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Why Japan Matters to Apple

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Apple opens more stores in Japan

In March, Apple’s (AAPL) retail executive Angela Ahrendts revealed a five-year investment plan for Japan. It includes increasing and modernizing Apple’s retail locations there. Apple recently opened two new retail locations in Japan. An extensively renovated store was scheduled to reopen on October 26 after 11 months of remodeling.

Apple is set to end 2018 with nine stores in Japan, up from seven in 2017.

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Apple’s Business Chat launches in Japan

In addition to opening stores, Apple has also been increasing its service offerings in Japan. Earlier this month, it introduced its Business Chat feature in Japan, which followed the exclusive launch in the United States this year. Business Chat can be compared to Facebook’s Messenger app. It lets businesses set up a way for customers to communicate with them directly through Apple’s messaging platform.

In the United States, where the feature rolled out initially, Apple’s Business Chat has been adopted by American Express, Wells Fargo, Home Depot, and T-Mobile (TMUS), which was the fastest-growing wireless provider in the United States in the recent quarter. Apple gained 1 million postpaid customers in the June quarter, beating Verizon (VZ) and Sprint (S), which gained 530,000 and 120,000 postpaid customers, respectively. AT&T (T) gained 73,000 postpaid subscribers.

5G network development

Japan is a key market for Apple. Its revenue from Japan grew 7% year-over-year to $3.9 billion in the third quarter of fiscal 2018, which ended in June. Japan is one of the countries that’s racing to build a nationwide 5G (fifth-generation) network, which, coupled with Apple’s expanding retail footprint, could help expand the market for its hardware and service businesses in the country.

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