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Apple Taking iPhone to Japan

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Apple will launch its popular iPhone in Japan this year, entering one of the world's most advanced mobile phone markets by teaming up with Softbank, the country's aggressive No. 3 operator.

The deal, announced by Softbank, is another push forward by the company that has been growing its share with quirky marketing and price cutting since it bought Vodafone Group's troubled Japan unit in 2006, although it still lags well behind market leaders NTT DoCoMo and KDDI.

Apple is widely expected to announce a new generation iPhone next week, with analysts betting it will run on third-generation mobile networks with their faster Web browsing and data downloads.

Japan already has 3G networks, and improved capabilities in a new model of iPhone are seen by analysts as crucial for its success with customers who are already very heavy users of mobile e-mail and Web browsing.

DoCoMo, which controls just under half Japan's mobile market, has also sought Apple's much-anticipated gadget for its customers and it was not clear whether Softbank would have exclusive sales rights.

"The key question is if the agreement would be exclusive and what kind of (revenue-sharing) agreement Softbank has entered with Apple," Macquarie analyst Nathan Ramler said.

"Apple typically goes with exclusive agreements, so chances are that this will also be exclusive."

Apple's iPod music player is widely used in Japan, but some analysts doubt the iPhone will be as popular, given the advanced state of the mobile market.

The device allows Internet access and plays music, but most mobile phones in Japan have those functions and more -- such as TV viewing and video downloads. The iPhone would be a hard-sell especially if the price is high, they say.

"It's very rare that something popular in the U.S. comes to Japan and captures that much demand here," Shinko Securities analyst Tomohiko Okugawa said.

"Japanese consumers tend to stick to what they liked first. ... It will need to offer something new and surprising to be a hit in Japan."

Spokesmen for Softbank and Apple Japan said they had no further details on the deal. A DoCoMo spokesman said his company had not heard back from Apple after its iPhone talks.

Japan came as one of the last Asian markets where Apple signed deals. In May, the U.S. company announced it would bring the iPhone to Singapore, India, Australia and the Philippines this year.

It also is reported to have picked Hutchison Telecommunications to market its phone in Hong Kong.

For Softbank, which has been trying to boost brand awareness using Hollywood A-listers Brad Pitt and Cameron Diaz in TV commercials as well as a talking dog, the iPhone was seen as a product it was itching to have.

"I think the benefits could go beyond the number of new users it can capture through the iPhone," IDC Japan analyst Michito Kimura said.

"Softbank is no longer able to provide much more surprises in terms of price," he said. "I think this would contribute to their brand, and if they can leverage this, it would work to their advantage."

Softbank on Tuesday announced new handsets for the summer, most of them targeting female users with glittery exterior, smaller size and waterproofing so that they can browse the Internet or email friends from the bathtub.

Apple's iPhone was not included in the list of new handsets.

New high-end models offer features like large LCD screens for smooth TV-viewing and 5-plus megapixel cameras as well as functions such as a quick connection to Yahoo Japan's mobile site. Yahoo Japan is a Softbank subsidiary.

Before the announcement of the iPhone deal, Softbank shares closed up 0.2% at 1,866 yen. The benchmark Nikkei average .N225 was up 1.6%.