iPhone 6 Rumors May Be Delaying Chinese Smartphone Purchases

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iPhone 6 Rumors May Be Delaying Chinese Smartphone Purchases
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The great expectations for the iPhone 6 continue, as people keep making excuses for why demand for the iPhone 5S has been rather weak in China. Cantor Fitzgerald analyst Brian White has been on a technology tour of China for the last several days. One of the meetings he attended was with two mobile carriers and a smartphone vendor.

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Apple competitors gaining momentum in China

White said he found that Chinese and Asian handset makers have begun to gain momentum in China. Specifically, they named Xiaomi, Coolpad, ZTE Corp. (HKG:763) (SHE:000063), Lenovo Group Ltd. (OTCPINK:LNVGY) (HKG:0992) and Huawei Technology Co Ltd (SHE:002502). They also said that these companies are beginning to take a chunk out of both Apple Inc. (NASDAQ:AAPL)’s and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930)’s smartphone sales.

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However, all of the companies which are seeing growth in China sell low-end end handsets, which suggests that the brands are not competing against Apple Inc. (NASDAQ:AAPL). Data indicates that the iPhone supposedly makes up 80% of premium smartphones in China.

Chinese carriers hope for iPhone 6

White states that carriers have been disappointed about demand for the iPhone 5S. However, they believe that some customers are just holding out for the iPhone 6, which most expect to have a larger display which will be nearly 5 inches in size.

White believes that a bigger iPhone 6 will “meaningfully accelerate” Apple Inc. (NASDAQ:AAPL)’s growth in China in the second half of this year. He said he hasn’t heard “this type of excitement in China around the iPhone in at least two years” and believes that this could be “a very special iPhone launch.”

China Mobile hopes haven’t panned out yet

Many analysts were hanging their hopes that the launch of Apple Inc. (NASDAQ:AAPL)’s iPhone on the China Mobile Ltd. (ADR) (NYSE:CHL) (HKG:941) network would accelerate growth in China. However, that hasn’t happened, at least not yet, anyway. Now apparently they’re looking to the iPhone 6 to speed up growth, and if that doesn’t work, it’s likely they’ll come up with some other future event which they believe will spur growth for Apple in China.

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Michelle Jones is editor-in-chief for ValueWalk.com and has been with the site since 2012. Previously, she was a television news producer for eight years. She produced the morning news programs for the NBC affiliates in Evansville, Indiana and Huntsville, Alabama and spent a short time at the CBS affiliate in Huntsville. She has experience as a writer and public relations expert for a wide variety of businesses. Email her at Mjones@valuewalk.com.
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