Apple Watch may face tough times in China

Tim Cook, CEO of Apple Inc, introduces the Apple Watch in San Francisco, California, March 9, 2015. The wearable device will be available on the Chinese mainland and Hong Kong starting from April 24.[Photo/Agencies]

Apple Inc's first wearable, the Apple Watch, is "exciting" yet "less appealing" to Chinese buyers, industry experts said on Tuesday.

Although the glamorous-looking gadget unveiled by Chief Executive Officer Tim Cook does have some tailor-made features for the China market, a number of its obvious shortcomings, such as the ultra-short battery life and jaw-dropping price tag, are set to undermine its sales performance, they said.

The device, which Cook called "the most personal device we have ever created", will be available for purchase on the Chinese mainland and Hong Kong starting April 24. The latest addition to the Apple family supports WeChat, Tencent Holdings Ltd's messaging app that boasts 468 million users. Online shopping giant Alibaba Group Holding Ltd's mobile payment feature was also added to the smartwatch.

"Since what you wear is an expression of who you are, we designed the Apple Watch to appeal to a whole variety of people with different tastes and different preferences," Cook said during his presentation.

Having features tailored for Chinese buyers reflects the importance of China to the world's most valuable tech company, the experts said.

Nicole Peng, research director at Canalys China, said: "I believe (the Apple Watch) is an exciting product and it has created the 'want' from consumers, rather than the 'need'."

"In terms of features, I believe the heart rate monitor will be an important deal breaker if it can provide highly accurate data," Peng said.

James McQuivey, an analyst from Forrester Research Inc, estimated the Cupertino, California-based company can easily sell about 10 million smartwatches by the end of this year.

"The Apple Watch will at last fully launch the wrist-based wearables category. With it, Apple will propel the rest of the wearables market to move forward," McQuivey said. The research firm admitted the United States and other developed markets where people are more willing to buy wearables, will be the biggest market for the gadget.

The Apple Watch will make Chinese people excited about high-end wearables but the product is not likely to see a purchase spree similar to the iPhone 6/6 Plus.

Ge Hantao, a senior researcher at Beijing-based consultancy Analysys International, said its 19-hour battery life, high retail price and heavy dependency on the iPhones will greatly limit sales.

Many users may not get to use some of the functions because only smartphones launched after the iPhone 5 are fully compatible with the Apple Watch. The device can answer phone calls, receive e-mails and monitor basic health data only when paired with an iPhone.

The price is also likely to keep away large numbers of potential buyers in China, according to Ge. The smartwatch is selling at 2,588 yuan ($413) for entry-level products and 126,800 yuan for the luxury range.

Vibrant iPhone sales in China are prompting Apple to pay more attention to local customer needs. The company has 18 brick-and-mortar stores on the Chinese mainland and the number is expected to reach 40 by mid-2016, according to Cook.

Apple will have about a year to cement its position in the country's high-end smartwatch market before local players fight back.

Huawei Technologies Co and Motorola Mobility, a Lenovo Group Ltd subsidiary, have already rolled out smartwatches. The companies are eager to bring these Android Wear-powered devices to China and the only obstacle to this is the unavailability of the Google operating system on the Chinese mainland.

Analysts estimate that the Apple Watch will face a strong challenge after Android-based smartwatches enter the market.