Apple's Lunar New Year Snub of China Could Benefit Samsung
Apple is poised to miss out on one of the most lucrative shopping seasons in one of its largest markets. The Chinese New Year week of celebrations kicks off this Monday, Jan. 23, but Apple ceased sales of the iPhone 4S in all five of its China retail stores Jan. 13, Bloomberg reports. Which could prove enormously beneficial for the high-riding Samsung.
China's online store is also sold out of iPhone 4S handsets, but the disappearance of the device seems instead linked to events of Jan. 13, when a crowd of shoppers - who had waited at a Beijing store overnight in sub-freezing temperatures for the device but were told in the morning that the store would not open and that they should disperse - turned rowdy. Eggs were thrown at the store, after by some accounts a man showed up with a bag of them and passed them around.
Another significant contributor to the mayhem were the hundreds of people - some students, some unemployed - who were paid by scalpers to stand in line and procure iPhone 4S handsets, which would then be sold on the gray market. After hours of waiting, they gradually clashes with similarly paid "placeholders" hired by rival scalpers, as well as traditional Apple fans wanting devices for themselves.
At another Beijing location, as at a Shanghai store, the doors opened on time, all went according to plan, and all the smartphones were sold.
China is Apple's second-largest market, and with its fast-rising middleclass, a focus for much of the mobile industry as well.
During a conference call with analysts and journalists Jan. 19, to talk about fourth-quarter financial numbers, Intel President and CEO Paul Otellini said emerging markets are a key part of his company's mobile device strategy, noting that there are 950 million smartphone subscribers in China, with that number expected to grow rapidly.
Nokia, too, has repeatedly pointed out the potential in China, which, with India, was a big focus during the launch of its first Windows Phone handsets.
Apple has said it plans to open 25 retail locations in China over the next few years, and executives have said that Apple China stores are among its highest in traffic and revenue. Apple CEO Tim Cook has called it "an area of enormous opportunity" and unlike anything he's seen in his lifetime.
Citing Chinese government statistics, Bloomberg reports that the 2011 Chinese New Year generated $64 billion in retail sales, and that Apple's absence could be a big win for Samsung, the smartphone maker that has had the most success backing the Android platform.
While Android backers such as Motorola, HTC and most recently Sony Ericsson have pointed to intense competition as a reason for recent financial setbacks, Strategy Analytics analyst Neil Mawston says what's really in their way are Apple and Samsung.
"It it was mostly tougher competition from Apple and Samsung that crushed Sony Ericsson's worldwide growth and profits during the quarter," Mawston told eWeek. "The Apple iPhone 4S and Samsung Galaxy S2 models are proving wildly popular at the moment, and most other models from most other brands, including Sony Ericsson, are struggling to gain traction. Sony Ericsson is broadly in the same boat as HTC, Motorola, Nokia and RIM, in that they don't currently have a killer model or sub-brand that is truly wowing higher-end consumers and operators."
Another thought: Perhaps, on a holidays built around good luck, with a central tenet of never saying the number four - considered very back luck, since in a number of Asian languages "four" is a homonym for "death" - devices like the Galaxy S2, even in Apple-obsessed China, might seem a more auspicious gift than an Apple iPhone 4S.