Apple is making a big splash in China -- again. Although the iPhone won’t arrive on China Mobile’s network for 18 more days the pre-orders are piling up.
According to Wedge Partners, China Mobile has taken about 100,000 pre-orders for the iPhone 5s and 5c in the first two days of availability alone. That bodes well for the smartphone maker and for its Asian carrier partner.
“What’s important to remember is these phones launched in September,” Wedge analyst Brian Blair told AllThingsD. “Now here we are several months later and there’s no subsidy being offered that’s so special that the pre-orders are off the charts. If this had been in September when the phone launched globally, I think the numbers would be a lot higher.”
A Growing Opportunity
Although Apple is already selling into China, the deal with China Mobile could take sales to new heights. China Mobile serves more than 760 million customers. But some analysts warn it might not be an automatic home run.
“China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world's largest network,” said Tim Cook, Apple CEO, when the company announced the partnership. “iPhone customers in China are an enthusiastic and rapidly growing group, and we can’t think of a better way to welcome in the Chinese New Year than getting an iPhone into the hands of every China Mobile who wants one.”
China Mobile has more than 1.2 million 2G/GSM, 3G/TD-SCDMA, 4G/TD-LTE base stations and over 4.2 million Wi-Fi access relevant products/services points, providing broad coverage to quality networks for iPhone 5s and iPhone 5c customers.
What’s more, China Mobile is rolling out the world’s largest 4G network. China Mobile had said that by this time 4G services would be available in 16 cities including Beijing, Shanghai, Guangzhou and Shenzhen. And by the end of 2014, China Mobile plans to complete the rollout of more than 500,000 4G base stations, which will cover more than 340 cities with 4G service.
Tim Cook Was Smart
With all this in mind, one of the biggest headlines from earlier this year makes even more sense. In March, Cook wrote an apology to Chinese consumers, noting he was sorry for the misunderstandings around its customer service warranty programs in the Far East. Cook also vowed to make changes to the policies.
Apple had been in the hot seat for weeks. The state-controlled media have unleashed a barrage of criticism against Apple's warranties, accusing the iPhone maker of treating China unfavorably compared with other nations. Apple at first denied there was any difference between its China warranty policies and those in other regions.
"We are aware that a lack of communications . . . led to the perception that Apple is arrogant and doesn't care or attach enough importance to consumer feedback," Cook said in a Wall Street Journal translation of the letter. The original letter is written in Chinese and published on Apple's China Web site. "We express our sincere apologies for any concerns or misunderstandings this gave consumers."