“Two months after its launch, the latest version of Apple Inc.’s iPhone is showing strong sales around the world — except in Japan,” Yukari Iwatani Kane reports for The Wall Street Journal.

“Apple’s partnership with Japan’s third-largest mobile operator, Softbank Corp., to sell the iPhone 3G certainly created a buzz. Like elsewhere, Japanese consumers lined up at stores in advance of the phone’s release on July 11, and many locations sold out almost immediately. But now analysts estimate that demand in Japan has fallen to a third of what it was initially and analysts are now expecting fewer iPhone sales. There is no supply shortage: The device is readily available in Apple and Softbank stores and other outlets,” Kane reports.

“According to market-research firm MM Research Institute, Apple sold about 200,000 phones in Japan in the first two months. Since then, however, demand has been falling steadily, and analysts now widely believe sales are unlikely to reach a total of 500,000 units. That is half the one million units that they previously thought Apple could sell. One big challenge is that Japanese users already have access to some of the most advanced mobile-phone technologies in the world. Models currently sold by Japanese cellphone makers typically contain a high-end color display, digital TV-viewing capability, satellite navigation service, music player and digital camera. Many models also include chips that let owners use their phones as debit cards or train passes. Noriko Tanaka, a 34-year-old Softbank customer in Tokyo, said she likes the iPhone’s touch screen, but would prefer a phone with digital television capability,” Kane reports.

“One iPhone feature that is unique even to Japanese users is the App Store, Apple’s online clearinghouse for software, such as games and reference guides. The App Store is popular among U.S. users, but hasn’t taken hold as much in Japan, where consumers tend to be more cautious about making purchases online,” Kane reports.

Full article here.

What we have here is, a failure to communicate.

Apple needs to create or add more iPhone expository ads and run them with high frequency in Japan; ads that explain the app store, demonstrate 3rd-party apps, and show off what the iPhone, and only the iPhone, can really do.