$1,000 price tag dampens iPhone 8 interest in China

Apple is poised to launch its expected iPhone 8, hoping the number’s auspicious connotations in China will help turn around fortunes in the world’s biggest smartphone market after six quarters of falling sales.

$1,000 price tag dampens iPhone 8 interest in China

Chinese shoppers, however, are already counting the cost, with the latest model tipped to have a price tag upward of $1,000 (€834) — roughly double the average Chinese monthly salary.

The success of Apple’s next iPhone in China is crucial for the firm, which has seen its once-coveted phone slip into fifth position in China behind offerings from local rivals Huawei Technologies Co, Oppo, Vivo and Xiaomi. Greater China, which for Apple includes Taiwan and Hong Kong, accounted for roughly 18% of iPhone sales in the quarter ended in July, making it the company’s top market after the US and Europe. Yet those sales have been declining steadily and are down 10% from a year earlier, in contrast with growth in all other regions. And the iPhone’s share of China’s smartphone shipments fell to 9% in January-June, down from 14% in 2015, according to data from consultancy Counterpoint Research.

While the iPhone 6 took China by storm in 2014, models since have received a more muted response. “I’ll wait for a drop in price, it’s too expensive,” said Angie Chen, 23, a project manager in Nanjing and iPhone 6 owner. Ms Chen said she might even wait for the new phone’s successor, when prices will fall. Eight is the luckiest number in China because it sounds similar to the phrase meaning “to get rich”.

“Apple really needs to launch a very innovative product this time around,” said Mo Jia, Shanghai-based analyst at Canalys. However, the rising clout of local rivals would nevertheless make life tough for the US firm, he said. “It has its work cut out.”

The iPhone 7 suffered from the perception it was too similar to earlier models. This time, despite talk of wireless charging, advanced touch screen and facial recognition technology, the Chinese fans are yet to replicate the online mania around previous iPhone launches.

Mentions of iPhone 8 on popular Chinese social media platform Weibo — an indicator of consumer interest — were running slightly ahead of the similar period before the iPhone 7 launch, but were far more muted than with the iPhone 6. One effect of Apple’s costliest phone to date will be the rise of sales on credit. Wang Yang, who runs a bricks-and-mortar smartphone store in Beijing’s largest tech market, said he expected more purchases online this time, as consumers make payments by instalment.

Reuters

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