Apple's iPhone sees tepid sales debut in China

Posted:
in iPhone edited January 2014
Hundreds of people showed up for the iPhone launch party in Beijing last week, but the handset failed to sell out in many Chinese stores.



Compared to iPhone debuts in the U.S. and Japan, the Chinese launch was "subdued," The Wall Street Journal reported. While the reaction was not necessarily indicative of sales, it is likely due to the fact that gray market phones have been available for import in China for years, and at competitive prices.



Still, many attended to official China Unicom launch party Friday night. Around the nation, though, reports of sales did not indicate significant demand. Apple and China Unicom did not announce any launch sales figures for the 2,000 locations where the iPhone was available.



"At the Apple store in Beijing, the company's only location in China, the crowd seemed less enthusiastic," the report said. "Employees cheered anyone who came in with chants of 'iPhone! iPhone!' But there were no lines for the stacks of new iPhones."



On Friday, the iPhone debuted with a relatively high price of 6,999 yuan, or $1,024, for the high-end iPhone 3GS without a service contract. The same handset can be purchased in Hong Kong for about $800.



Some potential buyers have been turned off by the lack of Wi-Fi in the handset. The feature was left out because the Chinese government temporarily banned the wireless standard in favor of a rival Chinese offering. But that ban was relaxed in May, after manufacturing of the new iPhone model began. China Unicom has said it hopes to have Wi-Fi in the next batch of iPhones intended for release by the end of the year.



Apple and China Unicom announced their three-year deal for the iPhone in August. The non-exclusive agreement has left the door open for a potential deal with China Mobile, the world's largest wireless carrier.
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Comments

  • Reply 1 of 43
    The iPod doesn't do well in China, either. By the end of 2007 Apple had only 7.5% of the digital music player market in China. Macs do much worse in China. Apple typically doesn't break 80,000 Mac sales a year in China. But none of these patterns really affected Apple's bottom line. Despite weakness in China, the iPod, for example, still dominates overall.
  • Reply 2 of 43
    Wow. This could be a disaster unless there is an embedded wifi chip that can be turned on. Hope Apple got paid upfront for the handsets, and does not have to take a write-off.



    With no wifi + $1000 + the next one with wifi coming soon, one could this coming from a mile away.
  • Reply 3 of 43
    As I mentioned before, Apple's sales will find a level of equilibrium at some point. Just give it time.
  • Reply 4 of 43
    They're probably so used to buying knockoffs, they don't give the actual original product a chance.
  • Reply 5 of 43
    Oh, you will have known all that long before, if you read AI.
    1. ---->

    2. ---->

    3. ---->

  • Reply 6 of 43
    gordygordy Posts: 968member
    That price is crazy. Features are crippled. Who is surprised?
  • Reply 7 of 43
    solipsismsolipsism Posts: 25,726member
    The gray market has cheaper phones with WiFi, no wonder the lines are short.



    Quote:
    Originally Posted by anantksundaram View Post


    Wow. This could be a disaster unless there is an embedded wifi chip that can be turned on. Hope Apple got paid upfront for the handsets, and does not have to take a write-off.



    With no wifi + $1000 + the next one with wifi coming soon, one could this coming from a mile away.



    iFixit has no plans to get one of these phones to break open, but if I had to wager a guess I?d say that the driver and UI elements have been removed but the chip is the same. I say this because the no-WiFi law will be raised shortly and the WiFi chip is also tied to the Bluetooth chip so the easiest solution is to keep the chip in place.
  • Reply 8 of 43
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by gordy View Post


    That price is crazy. Features are crippled. Who is surprised?



    Can they get the profit margin any higher? Shouldn't it cost less there as it's made over there so no fuel costs for transportation?

    Apple will release a wacko vesion of the iPhone like this yet won't release an AppleTaxed Netbook in US for $700? Go figure.
  • Reply 9 of 43
    melgrossmelgross Posts: 31,267member
    Quote:
    Originally Posted by gordy View Post


    That price is crazy. Features are crippled. Who is surprised?



    China Unicom is charging so much for the phone, it's not surprising that sales are slow.



    However, the lack of WiFi will supposedly be corrected with the next batch of phones.



    From what I've read, when Apple was manufacturing these phones, the Chinese government was still not allowing WiFi. They later changed their minds and now allow it. But the first batch of phones had already been manufactured and warehoused.



    I wonder what will happen to these early phones when the new ones are available?
  • Reply 10 of 43
    melgrossmelgross Posts: 31,267member
    Quote:
    Originally Posted by teckstud View Post


    Can they get the profit margin any higher? Shouldn't it cost less there as it's made over there so no fuel costs for transportation?

    Apple will release a wacko vesion of the iPhone like this yet won't release an AppleTaxed Netbook in US for $700? Go figure.



    It's China Unicom that is setting the prices. Talk to them.
  • Reply 11 of 43
    teckstudteckstud Posts: 6,476member
    Quote:
    Originally Posted by melgross View Post


    It's China Unicom that is setting the prices. Talk to them.



    As soon as I install my Chinese translator app.
  • Reply 12 of 43
    aplnubaplnub Posts: 2,583member
    Quote:
    Originally Posted by vbeeno View Post


    I love my Iphone 3G but Im guessing the Chinese probably have something that kicks Iphone to the Curb. The US has always been WAY behind as far as technology goes. Anyone whos ever been to Hong Kong knows this.



    Jess



    Always behind may be a little strong.
  • Reply 13 of 43
    gazoobeegazoobee Posts: 3,754member
    Quote:
    Originally Posted by vbeeno View Post


    I love my Iphone 3G but Im guessing the Chinese probably have something that kicks Iphone to the Curb. The US has always been WAY behind as far as technology goes. Anyone whos ever been to Hong Kong knows this. ...



    This entire post is complete BS.



    You don't have to reach for conspiracy theories when the actual cause is right in front of your face and mentioned in every article on the topic. The sales are poor because of the corruption, the grey market, and the interference of the current quasi-fascist government. It's very similar to what happened in Russia except Russia is much higher on the "corruption/grey market" side and has practically zero government interference.



    All that being said, this is not bad news at all. The whole game in China is just to get your foot in the door. Apple is winning so far.



    The Wi-Fi restriction probably will be lifted soon, and the next iPhone will sell much better because the grey-market versions won't be so available then as they are now. The Chinese citizens that can afford it will be lining up at their own Apple stores for the new handsets within a version or two and Apple knows it.



    PS - keep the spam links out of your signature please. Very bad form.
  • Reply 14 of 43
    mark2005mark2005 Posts: 1,158member
    Well, if tepid means anything other than US-sized sales of a 1/4m in 3 days, then tepid is correct. But then again, iPhone really hasn't had anything other than tepid sales anywhere other than the US, and it's still selling 7m a quarter.



    The iPhone is already on sale at 30 provinces and over 1000 distribution points in China. Some stores have had over 1000 people on line. If each distribution point averaged sales of 10 a day, that's almost a million for the quarter. Not bad, since Apple is not selling more than 1m a quarter in any country other than the US.



    And the Beijing Times reported that China Unicom had 140,000 pre-orders prior to sale. See iphonasia.com for better reporting on what's happening over there.



    That said, I don't know whether any of this is true. Beijing Times could be a propaganda rag. Thousands of people could've been on that line to also get free tickets to a concert. See US Microsoft store.
  • Reply 15 of 43
    Quote:
    Originally Posted by solipsism View Post


    ..... if I had to wager a guess I?d say that the driver and UI elements have been removed but the chip is the same. I say this because the no-WiFi law will be raised shortly and the WiFi chip is also tied to the Bluetooth chip so the easiest solution is to keep the chip in place.



    Ah, and Apple will charge them ~13 yuan ($2) for the software update to turn it on!
  • Reply 16 of 43
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by anantksundaram View Post


    Ah, and Apple will charge them ~13 yuan ($2) for the software update to turn it on!



    The original price for that driver was $5 USD. 30 yuan?
  • Reply 17 of 43
    China Unicom Chairman stated that the next version will have WiFi.



    On an unrelated issue: I was surprised last week, when I walked into Apple Store SoHo and saw a line, 10 deep, of people waiting to activate their iPhones (I think there were 3 activation stations?)

    Just seemed strange that their is still an actual "line" of people.
  • Reply 18 of 43
    Sure CU set the final price, but the price from Apple certainly has a direct role on the final price. Apple tends to take the lions share of margin, leaving the retailer to pick up the scraps.
  • Reply 19 of 43
    China aint the only game in town . . .



    http://brainstormtech.blogs.fortune....-suit-and-tie/



    Lots of other opportunities.
  • Reply 20 of 43
    Quote:
    Originally Posted by isaidso View Post


    China Unicom Chairman stated that the next version will have WiFi.



    On an unrelated issue: I was surprised last week, when I walked into Apple Store SoHo and saw a line, 10 deep, of people waiting to activate their iPhones (I think there were 3 activation stations?)

    Just seemed strange that their is still an actual "line" of people.



    holidays are coming. the sale will pick up.



    isaidso, do you the details on service plan?
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