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Apple will release new iPhones in Hong Kong and mainland China next week to meet pent-up demand

Pre-orders for the new handset will be accepted from Friday

PUBLISHED : Thursday, 08 September, 2016, 6:37am
UPDATED : Friday, 09 September, 2016, 11:20pm

Apple will release its dust and water-resistant iPhones with advanced cameras in Hong Kong and mainland China on September 16, which could help meet the pent-up demand for a new “hero” smartphone in those two markets.

At its product launch in San Francisco on Thursday, the US technology giant also unveiled the updated iteration of its Apple Watch, which will also be available on the same date.

Watch: The iPhone 7 makes global debut

The introduction of the iPhone 7 and iPhone 7 Plus, as well as the Apple Watch Series 2, is widely expected to give a boost to smartphone and smartwatch sales around the world amid a lingering economic slowdown and the recent handset recall of Samsung Electronics, the world’s largest smartphone supplier.

Apple announced that it will extend its year-old iPhone upgrade programme to mainland China for the first time, allowing consumers there to get an unlocked iPhone or iPhone 7 Plus from the company’s online store and branded shops.

Those who sign up for that programme make monthly payments to get their device, with AppleCare protection plan, choose their telecommunications network operator and upgrade to a new iPhone every year. In the United States, monthly payments start at US$32.

Monthly pricing for the mainland was not disclosed. A spokesman said Hong Kong was not included in this programme.

“I think this is a big deal and makes a lot of sense for the rising middle class in mainland China,” Ben Bajarin, the director of consumer technology practise at Silicon Valley consulting firm Creative Strategies, told the South China Morning Post.

“Instead of spending one huge lump sum, those consumers can use their discretionary spending to pay a smaller monthly amount to get a new iPhone each year.”

Bajarin added that this marked “a positive first step” for Apple on the mainland, the world’s biggest smartphone market, as the company taps into a large number of iPhone users who have not upgraded their handsets in the past two years.

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Sales of technology giant Apple in the combined mainland, Hong Kong and Taiwan market, which is its second-largest geographic market after the United States, fell 33 per cent to US$8.85 billion in the three months to June, down from US$13.23 billion in the same period last year, as iPhone demand remained sluggish.

Apple chief executive Tim Cook said in July that challenges for Apple in the China market are reflected in consumer confidence and retail spending, as well as in the yuan’s depreciation by 7 per cent to the US dollar since August last year.

Apple will accept pre-orders for the iPhone from Friday, according to the company’s website.

The iPhone 7 and iPhone 7 Plus are the first dust and water-resistant handsets from Apple, which re-engineered the enclosure of these devices to protect against spills, splashes and dust.

Other features include faster processor, longer battery life, dual core processor, new stereo speakers, new wireless “AirPods”, support for up to 25 4G frequency bands, and 12-megapixel back camera and 7-megapixel front camera on the iPhone 7. Coming later this year, dual 12MP camera on the iPhone 7 Plus.

Prices of the new iPhone, which will initially release in 28 countries and territories, start from US$649, with storage capacity options of 32 gigabytes,128GB and 256GB.

Ian Fogg, head of mobile analysis at IHS Technology, said Apple needs its latest iPhones to be a major success because the device is the main driver of growth for the whole company.

“Direct revenues for the iPhone represented 57 per cent of total Apple revenue in the second calendar quarter,” Fogg said. “The iPhone drives acquisition for Apple’s entire ecosystem, supports up-sell of Apple Watch, Macs and iPads.”

The new Apple Watch Series 2 features water resistance up to 50 meters that is fit for swimming, built-in Global Positioning System, brighter display, powerful dual-core processor and watchOS 3 operating system. Prices start at US$369.

Bajarin predicted the updated Apple Watch would see higher demand in mainland China because of the updated fitness-relevant features, as well as from the fresh stimulus generated by the new iPhone models.

In Hong Kong, electronics chain Fortress expected local interest in the iPhone 7 to also be stimulated.

A Fortress spokesman said the company “expects to see a reasonable uplift of sales”.

“Wireless headphones have been on an upward trend for some time,” the spokesman said. “Apple’s launch of new wireless earphones will certainly add excitement to the category.”

Hutchison Telecommunications Hong Kong, the city’s second-largest wireless network operator, saw its revenue in the first six months of this year drop 52 per cent to HK$5.32 billion from HK$11.02 billion a year earlier because of a lack of popular smartphones in the market.

Chief executive Peter Wong King-fai said the availability of “star handsets in the second half of this year”, such as the new iPhone, “would to help drive our hardware revenue”.

Figo Choi, who works at a store in the Wan Chai Computer Centre, said he expects sales to go up “slightly” following the launch of the new iPhone.

Choi described sales at the store — which sells headphones, cases, and other phone accessories — as average of late, but expects more demand for wireless headphones and other products that will be compatible with the new iPhone models.

Additional reporting by Julia Hollingsworth and Sarah Zheng