Bottom line: iPhone 6 sales are likely to start slow in China, but could pick up momentum as the nation’s 3 wireless carriers launch aggressive promotions to attract users for their new 4G services.
As everyone awaits the first sales figures for the iPhone 6 after its launch last Friday, it’s becoming apparent that Apple’s (Nasdaq: AAPL) newest smartphone isn’t drawing quite as much buzz as earlier models in China. But that said, strong promotions from some of China’s leading e-commerce sites, a price that’s relatively unchanged from previous ones and the Chinese obsession with owning the newest of everything could work to the new iPhone’s advantage in the world’s largest smartphone market.
In case anyone out there can’t tell, most of us really have no idea how the new iPhone is selling in China for this latest launch, thanks to the huge number of sales channels Apple now has in the country. In addition to official Apple stores and the nation’s 3 wireless carriers, consumers can buy their new iPhones through thousands of unauthorized Apple shops, as well as through top e-commerce sites like the ones operated by Suning (Shenzhen: 002024) and JD.com (Nasdaq: JD).
The most revealing thing about a scan of the headlines was the lack of big crowds at the handful of official Apple stores around China surveyed by reporters. (Chinese article) One report points out the lack of people could be due to Apple’s success at building out such a wide array of sales channels in China, negating the need for fans to flock to Apple stores to get their hands on one of the first iPhones to hit the market.
Mixed E-Commerce Message
A scan of the JD.com and Suning sites, 2 of the biggest e-commerce companies to sell the iPhones, also reveals a relative mixed message. The number of customer reviews on the JD page was relatively modest, totaling about 1,500 — not a huge figure for Chinese fans who love to give their opinions on everything. Reviews on the Suning page were even lower, numbering about 1,000 as of Monday morning. Most models were still in stock on both companies’ pages as well, though a package plan for one new model from Unicom (HKEx: 762; NYSE: CHU), the nation’s second largest telco, were sold out in Beijing.
One earlier forecast for iPhone 6s sales in China was decidedly conservative. That forecast saw an analyst predict that China would log just 2 million iPhone 6s sales in their first weekend, out of a total of 13 million sales globally. (previous post) That means China would account for about 15 percent of total first-weekend sales, even though Greater China accounted for about a quarter of Apple’s total sales last quarter.
From a personal perspective, I haven’t heard anyone in my limited circles boast about being one of the first to buy the new iPhone. Apple as a brand still holds huge attraction here, but the general feeling seems to be there’s really nothing new in this particular model. The ease of obtaining a new iPhone this time also means that many people may be quietly ordering and picking up their new models without feeling a need to take part in high-profile launch events.
We’ll have to wait for some official numbers from Apple to see how much China actually contributed to the latest launch. But based on the early signs, there really seems to be a lack of major excitement surrounding this latest new iPhone in China. Accordingly, I would expect that the analyst’s prediction for 2 million unit sales during the first weekend in China may be close to the mark. Things could pick up after that as the carriers launch aggressive promotions for their new 4G services, which could eventually help China account for 20-25 percent of global iPhone 6s sales.
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