News From Terre Haute, Indiana

Z_CNHI News Service

September 19, 2013

Apple ends China's three-month iPhone delay

BEIJING — Apple used to make its China fans wait three months to get the latest iPhone. Now the company can't afford to leave them behind.

For the first time, Apple will release its newest handsets in China on the same day as the U.S., Europe and Japan. The iPhone 5s and lower-cost 5c go on sale tomorrow in Apple's 11 stores in China and Hong Kong as the company tries to boost sagging market share in the world's most populous nation.

Apple Chief Executive Officer Tim Cook, looking to reignite growth after a year of not releasing any new products, is counting on iPhone customers in China to give it a fresh boost. That goal will be challenged by a diminishing technology edge versus Samsung Electronics Co., a slew of more affordable devices from local phonemakers and the lack of a distribution agreement with China Mobile Ltd., the biggest carrier.

"The iPhone is too expensive for me, I could never afford it," said Li Guang, 25, a department-store clerk in Beijing. "If I were buying a smartphone for myself, I'd never spend more than 3,000 yuan."

The lowest-priced iPhone 5c, with a plastic shell coming in five colors, will sell for 4,488 yuan ($733), almost equivalent to two months' pay for a typical urban worker, based on figures from the National Bureau of Statistics.

Li, who uses a secondhand iPhone 4S passed down by a friend, has no plans to upgrade to the 5c or 5s, she said while taking a smoking break from luggage shopping at Beijing's 77th Street Plaza.

That sentiment concerns investors in the Cupertino, Calif.-based company, which saw its market share in China cut by almost half in the second quarter, dropping it to seventh place. Apple's stock fell 8 percent in the first five trading days after the prices of the new iPhones were disclosed.

"We never had an objective to sell a low-cost phone," Cook said in an interview in Bloomberg Businessweek's Sept. 23 issue. "Our primary objective is to sell a great phone and provide a great experience, and we figured out a way to do it at a lower cost."

The weaker interest from consumers like Li is a sharp turn from January 2012, when angry buyers threw eggs at Apple's store in Beijing's Sanlitun district after it failed to open on time for the first day of iPhone 4S sales. That handset was released in China three months behind the start of U.S. sales in October 2011.

The iPhone 5 came to China in December 2012, three months after its September 2012 release in the U.S.

Cook visited China at least twice this year and said the country will overtake the U.S. as its largest market. While sales in the country fell 14 percent to $4.6 billion last quarter, China is now Apple's third-largest region by sales, after the Americas and Europe.

A few years ago, sales in the country totaled only "hundreds of millions" of dollars a year, Cook said in July.

Kitty Potter, a Beijing-based spokeswoman for Apple, declined to comment on demand for the new iPhone models.

A challenge for Apple is that 80 percent of smartphone shipments in China in the second quarter were priced below $400, said Jessica Kwee, a Singapore-based analyst with researcher Canalys. Apple trails Samsung and domestic vendors Lenovo Group, China Wireless Technologies Ltd.'s Coolpad, ZTE Corp., Huawei Technologies Co. and Xiaomi Corp.

Xiaomi's newest handset costs 1,999 yuan, and Lenovo's flagship K900 IdeaPhone sells for 3,299 yuan.

"The new devices are not likely to widen the iPhone's mass appeal" in China, Kwee said. "The unsubsidized price of the new devices is too high for mass adoption."

Apple still has a big opportunity by appealing to more wealthy customers in China, said Carl Howe, an analyst at Yankee Group in Boston. Many Chinese consumers view the iPhone like owning a luxury car and will pay the premium, he said.

"A lot of us in the West underestimate just how big the affluent Chinese market is," Howe said. "Even though China has a lower percentage of wealthy individuals than here in the West, the absolute number of affluent Chinese who can afford an iPhone is still higher than a country like the United States."

Subsidies from Apple's two carrier partners in China, China Unicom (Hong Kong) Ltd. and China Telecom Corp., can help make the devices more affordable, and on some plans even provide free handsets.

Even so, Apple isn't getting the same support from Chinese carriers that it enjoys in the U.S., where companies like AT&T Inc. and Verizon Wireless offer the iPhone 5c for as little as $99 to entice customers to sign up for a two-year contract. That backing has helped make the iPhone the top-selling smartphone in the U.S., according to ComScore Inc.

In China, wireless carriers are looking to rein in costs from adding new users. China Telecom, the third-largest wireless company in China, requires customers to make a down payment for the cost of the handset: 4,488 yuan for any plan with a 16- gigabyte iPhone 5c, and 5,288 yuan for the iPhone 5s, according to the company's website. Portions of that payment are given back in monthly installments depending on the contract, meaning a customer still needs to come up with the cost of an iPhone.

With a monthly plan costing 289 yuan for two years, the China Telecom subsidy works out to 2,890 yuan, or 15 percent less than the previous model on the same plan, according to Eva Yip, a Hong Kong-based analyst at Sun Hung Kai Financial Ltd.

By releasing the iPhone on the same day in China as other countries, Apple may also shrink demand for the so-called gray market, when people would take advantage of the sales lag by purchasing iPhones or iPads in the U.S. and then selling them in China. In previous Apple releases, lines in the U.S. were crowded with shoppers who said they had been hired to purchase devices that would then be resold in China.

Apple's best chance to boost sales may come from the world's largest carrier by subscribers. Apple is near a deal with China Mobile to distribute the iPhone, a person familiar with the talks has said. That would open up more than 745 million new potential customers for Apple.

Until then, Apple will have to hope for a change of heart among diehard fans like Chen Lang, who said he can't afford to upgrade to a 5c or 5s right now. Chen, a 24-year-old who just started working at a car dealership, said he plans to keep using the iPhone 4 he bought two years ago.

"I'm at a point where I need to be saving money," Chen said outside Apple's Joy City Mall store in Beijing's Xidan shopping district. "When it does come time to replace it, I'll stick with Apple."

1
Text Only | Photo Reprints
Z_CNHI News Service
  • Affirmative action ruling challenges colleges seeking diversity

    The U.S. Supreme Court's support of Michigan's ban on race-based affirmative action in university admissions may spur colleges to find new ways to achieve diversity without using racial preferences.

    April 23, 2014

  • A 'wearable robot' helps her walk again

    Science is about facts, numbers, laws and formulas. To be really good at it, you need to spend a lot of time in school. But science is also about something more: dreaming big and helping people.

    April 23, 2014

  • Cuba is running out of condoms

    The newest item on Cuba's list of dwindling commodities is condoms, which are now reportedly in short supply. In response, the Cuban government has approved the sale of expired condoms.

    April 23, 2014

  • The waffle taco's biggest enemy isn't McDonald's. It's consumer habits.

    Gesturing to Taco Bell, Thompson said McDonald's had "not seen an impact relative to the most recent competitor that entered the [breakfast] space," and that new competition would only make McDonald's pursue breakfast more aggressively.

    April 23, 2014

  • Screen Shot 2014-04-22 at 4.42.47 PM.png VIDEO: Leopard attacks crowd in India

    A leopard caused panic in the city of Chandrapur when it sprung from the roof of a house and charged at rescue workers.

    April 22, 2014 1 Photo

  • The top 12 government programs ever

    Which federal programs and policies succeed in being cost-effective and targeting those who need them most? These two tests are obvious: After all, why would we spend taxpayers' money on a program that isn't worth what it costs or helps those who do not need help?

    April 22, 2014

  • In cuffs... 'Warlock' in West Virginia accused of sexual assault

    Police in West Virginia say a man claiming to be a “warlock” used promises of magical spells to lure children into committing sexual acts with him.

    April 22, 2014 1 Photo

  • Lindley, Tom.jpg Basketball stars may linger on campus a while longer

    The NBA seems serious about raising its minimum age, which could signal the end of the one-and-done era in college basketball.

    April 22, 2014 1 Photo

  • Cats outsmart the researchers

    I knew a lot had been written about dogs, and I assumed there must be at least a handful of studies on cats. But after weeks of scouring the scientific world for someone - anyone - who studied how cats think, all I was left with was this statement, laughed over the phone to me by one of the world's top animal cognition experts, a Hungarian scientist named Ádám Miklósi.

    April 22, 2014

  • McCain 1 House Republicans are more active on Twitter than Democrats

    Your representative in the House is almost certainly on Twitter. Your senator definitely is. But how are they using the social network? Are Democrats more active than Republicans, or vice versa? Who has the most followers on the Hill?

    April 22, 2014 1 Photo

  • Do your genes make you procrastinate?

    Procrastinators, in my experience, like nothing better than explaining away their procrastination: General busyness, fear of failure, and simple laziness are just a handful of the excuses and theories often tossed around. Now researchers from the University of Colorado Boulder have added another option to the list: genetics.

    April 21, 2014

  • Do White Castle prices tell us anything about the minimum wage?

    The paper looked at how many delicious steamed sliders the minimum wage has been able to purchase over time. The point is that as it notes, in 1981, the $3.35 minimum could buy a whole dozen. Today, at $7.25, it could purchase just 10.

    April 21, 2014

  • VIDEO: Moose charges snowmobile, flees after warning shot

    While snowmobiling in New England, Bob and Janis Powell of Maine were charged by a moose and caught the entire attack on camera.

    April 21, 2014

  • Can Hillary Clinton rock the cradle and the world?

    What's most interesting to contemplate is the effect becoming a grandmother will have on Hillary's ambition. It's one of life's unfairnesses that a woman's peak career years often coincide with her peak childbearing years.

    April 21, 2014

  • Screen shot 2014-04-18 at 4.44.15 PM.png Paint, doodle and sketch: 3 apps for art lovers

    In the absence of a palette of watercolors and a sketchpad, these three apps can fill in as your art supplies of choice.

    April 18, 2014 1 Photo

  • Smartphone kill switches are coming

    Smartphones need kill switches. It's a relatively easy solution to the pricey (and irritating) problem of smartphone theft. But who would have thought that the big carriers would team up with Apple, Google, Microsoft, Nokia, Samsung and lots of other manufacturers to voluntarily begin adding the technology by July 2015? The cooperative spirit! It makes so much sense!

    April 18, 2014

  • Why do wolves howl?

    Of all the myths that dog the wolf, none is more widely accepted than the idea that wolves howl at the moon. Images of wolves with their heads upturned, singing at the night sky, are as unquestioned as a goldfish's three-second memory or a dog's color-blindness (both also myths).

    April 18, 2014

  • Biggest student loan profits come from grad students

    This week, the Congressional Budget Office projected that the federal government would earn roughly $127 billion from student lending during the next 10 years.

    April 18, 2014

  • quake.jpg Pennsylvania won’t take action following Ohio ruling on quakes, fracking

    Pennsylvania officials plan no action despite new Ohio rules on drilling that affect a seismically active area near the state line.

    April 18, 2014 1 Photo

  • taylor.armerding.jpg Warren's populist pitch on student loans is off key

    Sen. Elizabeth Warren's populist rhetoric pumps up students about their loan burdens, but she conveniently neglects to mention the real problem - the exorbitant cost of college - much less how she's benefitted from those high prices.

    April 18, 2014 1 Photo

  • VIDEO: Boston bomb scare defendant appears in court

    The man accused of carrying a backpack containing a rice cooker near the Boston Marathon finish line on the anniversary of the bombings was arraigned Wednesday. He's being held on $100,000 bail.

    April 17, 2014

  • Consumer spending on health care jumps as Affordable Care Act takes hold

    Nancy Beigel has known since September that she would need hernia surgery. She couldn't afford it on her $11,000 yearly income until she became eligible for Medicaid in January through President Barack Obama's signature health care law.

    April 17, 2014

  • Lindley, Tom.jpg Golf turns into snooze-fest without celebrities like Tiger and Phil

    The Masters lumbered on last week without two of pro golf's biggest names, Tiger Woods and Phil Mickelson, and fans changed the channel. The PGA needs someone with star power if it's going to lure people back to the game.

    April 17, 2014 1 Photo

  • The case for separate beds

    The other night I slept on a twin bed in the guest room of the house I share with my husband and our two kids.
    It was the best night's sleep I've had in years.

    April 17, 2014

  • Raw oysters spike U.S. rise in bacterial infections, CDC reports

    Raw oysters, so good with hot sauce, increasingly can carry something even more unsettling to the stomach: A bacteria linked to vomiting, diarrhea and pain.

    April 17, 2014

  • To sleep well, you may need to adjust what you eat and when

    Sleep.  Oh, to sleep.  A good night's sleep is often a struggle for more than half of American adults.  And for occasional insomnia, there are good reasons to avoid using medications, whether over-the-counter or prescription.

    April 16, 2014

  • Doctors to rate cost effectiveness of expensive cancer drugs

    The world's largest organization of cancer doctors plans to rate the cost effectiveness of expensive oncology drugs, and will urge physicians to use the ratings to discuss the costs with their patients.

    April 16, 2014

  • Low blood-sugar levels make for grousing spouses

    Husbands and wives reported being most unhappy with their spouses when their blood-sugar levels were lowest, usually at night, according to research released this week in the Proceedings of the National Academy of Sciences. Missing a meal, dieting or just being hungry may be the reason, researchers said.

    April 16, 2014

  • Screen Shot 2014-04-16 at 12.51.22 PM.png VIDEO: Toddler climbs into vending machine

    A child is safe after climbing into and getting stuck inside a claw crane machine at a Lincoln, Neb., bowling alley Monday.

    April 16, 2014 1 Photo

  • portraitoflotte.jpg VIDEO: From infant to teen in four minutes

    Dutch filmmaker Frans Hofmeester’s time lapse video of his daughter, Lotte — created by filming her every week from her birth until she turned 14 — has become a viral sensation.

    April 16, 2014 1 Photo

Latest News
TribStar.com Poll
AP Video
Raw: What's Inside a Commercial Jet Wheel Well Raw: Obama Arrives in Japan for State Visit Motels Near Disney Fighting Homeless Problem Michigan Man Sees Thanks to 'bionic Eye' U.S. Paratroopers in Poland, Amid Ukraine Crisis Raw: Deadly Bombing in Egypt S.C. Man Apologizes for Naked Walk in Wal-Mart Raw: Leopard Bites Man in India Air Force: $4.2B Saved From Grounding A-10s Raw: Anti-Obama Activists Fight Manila Police Raw: Violence Erupts in Rio Near Olympic Venue Bon Jovi Helps Open Low-income Housing in Philly Obama to Oso: We'll Be Here As Long As It Takes 'Piles' of Bodies in South Sudan Slaughter Cubs Superfans Celebrate Wrigley's 100th Admirers Flock to Dole During Kansas Homecoming Raw: Erupting Volcanoes in Guatemala and Peru Pipeline Opponents Protest on National Mall US Reviews Clemency for Certain Inmates Raw: Cattle Truck Overturns in Texas
NDN Video
Michael Strahan's First Day on "GMA" Amazon's Deal With HBO Leapfrogs Streaming Rivals Stephen Colbert Tells David Letterman His Plan for 'Late Show' Georgetown police officer filmed tripping students Viral: It's Not Pitbull - It's Amy Poehler! Recycling Highlights for Earth Day Lupita Nyong'o Named People's 'Most Beautiful' Peeps Launched into Outer Space NYPD's Twitter Request For Photos Backfires New HBO Go Commercials Capture Awkward Family TV Watching Raw: Leopard Bites Man in India Rise of the Milkbots Jenna Dewan-Tatum Strips Down TRENDING: Brian Williams Raps 'Gin and Juice' on ‘Tonight Show’ Middle School heroes rescue students from burning bus WHOPPER OF FISHING STORY: Florida man catches massive Mako shark Maks Chmerkovskiy's "DWTS" Meltdown The many faces of Mike Woodson Ape Builds A Fire And Toasts Marshmallows In Amazing BBC Video Manchester Utd sack manager David Moyes
Parade
Magazine

Click HERE to read all your Parade favorites including Hollywood Wire, Celebrity interviews and photo galleries, Food recipes and cooking tips, Games and lots more.
  • -

     

    March 12, 2010

activity