China is one of the biggest markets for Apple, and the launch of new iPhones is a big event in the country. However, this time things are different, as there are no lines outside Apple Stores there. Market watchers believe iPhone sales in China will be the weakest ever.
Less enthusiasm for new iPhones
Apple’s iPhone XS and iPhone XS Max debuted in China on Friday, but they received a lukewarm reception. Slow iPhone sales in China are evident from the fact that the black-market prices of the new iPhone models — except for the 512GB iPhone XS Max — dropped even below the official retail prices.
On Friday, scalpers were willing to pay up to to 2,000 yuan extra for the 512GB iPhone XS Max. All the other models could be purchased for less than their official retail prices because there was plenty of supply, according to local media outlets which spoke with scalpers. The 512GB iPhone XS Max is priced at 12,799 yuan ($1,867) on Apple’s website, which is about 30% more than the U.S. price.
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In Hong Kong, many who planned to resell the new iPhone only got HK$1 ($0.13) more than the official retail price, while some even got less. About a half-hour after sales started in the Apple Store, black-market buyers were paying only HK$300 to HK$500 more for the 512GB iPhone XS Max. Some were not even accepting the models with smaller storage.
The same was true with iPhone sales across the border in Shenzhen. One seller even claimed that iPhone sales in China are the worst seen in many years, according to the South China Morning Post.
Apple Watch stealing the show
The slow start for the new iPhones in China could be due to their high prices. However, Apple CEO Tim Cook justified the pricing recently, saying the iPhone XS and XS Max could replace all other gadgets. According to Cook, the new iPhones are the “most advanced” models ever.
Further, local media report that the new Apple Watch is compensating for the slow iPhone sales in China. According to the reports, more buyers are queuing outside the Apple Store for the Apple Watch than for the new iPhones. Apple’s website hints at the same thing, as watch buyers are getting a wait time of three to four weeks, which is twice the wait for the new iPhones.
Does the lack of lines mean slow iPhone sales in China?
Though some buyers were seen waiting outside the Apple Store to pick up their new iPhones on Friday, compared to last year, the lines were a big disappointment for Apple. The launch of the iPhone X last year drew massive crowds to the Apple Store.
Unlike the general belief, the shorter lines outside Apple Stores may not mean that iPhone sales in China are slowing. Unlike in other countries, in China and Hong Kong, one just can’t go inside the Apple Store on the first day to buy a new iPhone. In 2012, Apple halted sales of the iPhone 4S at the last minute after the staff panicked at the sight of the massive crowd. After stopping sales, those waiting outside turned violent, punched security guards and threw eggs at the store’s windows, forcing police to come in. Since then, Apple has been using an online reservation system in the country.
Under the online reservation system, interested buyers sign in using their Apple ID, and then they are sent a registration code via SMS. Users then enter that code with their phone number to get a time slot at their chosen Apple Store. Then they go to that store to pick up the new iPhone by presenting a valid national ID. However, in the U.S., there are reports that Apple’s computer purchase systems at some retail locations failed.