The release of Apple Inc.?s iPad Mini on Friday at its flagship store in Beijing was missing the massive and unruly crowds reminiscent of some the company?s previous product launches in China, but scalpers were still out in force despite rules making it tougher for them to buy most of the stock.
Apple is requiring Chinese customers to participate in an online lottery one day in advance to buy the wifi-version of the iPad Mini at its seven retail stores in China. Those selected, however, are limited to two iPad Minis each and must bring photo identification.
The Cupertino, Calif. company instituted the iReserve system in China after a near-riot occurred during the release of the iPhone 4S in January, leading police to seal off part of the flagship store in Beijing?s high-end Sanlitun Village mall. The state-run Xinhua news agency later blamed the chaos on a clashes between rival groups of scalpers vying to buy up as much of the stores limited supplies of the device as possible.
On Friday morning, Apple?s Sanlitun store opened to no crowds, but a large group of scalpers was standing a hop and skip from the store entrance collecting iPad Minis from Chinese customers in exchange for cash. Behind them, on a nearby bench, sat tall stacks of the devices.
In a sign of how unruly such launches can still be, one group of scalpers surrounded a Wall Street Journal reporter who was trying to film the scene, angry at what they said was an invasion of their privacy. After the reporter pointed out that they were conducting business in a public place, they proceeded to kick, swat and push him as Apple and mall security stood by.
Asked why he didn?t intervene, one Apple employee replied that he couldn?t protect people outside the confines of the store. ?I suggest you don?t film here, or film from farther away,? he said.
Apple declined to comment. The Sanlitun Village mall did not immediately respond to request for comment.
Li Yongqiang, 18, said he wasn?t picked in the lottery to purchase the iPad Mini but still arrived at 8:30 a.m. to observe the atmosphere. Mr. Li said scalpers met with a crowd of about a hundred outside the Apple store to discuss the process of purchasing the iPad Mini. The crowd appeared to be predominantly made up of customers there to purchase the product on behalf of scalpers, he added. It?s not clear how the scalpers were able to get so many of their people selected for the lottery.
Despite all that effort, however, analysts are divided as to whether the iPad Mini will be a winner in China. Mark Newman, a senior analyst at Sanford Bernstein, said global reception of the iPad Mini has been modest and Chinese consumers might be lukewarm to the new device due to the availability of similar but cheaper products from competitors. The lowest-priced model of the iPad Mini retails for 2,498 yuan ($401) in China.
?Most Chinese consumers have a modest disposable income, and a lot of them are going for cheaper offerings,? Mr. Newman said. ?We believe the mass market is more interested in specs rather than brand?similar to what we?ve seen for smartphones in China.?
But David Wolf, chief executive of marketing consulting firm Wolf Group Asia, said the device would make it appealing to consumers in China who either can?t afford the full-sized iPad or want something more portable. ?This will do better than some of the naysayers suggest,? he said. ?Apple is going to make the iPad technology available to a market that either couldn?t afford it or couldn?t fit it into their lives.?
One of a handful of non-scalpers to get his hands on the iPad Mini in Sanlitun on Friday, Zhang Aobo said he was a fan of the device?s reduced size. ?I think it?s really good,? he said. ?It?s very small and light, and easier to use than the iPad.?
Another Apple customer seen trying out a display model of the new iPad Mini in Sanlitun said it was too early to say whether he would buy it. ?I?m more interest in the fourth-generation iPad because it has better specs,? Gao Yang said, adding that he wasn?t thrilled with the screen resolution of the iPad Mini, which lacks the ultra high-resolution Retina display available on the full-sized iPad.
Apple is by far the dominant seller of tablet PCs in China, boasting a 71.4% share of the market in the third quarter of this year, according to technology research firm Analysys International. Rival Samsung Electronics Co. ? whose Galaxy Note is aimed at the same market segment as the iPad Mini ? was a distant second with just 3.5% market share, the firm said.
That dominance may simply reflect its status as a first mover, Mr. Newman said. Globally, Apple?s market share for tablet PCs is expected to fall from 86% in 2010 to 58% in 2012, according to Sanford Bernstein?s research. Apple?s global market share for tablet PCs could fall to as low as 46% by 2015, the research shows.
Mr. Wolf agreed that Apple was bound to lose ground to competitors. ?We are going to be seeing a bigger selection of tablets in the Chinese market, and when that happens, I?m comfortable that Apple won?t be seeing 70% market share on an ongoing basis,? he said, adding that a declining slice of the pie might not put much of a dent in Apple?s profits with the pie itself set to grow going forward.
? Wayne Ma, with contributions from Josh Chin
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