Podcast

Locals spooked by iPhone 4

Updated: 2010-07-23 11:41

Media reports of Apple's iPhone 4's reception-challenged antenna appear to be hurting gray-market sales and affecting prices of the device in China.

The price of the smuggled US version iPhone 4 in China's gray market dropped by about 70 percent from 20,000 yuan to 6,000 yuan within the last month, as antenna-related problems surfaced in the media.

The main reason for the sluggish sales may be Chinese customers are waiting for a clear-cut fix for the new product.

This may be bad news for Apple, which is set to launch the iPhone 4 in Hong Kong at the end of this month. Local media has also speculated that Apple and its Chinese partner, China Unicom, will launch the iPhone 4 in the mainland by the end of this year.

Vendors say potential buyers have been spooked by the media reports.

"We sold the first iPhone 4 in Beijing's Zhongguancun for 20,000 yuan on June 25, and a private individual bought it," said Liu Hailing, one of the biggest Apple vendors at Zhongguancun.

However, sales have dropped significantly since "antenna gate" - a blitz of negative publicity about the iPhone 4's reception - broke out.

"Countless customers have inquired about the phone, but the device's signal problem is always the very first question they ask. After that the price drops dramatically," Liu said. Even with the US version priced at 6,000 yuan, "very few people buy it - even after we assure them that the signal is no longer a problem."

Liu said most buyers want an iPhone 4 before official sales take off as this group is looking to show off the device or give it as a pricey gift.

Weary of a negative reaction from peers, many steer clear.

Prices for the device have also been a deterrent.

"High gray market prices are another reason keeping customers away, but compared with earlier versions of iPhones, sales of the iPhone 4 are sluggish at best.

This has made vendors leery of maintaining large inventories, as they may never sell.

When the iPhone 4 was launched in late June, Chinese customers felt snubbed at not being able to buy them at the same time as the rest of the world.

But now vendors said consumers are happy that the device's bugs are being dealt with overseas and they can wait for a better version.

Although Steve Jobs announced that only 0.55 percent of customers have complained to Apple about the signal issue, Chinese iPhone fans appear to be far from believing the problem is resolved.

"Why would I need a phone that has already been found to have a design fault? I will stick with my old first generation iPhone until the company solves the problem completely," said Xiao Bing, a customer who put off buying an iPhone 4 last month.

Previously, it wasn't a problem for Apple that Chinese customers bought more iPhones in the gray market than they did in official Apple stores, "Apple sold phones anyway, no matter where they bought them," said Liu.

But now the Chinese are not sure about the iPhone 4 in general, no matter where it is being sold, official or unofficial, said Liu, who sold only 15 iPhone 4s in the last month.

On WeiPhone BBS, a popular Apple product website in China, the signal issue is the hottest topic for iPhone fans.

On July 20, Apple posted record-breaking revenue of $15.7 billion in its fiscal third quarter ending Jun 27 and a net quarterly profit of $3.25 billion. International sales accounted for 52 percent of the quarter's revenue. Mac sales in China increased 144 percent.

Questions:

1. How much does an iPhone 4 cost in China’s gray market?

2. When will the phone officially launch in China?

3. What is the biggest issue for iPhone fans?

Answers:

1. The price has dropped from 20,000 yuan to 6,000 yuan within the last month, as antenna-related problems surfaced in the media.

2. Apple is set to launch the iPhone 4 in Hong Kong at the end of this month. Apple and its Chinese partner, China Unicom, may launch the iPhone 4 in the mainland by the end of this year.

3. On WeiPhone BBS, an Apple product website in China, the antenna-related signal issue is the hottest topic.

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（中國日報網英語點津 Helen 編輯）

About the broadcaster:

Locals spooked by iPhone 4

Nelly Min is an editor at China Daily with more than 10 years of experience as a newspaper editor and photographer. She has worked at major newspapers in the U.S., including the Los Angeles Times and the Detroit Free Press. She is fluent in Korean and has a 2-year-old son.