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Despite statements from Softbank claiming that the iPhone remains a popular item, some analysts are now reporting that iPhone 3G sales in Japan are going to fall very short of what was initially hoped for.

Initial estimates were expecting around one million in total, but so far the sales are looking like they will top out somewhere around the 500,000 mark, falling very short of their goal. According to MM Research Apple and Softbank have sold around 200,000 iPhone 3G’s in the first two months, but since then the demand has slowly gone downhill.

According to analysts some reasons that the iPhone 3G is not as welcomed as expected is caused by the current high-end cell phones that are already available. In Japan it is not uncommon to find mobile phones with a high-end color display, satellite navigation, built-in cameras, music players and the ability to watch digital TV while on the go. Furthermore some mobile phones also allow users to make debit card payments and even use them as train passes.

At least one user, 34-year-old Noriko Tanaka stated that she liked the iPhone she wanted the ability to watch TV also, further mentioning that “the touch screen looks fun, but I’m not sure I could get used to it.”

“The iPhone is a difficult phone to use for the Japanese market because there are so many features it doesn’t have,” says Eimei Yokota, an analyst with MM Research.

Overall it seems that a combination of lack of important features and high pricing may just keep the success of the iPhone in Japan to a minimum.

[WSJ]