Apple looks for big screen boost as iPhone 6 hits China

Bloomberg

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A woman counts Hong Kong dollar banknotes as people resell Apple Inc. iPhones across from the company's Causeway Bay store during the sales launch of the iPhone 6 and iPhone 6 Plus in Hong Kong, China. A woman counts Hong Kong dollar banknotes as people resell Apple Inc. iPhones across from the company's Causeway Bay store during the sales launch of the iPhone 6 and iPhone 6 Plus in Hong Kong, China.
Apple Inc.’s large screen iPhone 6 Plus is finally available in the world’s biggest smartphone market and Chinese consumers don’t have to resort to smugglers.
The 4.7-inch iPhone 6 and larger 6 Plus will go on sale at 10 a.m. in China stores today, while customers who pre-ordered the devices were able to collect them from 8 a.m., almost a month after the U.S. release.
Strong demand, especially for the 5.5-inch iPhone 6 Plus, saw Chinese consumers pay black market vendors almost double the Hong Kong price for phones brought illegally across the border after its global release. As many as 20 million consumers registered to buy the new devices through various channels, according to a report on Tencent Holdings Ltd.’s Tech.qq.com website. While not all bookings result in sales, the new devices will outsell previous models, said Bryan Wang, China country manager for Forrester Research.
“The large screen iPhones are going to sell better in China for the first weekend than last year’s iPhone 5s, but may not be multiple folds,” Wang said.
Usually about 10 percent to 15 percent of registrations result in sales, implying sales between 2 million and 3 million units. That would exceed the 2 million units of the iPhone 5s Apple shipped to all channels in China last year, Wang said.
Apple is also rolling out the new iPhones in India and Monaco today and the phones will reach an additional 36 countries this month. By the end of October, the devices will be available in 69 countries and on pace to reach 115 countries by year’s end, Apple said in a statement.
China demand
Still, none of those markets can compare to China, where Apple got $5.9 billion of sales in the three months ended June 28, or about 16 percent of the company’s total revenue. The China region for which the company discloses sales includes Taiwan and Hong Kong.
Apple and other high-end smartphone makers are also facing changes in how wireless carriers sell their devices. China Mobile Ltd., the world’s largest carrier, is taking steps toward eliminating $2 billion in smartphone subsidies, almost doubling the costs of some devices such as Apple Inc.’s iPhone 5s.
Fever for the largest devices had buyers in Beijing last month paying 12,000 yuan ($1,960) for the 128 gigabyte iPhone 6 Plus, or 87 percent more than the Hong Kong list price. That model will cost 7,788 yuan at Apple from today, according to its China website.
“The outlook for the iPhone 6 and 6 Plus seems positive in China,” said Tay Xiaohan, a Singapore-based analyst with International Data Corp. “Apple has always been a very popular brand with the Chinese, and with the demand for larger screen sized phones growing in China, we are not surprised to see the high number of pre-orders for iPhones in the market.”
Lenovo, Xiaomi
Even with healthy sales, the impact on Apple’s market share may be minimal given the strong growth that local Chinese vendors like Lenovo Group Ltd. (992) and Xiaomi Corp. have in the low-to mid-range segment of the market, Tay said.
Apple had 6 percent of China’s smartphone market in the second quarter, ranking sixth in the country, behind market leaders Lenovo and Xiaomi, according to IDC.
Apple yesterday held an event at its headquarters in Cupertino, California, where it unveiled new iPads and Macintosh computers. Chief Executive Officer Tim Cook is aiming to reinvigorate the iPad line after sales of the tablets, Apple’s second-biggest product by revenue, have declined for two straight quarters.

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