Japan Passes US as Top App Spender on Smartphone Penetration

TOKYO, Japan — Japan surpassed the U.S. as the top-grossing market for apps in October as use of smartphones surged and wireless carriers started billing customers directly for downloads from Google Inc.'s online store.

App revenue in Japan more than tripled from a year earlier boosted by games as Google Play closed the gap with Apple Inc.’s iOS store in Japan, defying the trend seen in the rest of the world, according to a Dec. 11 report from researcher App Annie. Downloads were also boosted by NTT Docomo Inc., the country’s largest mobile-phone operator, which began offering the iPhone in September.

Japanese consumers are quickly adopting smartphones, after previously lagging behind other markets, with 42 percent of the population using the devices in 2013 compared with 28 percent a year earlier. That proportion is expected to jump to 62 percent in 2014, outpacing the 50 percent penetration rate estimated for the U.S., App Annie said.

“Japanese are accustomed to spending money on mobile phones,” said Hiroshi Naya, an analyst at Ichiyoshi Research Institute Inc. based in Tokyo.

Consumers in Japan have traditionally relied on cash rather than credit cards for purchases. In 2011, Google introduced carrier billing with Docomo, KDDI Corp. and SoftBank Corp. that allowed apps downloaded through Play to be added to customer phone bills which helped spark downloads, App Annie said.

Docomo added the iPhone in September, becoming the last of Japan’s three national wireless carriers to offer the handset. The company had resisted selling the device because Apple’s iTunes store competes directly with Docomo’s dmarket.

By Takashi Amano; Grace Huang assistance from Kurt Schussler. Editors: Aaron Clark, Robert Fenner