SEPT 18- The iPhone’s magic as China’s must-have smartphone is eroding. Last year, eager buyers in Beijing waited overnight in freezing weather to buy the iPhone 4S.
Pressure to get it – and the profit to be made by reselling scarce phones – prompted some to pelt the store with eggs when Apple, worried about the size of the crowd, postponed opening.
Just 18 months later, many Chinese gadget lovers responded with a shrug this week when Apple Inc. unveiled two new versions of the iPhone 5. Today’s market is glutted with alternatives from Samsung to bargain-priced local brands.
That lackluster reception suggests Apple faces a struggle in defending its shrinking share of China’s crowded, increasingly competitive smartphone market and its premium prices.
That matters, because China is a key part of Apple’s growth plans. CEO Tim Cook told the official Xinhua News Agency in January he expects this country to pass the United States as its biggest market.
Earlier iPhones became status symbols in China even before they were formally sold here.
Buyers paid hundreds of dollars for handsets brought in from Hong Kong and modified to work on China’s phone network. Companies treated them as luxury goods, buying hundreds at a time to give to important customers as Chinese New Year’s gifts.
Now, Apple faces increasing competition. Samsung has made inroads into its premium market segment. For the mass market in a country with an average annual income of only about $4,000 per person, less than one-tenth the U.S. level, newcomers such as China’s Xiaomi offer smartphones that run Google Inc.’s Android system for as little as 799 yuan ($125).
The rapid growth of the lower segments where Apple doesn’t compete has helped to shrink its share of the overall market even as its sales grow.
Apple’s share of China’s smartphone market fell by nearly half, from 9.1 percent to 4.8 percent, over the past year, according to research firm Canalys.
Apple also disappointed observers by failing to announce an agreement with China Mobile Ltd., the world’s biggest phone company by number of subscribers, though Apple had promised no deal.
INDIA TODAY
