Even before the iPhone launched in Japan, there was strong debate over whether or not the gadget could succeed in a market saturated with high-end feature packed cell phones. Now we’re getting more evidence that it may not be selling all that well. According to CrunchGear, Softbank Mobile, Japan’s exclusive carrier of the iPhone, is slashing the price of the handset as well as data plans for it. As part of its three-month “iPhone for Everybody” campaign that kicks off today, Softbank Mobile is giving the 8GB iPhone away free to new subscribers signing up to a two-year contract. New subscribers can also opt for the 16 GB model whose price has been slashed from $350 to $118. The iPhone’s maximum data plan also has a new price, dropping from $62 a month to $46.50 a month.

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Softbank, which beat out its larger rival DoCoMo (NYSE: DCM) to carry the iPhone, has been very quiet about the number of iPhones it has sold, though it did report that the handset helped net its highest rate of new subscribers in the quarter after it first launched in July 2008. This is the second time, however, it’s tinkered with pricing around it. In August, just a month after it debuted in Japan, the carrier lowered the cost of its iPhone data plans, which Sofbank boss Masayoshi Son said would make it “easier for so-called entry-level users to jump in.” Obviously, not easy enough. Will Japan’s notoriously cut-throat cellphone market, where features such as mobile wallets and built-in TV receivers are the norm on the majority of phones, claim another victim? It’s too early to say, but should the iPhone end up flopping completely there, at least Apple (NSDQ: AAPL) can comfort itself knowing that its rivals have struggled as well. Samsung, LG (SEO: 066570) and Motorola (NYSE: MOT) have all failed to crack the market, and last December, Nokia (NYSE: NOK) pulled out completely, save for its hyper-luxury hand-made Vertu brand of phones.