Will the iPhone 5 matter in China? - CNET

Apple products are popular in China, often seen as status symbols. But the iPhone 5 looks a lot like the earlier 4S, which may dampen its appeal.
(Credit: Jeff Eisenhauer/CNET Asia)

Last week, Apple finally announced the release date for the iPhone 5. Apple plans to ship the new smartphone starting September 21, but failed to mention when it would reach China. Perhaps China is one of those "100 countries" getting it by the end of the year mentioned by Phil Schiller (senior vice president at Apple) during the keynote, but that's still a mystery for now.

While past iPhones have sold well in China, Apple faces stiff competition from Android phones that have similar features and are often less expensive. Even the new new Lumia 920 with its advanced camera technology and Windows 8 OS seems more innovative then the iPhone 5, which sports a longer screen and thinner body. In fact, a popular meme on Weibo shows the "iPhone 10" with a comically long screen.

The iPhone 10.
(Credit: PEdaily.cn/Weibo)

If you followed the IFA tradeshow, you'd know that the smartphone market is more than a two horse race between Apple and Samsung. Lenovo was a leading China producer in Q2 and Sony, Nokia and a number of others have raised their game. At 4,488 yuan (US$710) now, the iPhone 4S is still one of the most expensive handsets in this market. Many people pay that premium just for the slick design that tells everyone you can afford luxury, but the iPhone 5 looks only slightly different compared with the 4S.

The iPhone 5 has received a lot of attention on Weibo, but reactions have been mixed. Sina.com claims that of 36,000 people surveyed, 48.1 percent said they wouldn't buy the new iPhone. Meanwhile only 27.3 said they would. The iPhone 5 does not appear to have the intrinsic cool factor of previous versions leading many consumers to take a more cautious approach to upgrading their phone.

The Apple rumor that could really boost the company's status in China is a looming deal with China Mobile--the largest mobile carrier in the world with 683.1 million subscribers. According to CNBC, the two companies are ready to sign an agreement with the small stipulation that the iPhones are configured for the China Mobile network with Qualcomm chips. China Mobile has attained its dominance by targeting rural neophytes and not just the eastern metropolises. In the same report, an HSBC analyst believes that Apple could see an additional 27.3 million iPhones sold if China Mobile's high-end users can be convinced to switch to the iPhone 5.

Technology often reaches China later than other countries due to government regulations. Carriers here also have to prepare for the iPhone 5's nano-SIM, though many companies are already claiming the ability to cut existing SIM cards to fit. It only underscores how the Chinese market, while big and attractive, is unique. Even powerful companies like Apple must employ China-specific strategies to be competitive. More importantly, the prized middle class can easily be won over by Chinese firms who are better prepared to think locally. For the time being, expect the iPhone 5 to sell well (mostly through the gray market, initially) in China, but not set any records.

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