Apple’s newest and most expensive iPhone, the iPhone X, isn’t even available for pre-order yet. But I’m going to make a not-so-bold prediction: the iPhone X is going to do very well in China.
Apple has been having a rough go of things in the Middle Kingdom in recent years. The once-king has long since been knocked from its perch as smartphone sales leader, and iPhone revenues have been dropping from model to model since the iPhone 6.
To be clear: Apple probably isn’t ever going to become the top smartphone seller by units sold again. China’s growing consumer class has increasingly expensive taste in phones, but it almost certainly doesn’t extend as high as the nearly-US$1,300 iPhone X (import duties make it more expensive in China than almost anywhere else), and the moderate updates in the iPhone 8 seem unlikely to excite anyone. That doesn’t matter, though, because the iPhone X is going to help Apple regain a different crown: the status-symbol phone.
When the first few models of the iPhone released in China, Chinese consumers were impressed by the both the product and the price. Most people couldn’t afford one, and that fact helped propel the rise of domestic players like Xiaomi who offered similar performance for much, much less money. But among those who could afford it, the iPhones were a kind of status symbol. They were a sign of success, but a reasonably affordable one.
China’s upper class and its growing upper-middle class had developed a taste for Western luxury brands, and in those early days Apple was one of them. Whipping one out in public was a great way to earn some envious stares. Giving them to a girlfriend was like giving her a diamond, but better – it proved that you were spendy and tech-savvy. They were also excellent for bribes.
I think we’re going to hear a happy Tim Cook in Apple’s next post-holiday earnings call
As the years went by, however, the iPhone lost some of its luster. Part of the problem was that as China’s economy grew, more and more people could afford iPhones. If half the people in your business meeting whip out iPhones, your iPhone isn’t impressing anybody. Part of the problem was also that the iPhone’s external design stopped changing. In the early days, anyone could see the difference between an iPhone 3G and an iPhone 4. But the iPhones 6, 6s, and 7 all look pretty similar, which makes them less appealing as a luxury item. What’s the point of buying a status symbol if everyone’s just going to think it’s a phone from three years ago?
It shouldn’t be difficult to see how – for a particular demographic – the iPhone X addresses all of these problems. Thanks to the bezel-less screen it’s the most unique-looking iPhone model in years. And the sky-high price pushes it firmly back into the realm of luxury for most of the population. In fact, unlike the iPhone 8, the iPhone X costs more than the average Chinese worker makes in a month even in the top-paying city (Beijing). Whip an iPhone X out on the street this November and heads are going to turn in a way that they haven’t for iPhones for years.
I want to emphasize that I’m not suggesting Chinese people are all vain idiots who’ll just buy the highest-priced phone. But China, like every country, certainly has plenty of vain people, and the iPhone X also looks like it’s going to be a great phone. It’s not just a status symbol, but the fact that it can serve as one again is going to pull back a demographic that Apple had been losing (or at least losing the interest of).
For example: I think Apple China’s going to sell more iPhone Xs as gifts this holiday season than it has in years. Nothing says “I want the best for you…and I can afford it!” quite like a US$1,300 phone. It’s going to be an impressive gift in a way that previous models of the phone simply haven’t been, and that’s going to help Apple’s revenue numbers.
Of course, the fact that Apple will get a few hundred dollars extra in the revenue column for every iPhone X sold doesn’t hurt either.
I’m not nearly as confident in the success of the iPhone 8, which seems a bit like the worst of both worlds – not as affordable as an earlier iPhone model, not as cool as an iPhone X. But even if it bombs, I think we’re going to hear a happy Tim Cook when China comes up in Apple’s next post-holiday earnings call.
This post Opinion: iPhone X will sell like hotcakes in China appeared first on Tech in Asia.
from Tech in Asia https://www.techinasia.com/apple-sell-ton-iphone-xs-china
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