Popularity of iPhone 4S and other brands in China market
"The (iPhone 4S) model is a little bit too long in the tooth when compared to other phones with better specs," said TZ Wong, a Beijing-based analyst from research firm IDC.
"To put it plainly, consumers are getting a little bit tired of the look of the iPhone 4 and the iPhone 4S." Apple's sales from greater China, which includes Taiwan and Hong Kong, totalled $5.7 billion for its third quarter ended June, an unexpectedly steep drop of $2.2 billion from the January-March period.
Apple's quarterly results pressured shares of its Asian suppliers on Wednesday, with Taiwan's Hon Hai and South Korea's LG Display ending more than 4 percent lower, while Japan's Toshiba fell more than 7 percent.
Tim Cook, Apple's chief executive, told analysts that about half of the quarter-to-quarter decline stemmed from "changes in the inventory channel" rather than weak sales of its iPhone 4S, which analysts took to mean that Apple had built up excess inventory in the first three months of the year.
That extra inventory meant resellers did not need to buy as many iPhones in the April-June period. The iPhone 5 is expected to be released later this year, with enhanced Chinese language capabilities, so that likely contributed to resellers' slower orders of the 4S as well.
Cook also pointed out that iPhone 4S sales were very strong in China over the first three months of this year, so there was probably some drop-off in demand after that period.
SIRI LEARNS MANDARIN Consumers in China, which has the world's largest number of mobile subscribers, were spoilt for choice with a slew of new phones available over the past few months from brands such as Samsung Electronics Co Ltd and HTC Corp.
Samsung, which flagged a record quarterly profit of $5.9 billion earlier this month, saw stronger-than-expected demand for its latest Galaxy S III model, while HTC's One X also gained popularity among phone users globally, including the greater China region.
"The S III and One X are outselling the iPhone now because people like their wider screens, better cameras and the apps are pretty good," said a salesperson at an electronics store in Hong Kong that carries phones from Apple, Samsung, HTC and Nokia Ojy .
New smartphones made by China's Huawei Technologies Co Ltd , ZTE Corp and Xiaomi were also hot sells, in part because the price was right. They are heavily subsidised by China's three telecom carriers.