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China greenlights sale of iPhone 6, but image problems linger (+video)

The iPhone 6 and 6 Plus will go on sale in China October 17, with pre-orders a week earlier. But early demand in China has been lukewarm. 

Apple announced that it received the greenlight to sell the iPhone 6 and 6 Plus on mainland China this week. Customers will be able to pre-order the device online starting on October 10 to be picked up starting October 17.

The news comes after a lengthy approval process headed by the Chinese Ministry of Industry and Information Technology (MIIT) that addressed security and privacy concerns. Chinese authorities were concerned that iPhones would come with installed “backdoors” that would allow third parties to peek into users’ data without their consent.

“We have never worked with any government agency from any country to create a backdoor in any of our products or services,” said Apple chief executive Tim Cook in a press release. “We have also never allowed access to our servers. And we never will.”

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MIIT granted Apple the final license required to sell the new iPhones on Tuesday. iPhones were not, however, embargoed in Hong Kong, where smugglers faced stagnant demand. The iPhone 6 and 6 Plus were selling for between $1,060 and $1,436, almost half of what it was going for just after the phone’s release.

The iPhone is also struggling to expand its market in China due to strong competition from Asian manufacturers such as Samsung, and domestic manufacturers like Huawei and Xiaomi. Apple placed seventh overall for smart phone market share in China, according to findings from analysts at International Data Corporation (IDC).

Despite this, mainland China is an invaluable market for Apple by virtue of its size. China Mobile, the world’s largest telecommunications company at 796 million subscribers as of August, is more than twice as large as the four major networks in the United States combined. Until last January, hardware differences prevented larger Chinese mobile providers from carrying the iPhone.

According to Apple’s quarterly earnings report, China accounts for 15.8 percent of Apple’s total revenue. Much of mainland China is still untapped for Apple.

Much of the difficulties in selling the iPhone comes from China's demand for domestic products and a crackdown on lavish spending. According to The Financial Times, some of the reluctance to buy iPhones is fueled by a wide rebuke of lavish spending and perceived corruption among government officials.

But this might change with the release of the iPhone 6 and 6 Plus. The larger size of the iPhone 6 Plus will bring it closer to physical parity with the growing demand for bigger smart phones in China, according to a report from IDC.

Kitty Fok, China managing director at IDC, said that the younger generation in China tends to use phones more as media devices, and are looking to buy larger screens to accommodate that.

“The way they use smartphones is different, the percentage using voice is a lot smaller and they tend to use text more, watch video, play games or even buy things,” she said in the report. “So naturally they’d like to use a bigger-screen phone.”

If Apple is looking to attract the Chinese market, it might have to address more problems than its screen size. It might have to change its outlook and image entirely. Or step-by-step, as it’s been doing the past few years.

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