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Apple losing its shine in China

By Ma Si in Beijing (China Daily USA) Updated: 2016-09-08 11:26

Apple Inc unveiled its new water and dust-resistant iPhone 7 with high-resolution cameras at its fall product event on Wednesday, and said a Super Mario game was coming to the new phone and Pokemon Go would feature on its upgraded Apple Watch.

The excitement at the Bill Graham auditorium in San Francisco was not matched on Wall Street, where Apple's stock was down 0.3 percent. However, Nintendo's US-listed shares jumped more than 20 percent to trade around $35 on hopes its games would reach a new audience.

The world's best-known technology company said the iPhone 7 would have one, zooming 12-megapixel camera and the 'Plus' edition would feature two cameras.

It also removed the analog headphone jack, as was widely expected. The new headphones supplied by Apple with the phone will plug into the same port as the recharging cord, but it will also work with Apple's new wireless headphones, called Air Pods.

Apple losing its shine in China

The company typically gives its main product, which accounts for more than half of its revenue, a big makeover every other year and the last major redesign was the iPhone 6 in 2014. The modest updates suggest that this cycle will be three years.

Due to the limited improvements seen in successive iPhone models and a wider range of alternatives from domestic smartphone makers, Chinese consumers are less enthusiastic about the iPhone 7 and 7 Plus Apple unveiled Wednesday, experts said.

Sina Weibo, the "Chinese Twitter", shows that in the month before this year's launch, the new iPhone has given rise to one fifteenth as many comments as the iPhone 6 generated during the same period last year.

Apple losing its shine in China

This flattening enthusiasm is echoed by the latest data from China's biggest search engine Baidu. In July, there were 96.8 million iPhone-related searches - a 27 percent drop from last year's figure.

James Yan, research director at Counterpoint Technology Market Research, said that as Chinese firms make major improvements on hardware, consumers are becoming less eager to talk about Apple's new products.

"Smartphone hardware is no longer Apple's edge, because the market is now very mature and it is highly difficult to come up with innovative products that can thrill everyone," Yan said.

Local vendors such as Huawei Technologies are catching up quickly and even outdoing Apple in the hardware department, he said.

The declining popularity of iPhones highlights the challenges Apple is facing in China, which had been one of the firm's fastest-growing markets but has recently been a disappointment. In the quarter ending in June, Apple saw a 33 percent drop in sales in China.

Wang Wanli, a 26-year-old sales manager in Beijing, said he has been using iPhones for three years and is now considering whether to buy an iPhone 7 or Moto Z, the latest handset from Lenovo, a Chinese company.

"I don't expect a big improvement in the iPhone 7," he said, "but I am quite familiar with Apple's operating system. Still, Moto Z is the world's first modular handset and sounds very interesting. I want to give it a try."

Wang is not alone. Of five consumers China Daily randomly interviewed on the street on Wednesday, not one of them is ready to buy the new iPhone 7, citing the expensive price and limited improvements as major concerns.

Nicole Peng, research director at Shanghai-based consultancy Canalys, said Apple still dominates the above-3,000 yuan ($450) handset market, where most consumers remain loyal to the brand.

Agencies contributed to this story.

(China Daily USA 09/08/2016 page1)

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