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Last Updated : Sep 11, 2019 11:29 AM IST | Source: Reuters

Tepid reaction for Apple's new iPhones in China amid tough competition

Apple's unveiling of three new iPhones in California met with a limp reaction on Wednesday from analysts and on social media in China, where the U.S. giant has been losing ground to competitors in recent years.

The iPhone 11 Pro and 11 Pro Max were also launched alongside as Apple's premium iPhone models for 2019.
The iPhone 11 Pro and 11 Pro Max were also launched alongside as Apple's premium iPhone models for 2019.

A lower price tag and new features may not be enough for Apple Inc to win customers for its newly-launched iPhone 11 series in China, the world's largest smartphone market that is already crowded with cheaper and feature-packed rival handsets.

Apple's unveiling of three new iPhones in California met with a limp reaction on Wednesday from analysts and on social media in China, where the U.S. giant has been losing ground to competitors in recent years.

"More competitive aggressive pricing and a better camera would be its selling points, but the market is still full of challenges, both market competition and macroeconomic factors," said Will Wong, who tracks China's phone market at research firm IDC.

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The iPhone 11 will have two back cameras, including an ultra wide-angle lens and the next generation of microchips, the A13. Prices start at $699, down from last year's new iPhone that started at $749. Apple also dropped the price of last year's equivalent model iPhone XR by $150.

The more expensive iPhone 11 Pro will have three cameras on the back and starts at $999. The bigger screen iPhone 11 Pro Max starts at $1,099.

As anticipated, none will be fifth generation-enabled, which puts the phones a step behind 5G models already released by Huawei Technologies and smaller rival Vivo.

"Since we still have to wait a year for 5G, why not just buy Huawei on Monday," said one user on China's Twitter-like service Weibo.

One meme doing the rounds on social media featured Apple Chief Executive Tim Cook bragging about the new features and Richard Yu, CEO of Huawei's consumer business group, shutting him down by pointing out that Huawei has had those features for years.

When it came to features, one of the main draws of the new launch for U.S. buyers - a $5 per month Netflix-like streaming service - will not be available in China.

PRICE COMPETITION

Apple's share of the China market in the June quarter fell to 5.8% from 6.4% in the year earlier period, according to research firm Canalys, as Huawei experienced a surge in support from Chinese consumers after the brand was caught up in a trade war between the United States and China.

Counterpoint analyst Neil Shah said the entry price, while lowered by Apple, remains high compared to local rivals. Combined with the lack of 5G, that made the new iPhones "less attractive and future-proof" for Chinese consumers, Shah said, forecasting that Apple will sell 30-35 million iPhones in China this year, down from 63 million phones in 2015.

Still, some analysts said that Apple's decision to lower the entry price for the new iPhone, one of the most discussed topics on Weibo on Wednesday, was a positive sign.

"We think the lower iPhone 11 price point and trade-in program will help promote upgrades, specifically in China, while the Apple Arcade and TV+ offerings will hep accelerate services growth," CFRA analyst Angelo Zino said in a research note.

The new phones will be available to order on Friday and start shipping Sept. 20.

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First Published on Sep 11, 2019 11:27 am
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