Will there be a 'gold rush' for latest iPhone in China?

7:06 PM, Sep 19, 2013   |    comments
The simultaneous release of the new phones in China as well as the USA is a recognition of the growing importance of China's smartphone market. (Photo: Glenn Chapman, AFP/Getty Images)
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BEIJING - Apple's two new iPhones go on sale in stores Friday, and Friday comes 12 hours earlier here than it does in New York.

A near riot broke out on the day the 4S debuted in Beijing last year. But by late Thursday night there was not even a line outside Apple's flagship Beijing store for the new 5S and 5C. And this was at 10.30 p.m. when the store's Sanlitun area buzzed with many evening revelers for the Mid-Autumn Festival, a public holiday.

"I predict sales will be not as good as iPhone 4 and 4S, that was the peak for iPhone in China," said Liu Yang, cellphone manager at a Suning electronics store in north Beijing.

"Although there are more advertisements this time than before, I think consumers are disappointed about the new iPhones," he said. "Other store managers in Beijing said their reservation numbers are not even as high as ours. I think that's because the new models don't have many new functions."

As workshop to the world, China manufactures many Apple brand products including the two new iPhone models that hit stores worldwide Friday. In the past, such proximity to the source didn't help Chinese customers, who had to wait months after the U.S. release to buy Apple's latest toy.

The simultaneous release of the new phones in China as well as the USA is a recognition of the growing importance of China's smartphone market and the need to bolster Apple's slowing sales in the world's most populous country, tech experts here say.

The gold cover version of the more expensive 5S has drawn the most interest. Gold is highly popular in China for its obvious associations with wealth. While Apple calls the color "champagne gold," many Chinese Internet users have adopted the more critical description "local tyrant gold" to refer to rich showoffs.

The gold 5S, the most popular of three available colors, quickly sold out when Apple opened pre-ordering online on Tuesday. The company suspended pre-orders until Friday, without disclosing sales volumes.

The Apple brand has proved so popular in China that it has inspired not only copycat products but even several knock-off stores that copied the entire Apple layout. But in the past two years its market share has been squeezed by Korea's Samsung and increasingly strong Chinese rivals who cater to domestic demands for larger screens.

In China, iPhone sales in the fourth quarter of 2013 will outpace the previous three, "but in the next first quarter sales may drop quickly, because consumers' feeling of freshness will disappear," said Wang Jun, a telecoms researcher at Analysis International, who also predicts low sales volumes compared to the iPhone 4 and 4s.

"I don't think there will be many people queuing outside stores to buy the new iPhones on the 20th," Wang said. "For high-end users, 5S and 5C are almost the same, and the new functions of 5S such as fingerprint identification are not an absolute demand for them. So I predict their sales volumes are similar.

"In the past two years, Samsung seized many market segments, the iPhone lost its freshness, and Chinese consumers got bored of it," Wang said. "Every time they see there is little breakthrough with new iPhones, they are very disappointed.

"But Samsung has cellphones aiming at the high, medium and low-end markets. IPhone lost the buyers who like bigger screens."

Contributing: Sunny Yang

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