- Title: CHINA: Apple's new iPhones aim to woo Chinese users
- Date: 11th September 2013
- Summary: BEIJING, CHINA (FILE - AUGUST 2013 ) (REUTERS) PEOPLE SEATED USING XIAOMI SMARTPHONES XIAOMI SMARTPHONE IN HANDS SHANGHAI, CHINA (FILE - AUGUST 2013 ) (REUTERS) PEOPLE STANDING IN ELECTRONICS SHOP WOMAN LOOKING AT SAMSUING SMARTPHONE SAMSUNG SMARTHPHONE IN WOMAN'S HANDS PHONES ON DISPLAY
- Embargoed: 26th September 2013 13:00
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- Location: China
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- Country: China
- Topics: Technology
- Reuters ID: LVA8GGJFD6LHQRBWBUDUIS7IXP0H
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- Story Text: Apple unveiled the new iPhone 5S and the cheaper iPhone 5C in Beijing on Wednesday (September 11), but analysts and consumers say the phones are still too expensive to compete with cheaper Asian rivals.
For the first time, Apple held a launch event in Beijing, a move seen as underscoring the importance of the Chinese market, hours after it unveiled the two new handsets at the company's california headquarters on Tuesday (September 10).
Reporters played with samples of the phones, but many were disappointed that the launch was essentially just a video replay of the U.S. event.
The plastic-backed iPhone 5C will sell for 4,488 yuan (730 U.S. dollars) in China, almost 200 U.S. dollars more than the United States retail price of 549 U.S. dollars and only 800 yuan (130 U.S. dollars) less than its top-of-the-line sibling, the 5S.
Wang Fei, a prominent blogger and App developer, said the 5C was not nearly cheap enough for Chinese consumers.
"Am I really going to spend over 4,000 yuan (650 U.S. dollars), 4,500 (730 U.S. dollars) yuan even, to buy a phone from last generation? I really think it's crazy. I don't think there's really any need to buy something like this. But perhaps, if I didn't know about it before, or if I ultimately didn't really care, and I saw all the different colours to chose from, then perhaps I might consider it," he said.
The pricing of what was expected to be a cheap model aimed at growth markets such as China and India has not only stumped investors, but also Apple aficionados in China, a country of almost 1.4 billion people and the world's largest smartphone market.
"My original expectation was that the 5C would cost around 3,000 yuan (490 U.S. dollars), but now, as you just said, it's over 4,000 (650 U.S. dollars), I think it's a little too expensive for a budget version. I don't think I would buy one. If 5S were around 5,000 (820 U.S. dollars), similar to the already-released 5 and 4S, I might be able to accept it," said Liu Donghai, a 25-year-old chemical engineer, outside a Beijing Apple store.
New Apple product releases tend to generate a great deal of buzz, but the 5C's reception in China, where fans have been known to queue for days for new products, was lukewarm at best.
But some like 22-year-old student, Liang Hai, said they would still favour Apple.
"It's pointless to compare which mobile phone is the better. I might think that the IOS ecosystem is much better quality than Android's, so I'd choose this one. Even if the next generation of Apple mobile phones don't have much of an obvious upgrade, as long as the ecosystem of the IOS Apps still exists, for me the it's still much better value than Android," he said.
Apple's market capitalisation of 449 billion U.S. dollars makes it the world's most valuable publicly traded company.
But it's share of the China smartphone market slipped to 5 percent in the second quarter, according to research firm Canalys, trailing not just South Korea's Samsung but also Chinese brands Lenovo, ZTE, Huawei and Xiaomi.
Xiaomi, a company just three years old, has been dubbed as China's Apple, and its billionaire, black shirt and jeans-wearing CEO Lei Jun compared to Steve Jobs.
The company has poached senior Google Android executive Hugo Barra, who appeared for the first time with the company at an event in Beijing last week.
The new smartphone being launched cost just 1999 yuan (330 U.S. dollars), and their hugely popular smartphone, the Hongmi, sells for even less, at 130 U.S. dollars.
"So Apple is no longer the cool, aspiration purchase that Chinese twenty-somethings all want. Their brand image has really deteriorated in the last quarter, and young Chinese all want Chinese brands like Xiaomi, and even Lenovo. Because these are at the right price point. They're about 30 to 40 percent cheaper than Apple, but actually they have all the same bells and whistles as Apple. Apple hasn't been innovating and coming out with new cool products in the last six to nine months," said Shaun Rein, managing director of China Market Research Group, earlier this week.
The launch of the 5S, with its finger print scanner, may boost Apple's profile in China, but it has a real fight on its hands if it wants to win over the average buyer. - Copyright Holder: FILE REUTERS (CAN SELL)
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