A Frigid Launch for iPhone 5 in Beijing

Apple’s flagship store in Beijing’s upscale Sanlitun shopping district began selling the iPhone 5 for the first time on Friday in what was arguably the least eventful launch of an Apple device in the company’s four-year history in the Chinese capital.

Apple’s China product launches have been raucous affairs. On the first day of iPhone 4S sales in January, a delay in the opening of the Sanlitun store sparked a near-riot that led the Cupertino, Calif. company to temporarily suspend sales of the device in its stores across China. That fracas followed a fight between customers and Sanlitun store employees in May 2011 that broke out as Apple was releasing the coveted white iPhone 4.

Friday’s iPhone 5 launch was notable for a different kind of white: a rare accumulation of fresh snow that blanketed the nearly empty plaza outside the Sanlitun store.

At 8 am on Friday, when the store opened to hurrahs from employees, only two consumers stood inside a cordon set up by Apple, though they were joined by a desultory snow man someone had made on a bench near the entrance. It’s not clear how much of the low turnout was attributable to the weather, how much to slack initial excitement for the device, and how much to the steps Apple has taken to smooth out the process of releasing products in China.

Apple recently added new stores in Beijing and the southern city of Shenzhen, with another one set to open soon in the southwestern city of Chengdu. The company has also changed how it releases its most popular products in China, requiring customers to apply online a day before to buy new devices and those selected are given a time window in which they can come out to get the phone. Those selected are given a time window in which they can come out to pick up their purchase.

Tian Jisheng, one of the two waiting in the cold when the store opened, said the lottery was competitive. He said he used four identities to apply for phones, but was only given an appointment for one. “I thought I didn’t get it, but then after 8 pm I received a notice I had gotten one,” he said.


Wayne Ma/The Wall Street Journal
The snow man declined to comment on whether he thought the iPhone 5 would help Apple reclaim smartphone market share in China.
Mr. Tian wasn’t visibly excited, but he said he was happy when he emerged from the store with his new, black iPhone 5. He said he was surprised there wasn’t a larger crowd.

The cheapest model of the iPhone 5 is retailing for 5288 yuan ($850) in China, well above the $650 selling price in the U.S. The mark-up is one reason many Chinese going abroad purchase phones to bring back to the country. It also may help explain why one Chinese woman was recently Tasered at an Apple store in New Hampshire after insisting that she be allowed to buy more than two iPhone 5s.

High demand for Apple devices in China in the past has meant unauthorized resellers can turn a profit even by buying marked-up products direct from Apple’s retail stores in China. The same scalpers who kicked, swatted and pushed a Wall Street Journal reporter at the iPad Mini release last week were also at the store Friday morning, sharing jokes with security guards. As of 9:30 am the scalpers didn’t seem to have gotten their hands on any of the new phones. Instead they walked a mysterious circuit by the store, disappearing into an underground mall, only to come out through a different exit.

In China, Apple remains king of the high-end smartphone, but its status has slowly lost market share to phones running Google Inc.’s Android operating system offered by companies like Samsung Electronics Co. Android claimed 56% of the market for phones priced above 3,000 yuan ($480) in the third quarter, while Apple had 42%, according to research firm Analysys International. Android phones accounted for 2.8 million handsets, while iPhones totaled 2.1 million.

Apple’s China sales were $5.7 billion in the fiscal quarter through September, roughly 16% of the company’s global total. Chief Executive Tim Cook said in October that China continued to be a strong area of growth.

http://blogs.wsj.com