Tech Industry

iPhone SE's preorder numbers good, not great, in China

Apple's cheapest phone ever has garnered 3.4 million reservations in China, but that "lukewarm" reception still puts it behind local competition.

Sarah Tew/CNET

The iPhone SE is Apple's cheapest smartphone ever, making it ostensibly the best way for the company to win over new customers in emerging markets.

In China, the world's largest smartphone market, the strategy is paying off -- but not tremendously well. The device has racked up 3.4 million preorders since it was announced last week, CNBC reports. Not a bad number, but not groundbreaking either.

The figure, based on data from major online retailers in the company, doesn't necessarily mean Apple will sell 3.4 million iPhone SEs when the phone goes on sale March 31. Retailers in China rarely allow citizens to put money down on a product ahead of its release, so "preorders" are actually more like reservations and don't require any financial commitment.

Still, it's an early measure of the interest a product has garnered in the country. For a point of reference, Xiaomi said preorders for its Mi 5, which launched earlier this month, exceeded 16 million. Apple's iPhone 6S and 6S Plus models sold around 7.2 million units in just over two weeks, according to TalkingData research.

"Initial interest for the iPhone SE is lukewarm," says Neil Shah, research director at Counterpoint Research. He expects that the phone will make up "less than 10 percent of the total iPhone sales in China this year."

The iPhone SE is essentially a 4-inch version of the 6S phone that the Cupertino, California-based company released last September -- though it lacks the latter's 3D Touch feature. The SE is also cheaper, starting at $399, £359 and AU$679.

Shah says that though the phone is cheap compared to Apple's other phones, it may not be cheap enough. "The smaller screen size [is a] deal-breaker for many, especially at a relatively premium price point," he explains. Meanwhile, Xiaomi's Mi 5, which has a 5.15-inch display and power comparable to Samsung's Galaxy S7, retails for 1,999 yuan ($305, £220 or AU$425) in China.

The SE comes as iPhone sales have hit a wall, and is likely an attempt by Apple to gain new customers in China and India, the world's two biggest smartphone markets. Budget and midrange phones, made by the likes of the aforementioned Xiaomi -- who often trades sales victories with Apple -- are extremely popular in these regions, with premium phones being too expensive for a large section of the population.

Apple did not immediately respond to request for comment.