CCTV Script 13/09/17

— This is the script of CNBC's news report for China's CCTV on September 13, Wednesday.

Featuring behind me are the iPhones that Apple has released for the past ten years, including the overnight release of three latest versions, iPhone 8, 8plus, and Apple's tenth anniversary phone, the iPhone X. Due to space constraints, we did not feature the iPhone SE. Other than that, all the models are basically here. Without a doubt, the iPhone is one of the best-selling consumer electronic products in the world. In the past decade, these products generated more than 1.2 billion in sales and every year, it raked in more than 100 million is no doubt that Apple's mobile phone is one of the world's best-selling consumer electronics products. Over the past ten years, Apple has sold 1.2 billion iPhones, with almost 100million iPhones were sold every year.

According to Counterpoint, over the past ten years, the iPhone has helped Apple raked in $ 775 billion in revenue and $ 250 billion in profits, with more than 60% of its profits coming from the iPhone. This makes Apple's latest market value to soar to a record of $ 840 billion or so. The iPhone has showed exceptional results in the past decade but its development in the next ten years does not look optimistic to many. One of its criticisms is that Apple has not been achieving technological breakthroughs in the recent years.

At the same time, we are seeing Apple's international competitors like Samsung, and prominent Chinese brands like Xiaomi and Huawei are working hard to catch up with Apple's technology.

In this regard, CNBC interviewed Tim Kobe, Apple's retail store's original designer. Kobe believed that Apple has to accomplish two things if it wants to have a breakthrough in this competition. The first is to retain its technology leadership in the industry and the second is to continue to build its brand awareness and customer loyalty.

[Tim Kobe, Founder & CEO, Eight Inc] "It's a result of very aggressive competition, you look at the technology that has been developed with say Xiao Mi, Huawei, and they are focusing very very aggressively on something that can outperform the iPhone so one of the challenges of being a leader in the industry is that you have sort of everybody gunning for you. I think the technology has started to reach parity."

Apart from these, the price points of these smartphones are also highly disputable. Since the beginning, the price of an iPhone had always been soaring. Similar to Samsung's latest, the Note 8, the iPhone X is also priced at close to a thousand dollars.

Some analysts believe that the two main reasons that high-end smart phones are priced at nearly a thousand dollars are the rising costs of innovation and manufacturers' motivation for profit. Apple has always been a luxury-phone company, but in recent years, the gap between China-made mobile phones and Apple's phones is closing down. So, if Apple wants to maintain its profitability, it must continue to increase the price of its iPhone. The key issue will be whether users are willing to pay for this. Analysts said to not worry as Apple's competitive advantage has never been on price. Meanwhile, with services like contract and iPhone trade-up, users would still chase after the Apple iPhone.

[Josh Blechman, ACSI FUNDS] "The truth of the matter is the Apple never competes on price, they have always competed on satisfaction, customer satisfaction, they strive to deliver consumer experience that is so smooth and easy to the consumer that not only do they not mind spending a thousand dollars for this phone but they will be happy to do so."

At the same time, Macquarie also believes that, in addition to the high price, Apple's new iPhone AR enhancements, including face recognition, 3D camera, etc., will substantially increase Apple's software revenue, such as its App Store, the Apple music, its cloud services, mobile payments and so on.

After the introduction of Apple watches and TV, Apple's stock once rose 1.5% overnight. But after the introduction of the iPhone, Apple's stocks fell by 1.7%. In the end, it closed down by 0.4%.

Analysts also believe that the stocks fell due to iPhone X's November shipping date, which means that the iPhone will not be sold during the fiscal Q4. In the past few years, iPhones' shipping dates were always 16 days after its launch. Reports showed that iPhone's production problems during the summer might cause a delay in its delivery. Therefore, Apple stocks declined as market worries about its supply.

Will Apple fans pay for this exorbitant iPhone and can Apple continue to compete with Samsung and its Chinese counterparts? We will continue to keep watching.

CNBC's Qian Chen reporting from Singapore

Contact Business


    Get the best of CNBC in your inbox

    Please choose a subscription

    Please enter a valid email address
    Get these newsletters delivered to your inbox, and more info about our products and service. Privacy Policy.