Apple's new iPhone 5 arrives in Hong Kong on Tuesday

Apple is marching on to an even greater level of world domination with its new device - and for many, it's hard to imagine living without one

PUBLISHED : Sunday, 16 September, 2012, 12:00am
UPDATED : Sunday, 16 September, 2012, 3:59am


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When the late Apple boss Steve Jobs launched his first iPhone in 2007, he set a sales target of 10 million in its first year, just one per cent of the world mobile phone market.

Analysts surveyed by Bloomberg expect Apple to sell 58 million iPhone 5s this year - nearly 15 million per month.

While Hongkongers had to wait a full year for the first "official" version of the iPhone (black market models, of course, came sooner) the iPhone 5 will arrive here on Tuesday.

This reflects the importance of the city's smartphone market, but also the rise of parallel imports - versions of the phone brought in from abroad and sold for HK$10,000 or more, more than twice the retail price.

These days, it would be hard to imagine Hong Kong without iPhones. They are everywhere.

Hear the familiar Apple ringtone in an office or bar and you'll see half the people in the room reaching for their pockets.

But how did the smartphone - not just Apple's device but also those operating on Google's Android software and the Windows Phone platform - become a device so many of us cannot live without?

People like Erwin Huang help to explain why. Huang believes he was the first person in Hong Kong to get his hands on a first-generation iPhone. It cost him a small fortune - but it allowed him to lighten his load, with the phone taking the place of camera, notepad and music player.

"At that time, the phone was locked with [the US telecoms network] AT&T and did not even accept a Hong Kong SIM card. It ran on 2G and it was only four months later that it was jailbroken," allowing it to be used with any network, Huang said.

The roaming fee on his first monthly bill was US$1,200 - far more than the price of the device.

He uses the phone to scan people's business cards and make a recording of PowerPoint presentations he attends - a great help in his work as chief executive of internet training company WebOrganic.

And he can sync all of his information across several devices, ensuring it is always at his fingertips. But Huang's smartphone is not just about work. It even comes in handy when sharing romantic moments, helped by the music application KKbox, which allows access to Canto-pop hits for HK$48 per month.

"Last year I was with my wife at the Eiffel Tower, and we played a game of remembering love songs about Paris. KKbox has more than 10 Canto-pop songs on the strange topic."

The iPhone has also helped him combine visits to old-fashioned stores with a touch of online shopping. "While still going to PageOne or other book stores once in a while, I use the Amazon price check tool to scan the book barcode. And it's usually cheaper to get it with one-click shopping."

Apps such as Pinterest and Fancy allow him to share his life with the world, but there's one iPhone characteristic that has yet to win him over.

He said the live chat WhatsApp is just a "big annoyance", though he admitted it is "one I couldn't live without".

Fans like Huang have helped Apple become the world's most valuable company. Once a niche computer maker, Apple now generates higher profits than technology competitors Hewlett-Packard, Microsoft and Google.

But Apple hasn't had it all its own way. Samsung, which uses Google's Android mobile operating system and offers several different models, has emerged as Apple's biggest competitor in smartphones.

Samsung, also one of Apple's biggest suppliers of components, accounted for 19.1 per cent of global smartphone shipments last year, compared with Apple's 18.8 per cent, according to Bloomberg Industries data.

Between them, they have helped sideline the Blackberry to dominate the US$219 billion smartphone market

The success has often been put down to the development of third-party apps, computer programs installed on the phone that allow its features to be used in new and different ways.

The photography programme Instagram became a US$1 billion business within months on the back of its iPhone app, while apps have also helped the development of websites such as Facebook and Twitter.

It is a far cry from the phones Lau Chi-kong first sold when he set up shop in Mong Kok's Sin Tat Plaza 16 years ago.

The first generation phones were nicknamed "water bottle devices" due to their bulk and cost tens of thousands of dollars, Lau recalls. Nokia and Sony phones have won their admirers over the years, but there's been nothing like the iPhone.

That should be a good thing for stores like Lau's G World Mobile, but "even when grey market prices for iPhones shot up, we couldn't make a profit because they ran out of stock".

The rise of the smartphone has also seen competition intensify. "There were only about 30 to 40 shops in the plaza when I started. Now there are more than 100," he said. And Lau's concerns touch on a wider fear about the iPhone - that users are running out of reasons to buy it.

Back in 2007, the iPhone was "a sleek device with a large screen that combines a phone, an iPod and instant messaging" according to the South China Morning Post report of its launch.

The latest model has been criticised because it lacks a "wow factor", with a faster internet connection and slightly larger screen the main attractions.

Research firm Ovum, based in Melbourne, Australia, predicted: "The new iPhone will be Apple's most successful smartphone to date. But without a redesign of the iOS user experience and underlying software platform in the next two years, Apple will find itself in a position similar to Nokia and RIM ... with outdated smartphone platforms."

Anil Doradla, an analyst at William Blair & Co, agreed. One missing element on the iPhone 5 is the technology needed to work on the network of China Mobile, the nation's biggest wireless carrier, he said.

"Although the company did a commendable job of improving different functions, we did not come away with a wow factor," Doradla said.

But it will take more than a "wow factor" to convert the last remaining holdouts who refuse to succumb to the smartphone.

For Tsui Wai-chun, a housewife in her 60s, a five-year old mobile phone with no feature fancier than the ability to dial a number is quite enough. "I'm just not interested in it. I don't need all those functions," she said.

A price tag of more than HK$5,000 is too much - her phone has served her well despite costing a few hundred dollars.

At family gatherings, the children always have their heads buried into smartphones, fingers tapping away on the screen.

"I prefer talking to friends in person," she said.

Additional reporting by Bloomberg