iPhone 12 launches in China to strong demand despite stiff competition for Apple in 5G smartphones

24-Oct-2020 Intellasia | South China Morning Post | 6:02 AM Print This Post

When Apple’s new iPhone 12 series smartphones went on sale worldwide on Friday, many people in China were already standing ready. Even by lunchtime, a line snaked outside Apple’s flagship shop in Beijing, located at an upscale shopping centre in Sanlitun. It is a testament to the continuing power Apple has to draw in Chinese consumers even as tensions with the US have intensified.

One man standing outside the store with an Apple bag had already bought several iPhone 12s and was reselling them for a steep mark-up. He said the store had been crowded since 8am.

“Most of them [waiting in the early morning] were people who had reservations for the new phones,” said the shopper, who declined to give his name. “It’s very popular and people need to pay an extra 1,000 yuan to get the phones from me.”

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

Compared with last year’s iPhone 11 line of phones, the iPhone 12 line is showing strong demand in China. The country is estimated to account for 35 to 45 per cent of global demand for the iPhone 12 Pro, according to a recent report from TF Securities International analyst Kuo Ming-Chi, who is known for his Apple analysis. There were between 7 million and 9 million pre-orders of the iPhone 12 and iPhone 12 Pro globally during the first weekend of sales, according to Kuo.

The new iPhones have also proven to be a hot commodity on Chinese e-commerce sites. The available stock on JD.com sold out within 30 seconds after pre-orders started on October 16. And Alibaba, the parent company of the South China Morning Post, said that about 30 million users have searched for the new iPhones over the last 30 days on its Tmall marketplace. That is twice the search volume for the iPhone 11 in the same period last year.

But many people in Beijing were still compelled to weather the chill fall air and head out to the Apple store in person.

One shopper surnamed Wang, a man in his early 30s who works in the information technology industry, already had two iPhone 12s in his bag by noon one blue and one white. The phones were delivered to his doorstep in the morning, but Wang said he still had not decided which one he wanted to keep.

“I don’t want to be fooled by the pretty renderings on the official website, so I just came to make sure which colour is better,” said Wang, who currently uses the three-year-old iPhone X.

Wang had pre-ordered the phones from Apple when they went on sale last week. He said he works near the Apple store, so he had come over to return one of the iPhone 12s after “experiencing the real phones in the hand.”

“Android phones are often too big,” he said. “The iPhone 12 is a tribute to the classic iPhone 5s and is much lighter and thinner, and the user experience is also way better than on Android phones.”

Sales of the iPhone 12 could be aided by the fact that it is the first iPhone to support 5G after Apple skipped the feature last year. Sales of the iPhone 12 and 12 Pro reached an estimated 1.7 to 2 million units globally in the first 24 hours of pre-orders. The three iPhone 11 models only saw 500,000 to 800,000 units sold in the same period after pre-orders opened in September last year, according to the report from Kuo.

Other online platforms beyond the typical Apple retailers are also cashing in on the high demand. Meituan, China’s largest on-demand delivery service platform in China, is now selling the iPhone 12 in limited quantities.

The company said on its official WeChat account yesterday that the platform will provide 100 new iPhones in Beijing and Shanghai each day, starting on Friday. The consumers who are quick enough to snap up the new phones will see them delivered within 30 minutes.

JD Daojia, another on-demand delivery platform owned by the JD.com-backed Dada Group, delivered its first iPhone 12 Pro to a Beijing resident within 14 minutes after she ordered it at 8am, when the phones officially went on sale, the company said.

The addition of 5G could be only part of the story for the iPhone 12′s popularity. Huawei, the largest smartphone brand in China, has also had setbacks recently. The company is facing a chip shortage due to recent US sanctions, according to Kuo’s report. This could make it difficult for consumers to get their hands on Huawei’s new Mate 40, which started pre-orders on Friday.

“I also want to try Huawei’s new phone, but I am sure it will be very hard to snap one up,” Wang said.

The Mate 40 runs on Huawei’s own Kirin chips, but those chips require US equipment to make. It is the first phone Huawei has released since US President Donald Trump introduced new restrictions on companies using US technology in August, barring them from supplying chips to Huawei. Restrictions on US companies from last year have also kept Google from doing business with Huawei, meaning all the company’s new phones do not have access to Google apps and services.

Richard Yu Chengdong, chief executive of Huawei’s consumer business group, said at the product launch that the company is going through “a very difficult time” because of the sanctions. He did not address how many of the new phones the company would be able to produce.

When Apple first announced the iPhone 12, the initial response on Chinese social media was derision because of Apple’s decision to remove earphones and chargers from the box. Apple was also seen as a latecomer to 5G compared with the local competition, after brands like Huawei and Xiaomi released multiple 5G phones since last year.

 

Category: China

Print This Post

Leave a Reply

You must be logged in to post a comment.