Business News

Latest Apple iPad Struggles in China; Sellers Cut Price

Kathrin Hille in Beijing

Demand for Apple’s new iPad in China is slower than for the tech company’s first two tablets, with the gadget’s price already falling within the first week of it reaching the market.

The new iPad is displayed during an Apple product launch event at Yerba Buena Center for the Arts on March 7, 2012 in San Francisco, Ca.
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Unauthorised resellers in Beijing and Shanghai said they had to cut prices by close to 30 per cent over the past week because of sluggish demand. “The market is basically saturated,” said a sales clerk at Buynow, an electronics mall in Beijing.

Apple launched the device in 10 countries on March 16, but has not yet announced an official launch date for China. However, as usual, the new iPad found its way into Chinese shops less than a day after going on sale in the US, smuggled in from Hong Kong and America.

When the new iPad went on sale in Beijing on March 17, the most expensive model carried a 5,200 yuan ($825) price tag. But the price dropped to 4,500 yuan on the first day. Within three days, the price plunged to 3,700 yuan, sales staff at Buynow said.

When the iPad 2 first came out in the grey market, it sold for as much as Rmb8,000, and it took about two weeks for prices to come down to Rmb3,000, according to resellers.

“People are getting a lot more rational about the iPad now,” said Xue Jinpeng, a reseller in Zhongguancun, Beijing’s technology district. “They are a lot more willing to wait until prices come down or even until the official launch.”

Annie Zeng, a secretary at a foreign insurance company in Shanghai and a confessed Apple fan, said she felt the latest iPad offered nothing new for the higher price.

Consumers’ lack of enthusiasm is in stark contrast to the reception given to earlier Apple products. In January, the company suspended sales of all iPhones through its own stores in China after the launch of its latest model led to a riot among black marketeers at its Beijing flagship store.

The weak sentiment is also at odds with the sky-high expectations for the new tablet’s performance. IDC, the research company, last week raised its forecast for global tablet shipments this year by 21 percent to 106.1 million units because of strong demand.

Last year, tablet shipments in China ballooned fivefold to 5.83 million, with the iPad grabbing a 70 per cent market share, according to IDC.

The researcher this week forecast total shipments to rise to 7.23m units this year, but also said that new products were being launched too fast for some consumers to digest. Apple’s Chinese rival Lenovo has recently announced a series of new mobile products.

Over the past two years, Apple has seen rapid growth in China. When the company reported annual results in January, Tim Cook, chief executive, raved to investors about the country, calling demand “staggering” and “off the charts”.

Additional reporting by Zhao Tianqi in Beijing and Zhou Ping in Hong Kong