China Meets iPhone 5 With Open Arms
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Chinese consumers are not that different from Americans these days. They check online brokerage rankings and trade stock tips and invest in real estate. They also love gadgets: when the iPhone 5 hit the market, millions of Chinese bought one the very first weekend.
Gloomy Predictions
Expectations were not high for the iPhone 5 in China. Chris Neiger of the Motley Fool, writing in DailyFinance, said the pessimistic view was based on a lack of long lines of customers waiting to buy. When two million phones were sold in the first weekend, analysts had to reconsider.
Change in Buying Habits
iPhone 4S sales were chaotic with huge crowds forming at Apple stores waiting to buy. Chinese consumers didn’t flock to stores this time, and competing smartphone brands have been gaining ground. The change that surprised many was the shift from no-contract phones to mobile carrier contract-based deals. Also, with global economic uncertainty, some frugal Chinese may have preferred the highest savings interest rates to spending money on a new mobile phone.
Preorders and iPhone 4S Numbers
One telltale sign was carrier preorders. Neiger writes that for one carrier preorders were half again the number for the iPhone 4S, at 300,000. Other carriers, but not all, were offering contract-based phones through company stores and other outlets.
The Status Factor
For iPhone 5 buyers, status is still a big factor. Reuters cites analyst Brian White of Topeka Capital Markets saying the importance of status is a major factor in sales, especially for upgrades. The new form factor makes the phone attention-grabbing for status conscious Chinese.
Carrier Participation
China Unicom and China Telecom offered the new iPhone, but not the country’s largest carrier, China Mobile. Customers of the number one carrier could have pushed record numbers even higher.
Competition
In addition to iPhone and Android smartphones, Nokia’s Lumia is bringing Windows Phone 8 to the Chinese market. With more choices and competition in the Chinese market, the iPhone could face challenges. One advantage the iPhone has currently is that it is uniquely innovative, and the U.S. government has been discussing whether China has the capacity at this time to produce anything comparable.
Looking Forward
Apple’s iPhone shipment numbers are falling in China against other smartphones, and pessimistic analysts could ultimately be on target, even with robust first weekend sales.
