The ongoing mobile price war in Japan has seen the fast-growing third-placed player Softbank report weaker than expected quarterly profits for fiscal first period ended June 30, reports Bloomberg. Softbank’s operating profit (sales minus the cost of goods sold and administrative expenses) climbed 8.1 percent year-on-year to JPY85.1 billion (US$788 million), missing a target of JPY86.1 billion set by four analysts in a Bloomberg survey. Net income dropped to JPY19.4 billion from JPY25.1 billion a year earlier, below a JPY20.9 billion estimate by JP Morgan, while sales fell 2.4 percent to JPY647.3 billion, missing the JPY656.1 billion estimate in the survey. Bloomberg notes that Softbank has managed to outperform larger rivals NTT DoCoMo and KDDI for 14 successive months in terms of subscriber additions but that this has come at the expense of profitability. Its strategy has focused on lower pricing plans rather than handset deals, a strategy that has subsequently been copied by its rivals, most notably DoCoMo. Softbank added 525,500 subscribers in the quarter, more than double the 241,000 additions at DoCoMo, according to official figures. 

Softbank is the exclusive distributor of the iPhone 3G in Japan, which it launched last month, and is hoping the device will bolster results in the current quarter and beyond. “iPhone 3G will make a positive contribution to Softbank’s subscriber base and to an increase in [data revenue],” Hironobu Sawake, a Tokyo-based analyst at JP Morgan, wrote in a report on July 22, notes Bloomberg. JP Morgan estimates that Softbank will sell 1 million iPhone 3G units in the first year.