Morgan Stanley analyst Katy Huberty believes Apple will partner up with both China Telecom and China Mobile over the next year, and will eventually make the iPhone available on all three Chinese carriers, reports Apple Insider. The move could bring sales of the popular handset to as many as 40 million units in 2013 alone. The iPhone is currently only offered by China Unicom, the nation’s second largest carrier. Through this partnership, Huberty believes Apple can only reach 10% of the 150 million “high-end Chinese subscribers” in the country. China Mobile, the world’s largest mobile carrier, holds the majority of the country’s high-end subscribers with an estimated 120 million customers, with the final 10% of high-end subscribers carried by China Telecom, the third-largest carrier in China. Huberty also believes Apple’s sixth-generation iPhone is likely to be compatible with China Mobile’s upcoming 4G TD-LTE network, although she notes it is “still too early to know for sure.” Morgan Stanley expects the next-generation iPhone to launch in the third quarter this year — BGR reported last month that Apple will launch a redesigned iPhone this fall — and the firm believes China Mobile will release the new iPhone in late 2012 or early 2013.
Yesterday’s eagerly awaited iPhone 4S launch in China quickly turned into chaos as an ugly brawl between gangs of professional scalpers grew out of control. Beijing SWAT teams intervened to calm down hundreds of angry customers and tame the rowdy lines. The New York Times explained that scalpers hired migrant workers to stand in the line and buy the phone. As Apple said it would not open the store, those individuals, identifiable by matching armbands or hats, got angry because they were not going to be paid.
An Apple spokeswoman issued the following statement following the incident (via Reuters):
Unfortunately, we were unable to open our store at Sanlitun due to the large crowd. And to ensure the safety of our customers and our employees, iPhones will not be available in our retails stores in Beijing and Shanghai for the time being.
Instead, Apple noted, customers could order the iPhone 4S on the online Apple store or through one of the many China Unicom retail outlets, the country’s exclusive iPhone carrier. However, the iconic smartphone was out of stock on the Chinese online Apple Store at the time of this writing.
As you know, Apple rarely goes on the record unless absolutely necessary, so the statement is an indication of how the launch spiraled out of control. Moreover, the egg-throwing incident inspired funny remarks on Twitter. Really, who goes to buy a new iPhone with a pocket full of eggs? Let’s just hope this situation won’t snowball into a public relations nightmare and become a theme for another anti-Apple advert by Samsung.
In the meantime, one analyst pointed out that Apple must learn from this turmoil and consider launching its products in China and United States simultaneously. Another incredible riot clip, egg throwing video and additional tidbits are displayed after the break.
“This is a debacle,” said Shaun Rein, managing director of China Market Research Group, in a phone interview with Bloomberg, adding that “Everybody knows there will be massive numbers of people when Apple has this kind of a launch. This shows very poor retail management ability.” Even though most of the components that go into Apple’s products are provided by Far East makers — with actual products assembled in Taiwanese factories that employ cheap labor from China, the 1.33 billion people market is not enjoying preferential treatment from Apple. The company typically delays product launches in China for several months as the United States gets precedence. However, China is already one of Apple’s most important markets and the world’s biggest PC market. For example, nearly one in six dollars of Apple’s June 2011 revenue came from China and analysts are estimating that Mac sales in China will quadruple.
China is an “amazing opportunity” for Apple, Tim Cook said in a conference call last October. Apple’s problem is lack of stores in such a huge market. Its five flagship stores, including massive outlets in Hong Kong and Shanghai, are not enough to satiate Chinese appetite for the company’s popular mobile devices and computers.
Nicole Peng, a research director with analyst firm Canalys, explained that the Chinese have little patience regarding availability of latest technology:
(Chinese consumers) want to have the gadget as soon as possible, they don’t want to wait. If Apple launches the products earlier, consumers don’t need to feel like, ‘I’m already late, I need to get it quicker.’
She said consumers in China know little about availability of Apple’s products through other outlets, such as authorized retailers, due to a lack of communication on Apple’s part. Beijing-based Marbridge Consulting’s Mark Natkin said online ordering could help Apple mitigate shortages and accelerate launches in China:
The reality of the market is that there is a limited supply of product. Apple might want to consider another sales approach. Hopefully this incident will be a learning experience for them.
Per data from Apple’s last quarterly earnings, Greater China has 7,000 points of sale for the iPhone. Contrast this to a total of 120,000 points of sale for the iPhone worldwide. Apple promised to open at least 25 new stores in China within the next few years and 40 outlets around the world in the next quarter, with 30 outside the United States.
Apple’s flagship store in Shanghai’s Nanjing East Road.
- Huge lines form at Apple Stores in China for iPhone 4S launch (9to5mac.com)
- Flagship Beijing Apple Store cancels selling iPhone 4S after fight breaks out (9to5mac.com)
Breaking out of Beijing right now: The flagship Apple Store cancelled selling the iPhone 4S after a fight broke out between scalpers (via Mic Gadget). Beijing’s SWAT team is on the scene right now to help tame the rowdy lines. Bloomberg said the angry crowd eager to get the iPhone 4S is pelting the store with eggs.
The Store was set to open at 7 a.m. local time to begin selling the iPhone 4S on China’s second largest carrier China Unicom. We showed you the large lines earlier today as customers gathered. What most people do not know, however, is that the majority of the people in line are scalpers looking sell the devices on the street. Scalpers reportedly started the fight in Beijing, according to MIC Gadget:
There are over thousands of people at the scene and seems like 99% of them are scalpers, according to local media reports. And according to our tipster, the scalpers are well organized, and they are divided into hundreds of teams, just like military forces. Each team includes 10-20 scalpers. Some of them even threw eggs at the glass door of the Apple store, while others threatened to assault the police.
In eight hours, Apple’s iPhone will touch down in China for the first official time. Thousands have already lined up outside of Apple Stores, and in Beijing and Shanghai locations, there are hundreds of people waiting in the hopes of getting their hands on the iPhone 4S. The image above was posted on Twitter on January 10th, three days before the highly-anticipated smartphone’s launch. China Unicom is the only carrier set to offer the iPhone 4S, with both the 16GB and 32GB models free with a two and three-year agreements. In the future, the device is also expected to land on China Telecom, the nation’s third largest wireless carrier.
The gallery above via Flickr user Liz Phung shows more shots from the launch in Beijing. There are also two images of employees receiving their first shipments at China Unicom in Wuxi, east China’s Jiangsu Province (via xinhuanet).
It is just over 8 hours before the iPhone 4S officially lands in China and huge lines already starting to form outside of Apple Stores in Beijing and Shanghai. The image below is from Instagram user Sanverde who noted he snapped the shot outside an Apple Store in Sanlitun Village, Beijing less than an hour ago. As you can see from the daytime image in the slideshow above (posted by Twitter user Alexander Galimberti on Jan. 10), Beijing line sitters started showing up for tonight’s launch days in advance. To the right is an image from Instagram user sainasilverman who says 400,000 units of the iPhone 4S have now arrived in Beijing.
China Unicom, the only carrier currently offering the iPhone 4S, does not currently accept pre-orders, but it will be offering the 16GB and 32GB models free on two- and three-year agreements. China Telecom, the nation’s third largest mobile carrier, is also expected to offer the iPhone in the future. The device recently received necessary approval from the China Radio Management agency for use on its CDMA network.
Check out the most recent shot of the lines outside the Sanlitun Village, Beijing Apple Store after the break and some more shots of gray market line sitters wearing red hats. According to MIC Gadget, those wearing a red cap have been paid 100 yuan ($16) to line up for the 12+ hour wait. We will be updating with more shots, so email your photographs of the lines to us at email@example.com.
Apple’s iPhone 4S may make its debut in China before Chinese New Year on January 23rd. Several retail stores in Shenzhen and Shenyang have already started taking pre-orders for the device, although Apple hasn’t yet said when it will officially launch the phone in China. The rumor was first reported by People’s Daily in China, which said that the country’s Ministry of Industry and Information Technology granted the iPhone 4S with its China Compulsory Certification stamp of approval on December 21st. The iPhone 4S made its U.S. debut in October and was launched in 20 additional countries earlier this month.
People Daily reported that Apple received the certification it needs by the China Compulsory Certification to launch the iPhone 4S in mainland China. The certification was awarded on Dec. 22, shortly after Apple also received certification from the Ministry of Industry and Information Technology of China. With the necessary certifications, Apple has now met all of its requirements to launch the iPhone 4S in China. People Daily said the iPhone 4S-model number A1431- will hit in early January.
To model how well the iPhone 4S could potentially do in China, in this year’s June quarter earnings, Apple’s sales in China topped $3.8 billion. Thus, obviously, the launch of the iPhone 4S in China would boost sales.
China Unicom is the third-largest carrier in China, and it remains the sole carrier for the iPhone. While Apple is able to reach a large market, only being available on one carrier leaves about 1.33 billion people in the market untapped. If Apple were to also sell the iPhone 4S on China Mobile, sales could grow substantially. At any rate, the iPhone 4S is at least on its way to China Unicom by January.
- Report: iPhone 5 to have plastic/rubberized bezel, aluminum back, come Fall of 2012 (9to5mac.com)
- China Unicom drops 16/32GB iPhone 4, preps 8GB model as iPhone 4S pends regulatory approval (9to5mac.com)
- Apple is turning out millions of iPhone 3GS and iPhone 4 CDMAs ahead of the holidays (9to5mac.com)
- Foxconn ramping up iPhone production with $1.1B investment (9to5mac.com)
The iPhone 5 will support 21Mbps HSPA+ data networks, China Unicom vice president Huan Wenliang said during the Macworld Asia 2011 conference. T-Mobile and AT&T both offer 21Mbps HSPA+ connectivity in the United States and market the networks as “4G,” although a recent letter from T-Mobile’s chief marketing officer suggests T-Mobile USA will not carry the device. The image above shows Apple’s progression from EDGE on the original iPhone to 3G support on the iPhone 3G, 3GS and iPhone 4 and, finally, to “4G” support in the iPhone 5. We reported exclusively in August that Apple is currently in a carrier testing stage with a 4G LTE-capable iPhone, too. Apple is set to unveil its latest iPhone on October 4th and current reports suggest the Cupertino-based company will reveal the iPhone 5 as well as a watered-down iPhone 4S device. Rumors suggest the iPhone 5 will offer an 8-megapixel camera, a thinner and lighter aluminum unibody design and a larger display.
According to a poorly translated report from Macotakara, China Unicom’s Deputy Director of Research has confirmed an iPhone 5 with HSPA+ capabilities (21Mbps) during a keynote at Macworld Asia 2011. The image above is from the presentation via PC Watch.
Japanese IT News Site ” PC Watch “Tells That, Research vice president of China Unicom , Huan Wenliang, told iPhone five Will Support W-CDMA based high-speed Data Transfer standard HSPA Evolution “HSPA +” (21Mbps) at Keynote speech in Macworld Asia 2011.