-million-unit range in 2016, significantly smaller than Britain's market that same year, which was in the 9-million-unit range, and North America's market in 2015, which was in the 13-million-unit range.

Japan's three major mobile phone companies, including NTT Docomo, have introduced a system in which they reduce the cost of new smartphones when consumers trade in their used products. The traded-in smartphones are thought to be discarded or sold overseas through middlemen, not distributed domestically. This is why Japan's used smartphone market is small.

If the used smartphone market expands, consumers could possibly sell their smartphones to secondhand dealers at higher prices than the trade-in discount offered by major smartphone companies. In addition, the distribution volume would increase and consumers would be able to purchase quality used smartphones at discount prices.

The Internal Affairs and Communications Ministry supports the spread of used smartphones because it aims to increase the number of consumers who make a contract with discount smartphone operators and use secondhand smartphones.

In Japan, where the market is largely dominated by three major mobile phone operators, many consumers feel that communications fees are still high.

However, because the size of discount operators that reduce communication fees is small, they have difficulty stocking new models of US firm Apple's popular iPhone, which has hindered their efforts to increase contracts.

Consumers who purchase discount smartphones from secondhand dealers can make a contract with discount operators to use the phones. The ministry believes that if the number of people with contracts with discount operators increases, competition will increase and the communication fees of major operators will drop.

© 2018 The Japan News