Ap­ple awaits Thai re­cep­tion as iphone 8 ar­rives

The Myanmar Times - Weekend - - International Business -

THE much-touted Ap­ple’s iphone 8 will test the wa­ters in Thai­land on Fri­day fol­low­ing a dis­ap­point­ing re­cep­tion in China and the US.

Sales of iphone 8 have been lack­lus­tre at best in the mar­kets where it has al­ready been in re­leased. In the US, sales of iphone 8 and iphone 8 Plus ac­counted for 16% of all new phone sales, the com­pany’s weak­est per­for­mance in years.

For the first time, the world’s second largest phone maker re­leases two flag­ship mod­els al­most con­cur­rently. The iphone X, which will be on shelves on Fri­day in the US, will be its most ex­pen­sive hand­set to date with a start­ing price of $999.

Ac­cord­ing to an Ap­ple Thai­land’s an­nounce­ment yes­ter­day, the 64GB ver­sion of iphone X will re­tail for 40,500 baht. The 64GB ver­sions of the iphone 8 and 8 Plus will re­tail for 28,500 and 32,500 baht re­spec­tively.

Lower priced Chi­nese phones have been eat­ing into Ap­ple’s global smart­phone mar­ket, which dropped from 16.1% in 2015 to 14.5% last year.

In Thai­land, com­pe­ti­tion from Sam­sung and Chi­nese phone mak­ers like Huawei has in­ten­si­fied over the past year, said Jarit Sidhu, head of op­er­a­tions of mar­ket in­tel­li­gence firm IDC Thai­land. In China, re­tail­ers cut the price of the iphone 8 by about 20% in or­der to stim­u­late de­mand for the model, which has lagged prior to the launch of the iphone X. The ris­ing de­mand spurred by the dis­counts is un­likely to be main­tained into the fourth quar­ter, ac­cord­ing to Reuters.

The iphone X, which of­fers a no­tice­ably dif­fer­ent de­sign, is ex­pected to sup­port the top line growth of the Cal­i­for­nia com­pany, which is up 52% year-on-year (as of Nov 1).

Close to 40% of con­sumers who plan to buy a new de­vice in the com­ing month said they would like to try the iphone X be­fore mak­ing a de­ci­sion, ac­cord­ing to a study pub­lished by tech re­search firm Cre­ative strate­gies cited by The Wall Street Jour­nal.

The shift to­wards high-end mod­els bodes well for Ap­ple, but sales of iphone 8 are hard to pre­dict, said Mr Jarit. “It is un­prece­dented. Ap­ple has never re­leased two flag­ship mod­els at prac­ti­cally the same time.”

“We do not ex­pect the first wave of sales to be high. The first adopters are likely to go for the iphone X,” said Mr Jarit. De­mand can be ex­pected to par­tially shift to the more af­ford­able iphone 8 af­ter that, he added.

Sales for iphone 7 have been high­est af­ter the iphone 8 was an­nounced, which in­di­cates that price-con­scious con­sumers favour the pre­vi­ous model.

The Thai smart­phone mar­ket is ex­pe­ri­enc­ing a growth slow­down and is near­ing the point of sat­u­ra­tion The mar­ket is ap­proach­ing ma­tu­rity, as nearly 60% of Thais will own at least one smart­phone in the near fu­ture.

In the past, growth was largely driven by en­try level model, but this year an in­creas­ingly large part of sales will come from the mid and high-end seg­ments, said Mr Jarit.

While the shift to­wards higher priced mod­els may ben­e­fit Ap­ple, sales of the new mod­els may face sub­stan­tial com­pe­ti­tion from used iphone hand­sets.

The mar­ket is ex­pe­ri­enc­ing an im­por­tant trans­for­ma­tion as sales shift from the first to the second- and third-hand mar­kets, Mr Jarit said.

Sell­ers of pre­vi­ous iphone mod­els on the sec­ondary mar­ket can ex­pect the re­lease of the iphone 8 and iphone X to have min­i­mal or no ef­fect on the prices of those prod­ucts, said Ka­nis Saeng­chote, business lec­turer at Chu­la­longkorn Univer­sity.

“What we found in our re­cent pa­per is that iphone re­sale prices de­cline pre­dictably with age, and there is no ev­i­dence of any sharp change in price af­ter new mod­els be­come avail­able: the ob­so­les­cence seems to be priced in,” he said.

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