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2 Million iPhones Sold in China Rollout, Apple Says

2 Million iPhones Sold in China Rollout, Apple Says
December 17, 2012 11:28AM

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"In the past, the iPhone would first launch in the U.S. and take many, many months to make its way around the world," said analyst Avi Greengart. "We are seeing a much faster pace this time around. Apple's CEO, who is well known as a supply-chain wizard, should be given a lot of the credit." Apple sold 2 million of the iPhone 5 in China over the weekend.

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iPhone 5 fever has spread to China. Apple reports it sold more than 2 million of the iPhone 5 in China over the weekend. The latest version of the iconic device officially went on sale Dec. 14.

The iPhone 5 is Apple's thinnest and lightest ever, and includes a 4-inch Retina display, an Apple-designed A6 chip, and longer battery life than earlier versions. The iPhone 5 comes with iOS 6, which offers Siri in Mandarin Chinese.

"Customer response to iPhone 5 in China has been incredible, setting a new record with the best first weekend sales ever in China," said Tim Cook, Apple's CEO. "China is a very important market for us and customers there cannot wait to get their hands on Apple products."

Apple's Emerging Market Prowess

What does the rapid success of the iPhone 5 say about Apple's market in China? We asked Avi Greengart, an analyst at Current Analysis, for his thoughts on the iPhone's success in China and other emerging markets.

First of all, he told us, given the opportunity, most Chinese consumers prefer to buy through legitimate channels. With earlier versions of the iPhone, media reports arose about black market iPhone knockoffs, but with the iPhone readily available, that is changing.

"People assume that because Apple is a premium brand it would struggle in emerging markets," Greengart said. "While it is true that an iPhone is quite an expensive proposition for consumers earning the average Chinese salary, there are a few factors to keep in mind."

Chinese Consumers Covet Status

One of the factors Greengart cited is this: Not all Chinese workers make average Chinese salaries. There is a huge market for luxury goods in China and other parts of Asia. But even consumers with average Chinese salaries may be getting in on the iPhone action.

"We've seen this type of behavior before, particularly around cell phones in emerging markets, where consumers will save up what we might consider an extraordinary amount of money relative to their overall income to buy what they feel is a quality product or a status-rich product," Greengart said.

He points to Indonesia, where Nokia's Communicator was once the most popular smartphone in the nation. It was often given as a business gift, despite its price tag of 800 to 900 euros.

Tim Cook's Savvy

The iPhone 5 will be available in more than 100 countries by the end of December, making it the fastest iPhone rollout ever. Greengart said that's a noteworthy accomplishment.

"In the past, the iPhone would first launch in the U.S. and take many, many months to make its way around the world. We are seeing a much faster pace this time around. Apple's CEO, who is well known as a supply-chain wizard, should be given a lot of the credit," he said. "Generally speaking, the bottom line is that this is great news for Apple. They are selling a lot of phones."

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