Fans cheer, but Asia gives iPhone 7 subdued welcome; China sales crucial

By Adam Jourdan and Tom Westbrook

SHANGHAI/SYDNEY (Reuters) – Apple Inc fans from Sydney to Shanghai, the first customers worldwide to snap the new iPhone 7 off the shelves, cheered as they left stores on Friday brandishing their purchases, flanked by applauding sales staff.

But underneath the usual fanfare, the crowds of enthusiasts and overnight campers were smaller than in past years. Some customers complained after the larger version and models with the new jet-black colour sold out.

Apple's new iPhone 7 is displayed after the new iPhone 7 went on sale at the Apple Store at Tokyo's Omotesando shopping district, Japan, September 16, 2016.    REUTERS/Issei Kato

Apple’s new iPhone 7 is displayed after the new iPhone 7 went on sale at the Apple Store at Tokyo’s Omotesando shopping district, Japan, September 16, 2016. REUTERS/Issei Kato

In part, online pre-ordering has made queues unnecessary for all but diehard fans, and in Chinese stores only those who had ordered in advance were queuing to collect.

Yet in markets like China, online interest in the new phone has also been muted compared to past launches, as cheaper local brands amp up their features, design and marketing.

Wu Ting, a 28-year-old from Nanjing, was surprised to find herself first in line at a downtown Apple store in Shanghai on Friday, a holiday in China.

“I found last year that there were crowds of people, but this year almost no-one. I came an hour early thinking I’d have to wait a long time before getting seen,” Wu said.

Sales in China will be the acid test for Apple’s year ahead: the success of the iPhone 6 in China drove sales last year, while the slower-burn 6S contributed to Apple’s first global revenue drop in over a decade earlier this year.

Chatter about the iPhone 7 launch on Chinese microblog Weibo has been far more muted than when the iPhone 6 debuted in 2014. An index of searches on Baidu Inc, China’s most popular search engine, shows the new phone lagging both the iPhone 6 and iPhone 5.

Apple’s Greater China sales dropped by a third in April-June, albeit after more than doubling a year earlier, while its market share has fallen to around 7.8 percent, placing it fifth behind local rivals Huawei, OPPO and Vivo.

Apple has been slower to adapt, consumers and analysts say: the new iPhone has few major changes to win over fickle shoppers and the firm’s marketing has been generic.

“From Steve Jobs to Tim Cook, Apple has never had any marketing strategy tailor-made for China,” said Zhou Zhanggui, a Beijing-based strategic consultant.

“Apple risks losing out more if it does not better cater to local demands in its marketing as well as product design.”

In Beijing’s fashionable Sanlitun shopping district, several people who had already grabbed new iPhone 7s were hawking them for a markup just outside a flagship store.

But Apple has not lost its shine for all customers.

Marcus Barsoum, a 16-year-old who described himself as a “diehard Apple fan”, spent two nights camped outside the Sydney store. By the morning, some 200 people were gathered in light rain to be the first customers globally to own iPhone 7s.

Weary but elated, Barsoum charged into the store at 8 a.m. to the cheers of Apple staff. He emerged with a matte black iPhone 7, although he had wanted a larger 7 plus in jet black.

“It feels great to be the first in the world to have the iPhone 7,” he said. “It was 100% worth it.”

(Additional reporting by Ben Blanchard in BEIJING, Sijia Jiang in HONG KONG, Shanghai Newsroom; Writing by John Ruwitch in SHANGHAI; Editing by Stephen Coates)



Categories: Asia Unhedged, China, Japan

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