GUEST POST: iPhone 7 Will Not Be a Huge Hit in China

By newsdoug on September 12, 2016

Bottom line: The iPhone 7 series of smartphones will log lower sales in China at their launch than the previous iPhone 6 series, due to minimal changes and similar designs to their predecessors.

By Xiaohan Tay

Apple (Nasdaq: AAPL) announced the launch of its latest iPhone 7 and 7 Plus on 7 September and there were a few things that stood out. The new iPhone is finally IP67 certified and water resistant, has a better dual camera with a lower aperture, and longer battery life. These are upgraded features that consumers will appreciate.

Removal of the Headphone Jack

Apple is trying to move away from wires by removing the headphone jack and introducing its Airpods (wireless earphones). Consumers still have the option to use their traditional earphones through Apple’s lightning adapter. However, it is quite a turnoff for Chinese consumers since they will now no longer be able to listen to music on their iPhones while charging their phones.

While Apple’s AirPod wireless earbuds is a nice concept, the hefty price of $159 Apple plans to charge for it might be a turn-off. Also, the earbuds will only last for five hours without charging — a short time given many consumers in China take long train rides to travel to the different parts of the country. IDC expects this will not be a huge hit in China for now.

Wireless Charging Still Not Available

Given that Apple is trying to move away from wires, it was a little disappointing that neither wireless charging nor the rumored long-distance wireless charging technology was introduced in the latest iteration of its iPhone. Chinese consumers are often seen charging their phones with a portable battery charger on the buses or trains so the phone’s longer battery life is useful. But wireless charging would have been the innovative step-up consumers are looking for. Perhaps this is something consumers can look forward to in the next iteration of the iPhone.

Importance of a Differentiated Design

It is getting harder for Apple and other smartphone vendors in general to be innovative and to stand out with groundbreaking new features with every new iteration — especially with something that caters to a niche market like China. What we saw in iPhone 7 were small incremental updates, not extraordinary ones that stand out compared to the rest.

The key design difference between the new iPhone and the older generations is the introduction of the Jet Black and Black color. The new color would help early adopters of iPhone7 get noticed due to the unique colors of this iteration. But this may not be sufficient to warrant a change for most consumers.

Consumers Due for an Upgrade Will Still Purchase the Phone

Although the changes are rather minimal, the loyal Apple fans in China, especially those already used to and locked into the iOS ecosystem, will still upgrade to the latest iPhone 7 if they are due for one. But there are others who will choose to wait for the iPhone planned for release next year when Apple celebrates the 10th anniversary of the launch of its iPhone.

Conclusion

With the minimal changes and a similar design to the previous two iPhone generations, we do not expect the shipment numbers for the iPhone 7 and 7 Plus to be as high as the iPhone 6 and 6 Plus when these models were first launched in China. We expect those who are already on iPhones to make up the majority who will purchase the iPhone 7 and 7 Plus, and we do not expect Android users to be attracted to purchase the latest iPhone. A greater demand will be seen for the iPhone that will be launched in 2017 in China.

Xiaohan Tay is an analyst covering smartphones and market research firm IDC.

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