DoCoMo Savors An Older Vintage

As the young flock to iPhones, the carrier targets elderly Japanese | “They tend to be affluent and loose on their purse strings”

Mariko Yasu and Shunichi Ozasa


The iPhone has become the must-have smartphone for young and hip consumers around the globe. Not for Kazuko Ohara. The 81-year-old Tokyo resident is planning to buy her new handset from NTT DoCoMo, the only major Japanese carrier not selling Apple’s hit product. “I’ve been planning to get a smartphone and try the voice app since I saw it on TV,” says Ohara, who doesn’t own a personal computer. “My eyesight is weak because I had a cataract operation. The voice app might help me write e-mails, and I want to use the map function to go places.”

That’s music to the ears of DoCoMo, which has rolled out specially designed phones and its own voice-recognition software to woo Japan’s fastest-growing demographic: the elderly. The country’s biggest mobile-phone company is counting on older subscribers to regain market share lost to iPhone-peddling rival SoftBank in the $110 billion local wireless market. Two million users have downloaded DoCoMo’s app called Shabette Concier, which, like Apple’s Siri, lets users control their phone by voice — a big selling point among elderly subscribers who struggle with keypads. And a specially designed phone DoCoMo unveiled this spring features on-screen buttons to handle common actions such as writing an e-mail.

DoCoMo is targeting older customers for growth as Japan ages faster than any other developed society, with 23 percent of the population 65 or older. Oldsters there are ripe for updated handsets: Only about 6 percent of Japanese consumers in their 60s had a smartphone as of February, compared with 51 percent of people from 20 to 29, according to Tokyo-based mobile-advertising agency D2C. “Growth for a consumer business in the coming decade relies on cultivating the elderly market,” says Toshihiro Nagahama, chief economist at Dai-ichi Life Research Institute in Tokyo. “They tend to be affluent and loose on their purse strings.”

Elderly Japanese kept spending money last year while younger people pulled back in the aftermath of the earthquake and tsunami. Spending by those older than 69 gained 0.4 percent in 2011 while spending by all other age groups declined, according to the Ministry of Internal Affairs and Communications.

DoCoMo’s share of the 125 million mobile-phone subscriptions of Japan’s three biggest carriers fell to 48 percent as of May 31 from 52 percent four years earlier, while SoftBank’s share jumped to 24 percent from 18 percent, according to the Telecommunications Carriers Association. “DoCoMo has been struggling because of the expansion of iPhones in Japan,” says Shinji Moriyuki, an analyst at SMBC Nikko Securities. “Introducing handsets targeted at the elderly will probably help DoCoMo win back share.”

To stimulate demand among the growing demographic, DoCoMo is holding seminars to teach older customers how to use a smartphone — it held 1,100 training sessions in the year ended March 31 — and is offering discounts on handset models aimed at elderly users.

As early as July, DoCoMo plans to offer a smartphone version of Fujitsu’s hit handset called Raku-Raku, or “Easy Easy,” which has won over more than 21 million users with simplified functions, larger fonts, and a button to connect to a help desk. DoCoMo’s voice app, whose name translates as “Talk to Me, Concierge,” was introduced on March 1 and is available for 38 handset models using Google’s Android software.

People 60 or older account for 24 percent of DoCoMo’s customers. Although the carrier is ahead of rivals in terms of marketing to the elderly, SMBC’s Moriyuki says, “the other two carriers will probably follow DoCoMo. It’s a big business opportunity.”

SoftBank doesn’t offer handset models or services targeted specifically at the elderly, says Natsuko Kameda, a spokeswoman for the Tokyo-based company. Yet KDDI, which holds about 28 percent of Japan’s wireless market and has sold the iPhone since October, says serving seniors is a priority. “We’re trying to lure elderly customers from the NTT group by offering discount rates for those who use both our group’s fixed-phone and mobile-phone services,” says spokesman Keiichi Sakurai.

DoCoMo hopes to raise its total share of smartphone subscriptions back to at least 50 percent in the fiscal year that began on April 1, says Chief Financial Officer Kazuto Tsubouchi. “You can see possibilities of handsets tailored for old people stimulating demand,” says Dai-ichi’s Nagahama. “Japan’s elderly are young in spirit.”

The bottom line People 60 and older make up 24 percent of customers at DoCoMo, Japan’s No. 1 wireless carrier. It’s pushing senior-friendly phones.


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