Apple's new iPhone poised for record debut as sales begin

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Jimmy Gunawan, 33, shows his new iPhones outside Apple's flagship store in Sydney's central business district after being first through the door on Sept. 20, 2013. Photographer: Greg Wood/AFP/Getty Images

Apple Inc. (AAPL) attracted long lines of consumers at its retail stores today for the debut of its latest iPhones, in the company's biggest move this year to stoke new growth.

In Australia, where sales of the iPhone 5s and 5c kicked off first, more than 400 people lined up in Sydney's central business district. Crowds were larger at the store in Tokyo's Ginza area, where about 800 people waited, including people dressed as Batman and Apple co-founder Steve Jobs in a face mask, jeans and black turtleneck.

After Japan and Australia, the handsets go on sale today in China, Hong Kong, Singapore, Germany, France, U.K. and the U.S. It's the first time Apple is rolling out its flagship product for sale in China on the same day as other main markets, as the company seeks to lure new customers in the world's largest mobile-phone market.

Opening-weekend sales are crucial to boosting Apple after nearly a year without releasing a new device and ceding market share to rivals including Samsung Electronics Co. (005930) in the $280 billion smartphone market. Whether the Cupertino, California-based company can surpass the record 5 million smartphones sold during last year's iPhone debut depends largely on whether there is enough supply of the feature-rich iPhone 5s.

"It really depends entirely on how good or bad the yields on the 5s are," said Carl Howe, an analyst at Yankee Group, who correctly predicted opening weekend sales last year. Apple could top 7 million in sales if it has enough handsets, though "Apple may not even hit the 5 million I predicted last year if the 5s is in really short supply," he said.

Camping out

Apple will sell as many as 6 million units even though it won't have enough iPhone 5s handsets available, according to Gene Munster, an analyst at Piper Jaffray Cos. (PJC) New fingerprint-reading technology makes the gadget harder to manufacture, he said. Brian Marshall, an analyst with ISI Group, also predicts 6 million iPhones will be sold.

In some places, people started camping out in front of Apple stores days ago to get the new iPhones, evoking scenes from earlier product introductions -- even though the gadget is now six years old. Dozens of people gathered in front of Apple's store near the Paris Opera by 7:30 p.m. yesterday, prepared to stay overnight with a weather forecast for rain. Some had blankets and campers' chairs.

Faster processor

"I started lining up five days ago," said Sachihisa Saishiki, a 45-year-old who runs his own business and has camped outside the Ginza store at least six times previously. "I was with a group of 10, and we took turns going out for food, going back home to take showers. I spent time sleeping out here, too, lying down on a cardboard box," he said after buying a gold iPhone 5s.

The iPhone 5s features a new camera and faster processor. It costs $199 to $399 depending on the amount of memory and with a two-year wireless contract. Without a contract, the smartphone costs at least $649.

For the less-expensive iPhone 5c, Apple took last year's iPhone 5 and mostly repackaged it in a new plastic casing that's offered in five different colors. It costs $99 to $199 with a two-year contract, or $549 without one.

Amy Bessette, a spokeswoman for Apple, declined to comment.

Fingerprint technology

Jimmy Gunawan was the only person in line at Apple's store on Sydney's George Street when he arrived at midday yesterday, with others joining about three hours later. The 33-year-old freelance film maker wanted the handset for its video functions, upgraded camera and fingerprint technology.

"When I arrived I thought I would be further back but I was the first," said Gunawan, who bought two gold iPhone 5s models, one for himself and one for his mother. "It's not about having a large screen or powerful hardware, it's about the balance of everything."

At Telstra Corp. (TLS)'s Sydney store across the road from Apple, about 50 people lined up to buy the handsets from Australia's largest carrier, which was providing free coffee and a disc jockey for shoppers.

Every iPhone release is critical for Apple because the product accounts for about half its revenue. Since the iPhone 5 started selling last year, the company has faced increased competition from rivals including Samsung, which has become the world's largest maker of smartphones by offering customers a wider variety of designs and prices.

China focus

Apple typically puts out a press release with opening-weekend sales figures on the Monday after the iPhone goes on sale.

"This is the second time for me to line up here, but it feels like there's more people this time than the last time," said Katsuki Tochi, 37-year-old salaryman outside the Ginza store who bought black and white versions of the iPhone 5s. "I love Apple, their design is great."

How Apple performs in China is particularly important, given the scale of the market there. Analysts have questioned whether the price of the iPhone 5c -- more than the equivalent of $700 because of tariffs -- will be too expensive for customers in China. Partly because of that, Apple shares have fallen 6 percent since the company announced the iPhone pricing last week.

In addition to the new handsets, Apple also introduced a new mobile operating system, iOS 7, to customers Sept. 18. It includes a redesign of applications like e-mail, calendar and photos, and adds new icons, fonts and color scheme.

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