Apple’s new phone unlikely to capture China

Apple badly needs another smash hit in China.

However, the new iPhone isn’t it. The world’s most valuable company is counting on the latest iteration of its flagship product to regain the top spot in the world’s largest smartphone market.

However, unlike in years past, the iPhone 7 offers little that resonates with Chinese consumers: No affordable models such as the SE or 5C, a radical redesign, new colours — anything that lets people know at a glance that it’s the latest and greatest.

The gadget does feature camera upgrades, a faster processor, longer battery life and a water- and dust-resistant design.

However, its size and shape aren’t dramatically different. As such, the device may get a frostier reception in China than the 2014 iPhone 6, which briefly propelled Apple to No 1 in a country where one out of every three smartphones on the planet is sold.

The California-based company has since lost ground to local names such as Huawei and Oppo, which exploited Apple’s strictly uniform design by experimenting with new features that appeal to enthusiasts: Fast charging, out-sized storage, dual cameras, and models that support multiple carriers.

“The fact is it’s not really good enough” to recapture the lead, said Jin Di, an analyst at retailers IDC. “There’s no innovation and little improvement.”

IDC spoke as part of a regular industry survey which expects sales of the device to miss the iPhone 6’s record showing, and to generally match instead the iPhone 6S and iPhone 6S Plus upgrades of 2015. Full-number years signal a more fundamental redesign and traditionally sell better.

“We just lowered our expectations [for the iPhone] and that is because Apple is not able to deliver a good customer experience, and they can’t offer the new transformative technologies in the smartphones,” said Ms Di, declining to specify her forecasts.

China had for years driven Apple’s spectacular growth, even as smartphone demand elsewhere faltered.

However, the country’s slowdown, regulatory tangles and critically the ascendancy of cheaper but just-as-good local alternatives took their toll.

While a 16-gigabyte iPhone 6S starts at 5,288 yuan (€705) Huawei’s top-of-the-range P9 goes for 3,688 yuan and includes 64 gigabytes of storage, a fingerprint scanner and dual cameras.

Apple slipped to fifth place last quarter after its revenue from greater China — which includes Hong Kong and Taiwan — slid 33%.

The country is pivotal to the business, especially with developed markets saturated and Apple still exploring promising countries such as India, where price is king and the US company barely registers in market rankings.

And with an estimated four times as many users as the US, China is key also to Apple getting more revenue from content and services. On his most recent earnings call, CEO Tim Cook said Apple’s sales in China are strongest after a new iPhone is unveiled.

Apple has said it is extending its iPhone upgrade subscription programme to Asia’s largest economy.

The smartphone market has fundamentally changed since the first iPhone emerged in 2007. Back then, Apple marketed the device as a lifestyle accessory.


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