Tech

New iPhone gains Apple new fans in China

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Immediately after Apple unveiled its new iPhone SE this week, Beijing resident Li Sheng went online to check out the new phone as a possible replacement for his Huawei Ascend Mate 7.

Li describes himself as frugal and practical. "I never even looked at Apple's phones — the iPhone 6 or 6s," he said. "But the moment I saw the price of the iPhone SE and the phone, I wanted to buy one."

Li is exactly the kind of consumer whom Apple hopes to attract to its new iPhone lineup.

Until now, Apple has competed in China's massive smartphone market only with its high-end iPhones. The iPhone has become a status symbol, helping to make the country a top market for the U.S. tech giant. The iPhone SE is seen as a way for the company to expand in emerging nations and to target more price-sensitive consumers. In China, the lower end of the market has been dominated by less expensive Android-based smartphones sold by South Korea's Samsung and China's Xiaomi, Huawei, and Meizu.

The smaller 4 inch iPhone SE will be available in four colors in China at a price of RMB 3,288 (US $505) for a 16GB model and RMB 4,088 ($630) for a 64GB phone. Preorders can be taken on Thursday for the release date of March 31.

Chinese social media have been abuzz with the iPhone SE. Self-proclaimed Meizu smartphone owner "Xumoubudujue" writes, "I'm going to save more money to buy this one."

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Social media user MR_Call said, "The SE has the same functions as the 6S but it's even cheaper than the 5C when it first launched. It's the best for value and within the reach of ordinary Chinese."

The previous iPhone 5C version was also seen by analysts as an attempt by Apple to accommodate more budget-conscious consumers, particularly in China. However, the price between the iPhone 5C and the more technologically advanced iPhone 5S wasn't great enough for the phone to attract a big following.

For the iPhone SE, unofficial vendors in Shanghai have already started making calls to route the phones to mainland China via Hong Kong, Singapore, Japan, and the U.S. One vendor who declined to be named, told CNBC he expected stable sales and said Chinese brands would likely have "to lower their prices as well as improve their technology and user experience" to compete. He said the price for a smuggled iPhone SE would be about $50 cheaper than the official China price at RMB 2,888 ($444). The iPhone SE will be sold at $399 in many other markets.

Apple VP Greg Joswiak announces the new iPhone SE during an Apple special event at the Apple headquarters on March 21, 2016 in Cupertino, California.
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Apple VP Greg Joswiak announces the new iPhone SE during an Apple special event at the Apple headquarters on March 21, 2016 in Cupertino, California.
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Die-hard Apple fans though said they were not moved by the iPhone SE and instead are focused on the much anticipated launch of the iPhone 7 later this year.

Yet, at $505, the iPhone SE will be about $300 cheaper than the 6S in China, potentially hurting margins for the pricier models.

IPhone user Lamelaar posted, "My favorite look has come back. My 6S will be retired."