Apple: We misjudged Chinese demand for iPhone 4S

CEO Tim Cook acknowledges that "we didn't bet high enough" in launching the new phone in China. Apple probably didn't expect the barrage of eggs, either.

Apple's Sanlitun store in Beijing.
Apple's Sanlitun store in Beijing. Apple

Apple saw its global iPhone sales skyrocket to more than 37 million last quarter. Just imagine what the number might have been if the iPhone 4S had been available in China at that time.

During Apple's earnings call yesterday, CEO Tim Cook said that he's been happy with sales of the iPhone 4S in Greater China. But since the phone didn't launch until January, the results weren't counted for the December quarter, a move the Apple chief seemed to regret.

"We felt we were betting bold, as I think many of you would have thought if you would have known what we were doing," Cook said (about 19 minutes into the audio of the conference call). "But as it turns out, we didn't bet high enough."

Then again, Apple is facing a tricky sales situation in China.

After stocking its five Chinese stores with the new phone in early January, the company was soon forced to suspend physical retail sales of the iPhone 4S following an egg-throwing incident. Citing concerns for the safety of the huge throngs of customers waiting in line all night, the flagship store in Beijing refused to open in the morning, which then angered a small group of people who responded by pelting the store with eggs .

Since then, Apple has been selling the new phone in China through reseller stores, carrier China Unicom, and its own online store. Cook nonetheless was pleased with sales in the country.

"I would say the demand there has been staggering," he said. "We are selling through our reseller stores and our online store. We're not currently selling through a retail store. And the demand is off the charts. And so we're very happy with the demand response there."

Apple currently is working with China Unicom as the single iPhone carrier in China. Rumors recently surfaced that China Telecom may be next in line to carry Apple's flagship phone. Cook didn't comment on such reports but said the company is eyeing ways to expand in the Chinese market.

"And in terms of China, China Unicom continues to be a very key partner," he said. "I've got nothing to announce today on an expansion there. But as I consistently said, China is an extremely important market for us, and we continue to look at how to grow it further."

Apple sold 5.6 million iPhones in China during the first nine months of last year, according to Bloomberg, citing data from Gartner. The company also was the fourth largest smartphone vendor in the country during the third quarter.

About the author

Journalist, software trainer, and Web developer Lance Whitney writes columns and reviews for CNET, Computer Shopper, Microsoft TechNet, and other technology sites. His first book, "Windows 8 Five Minutes at a Time," was published by Wiley & Sons in November 2012.

 

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