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Hong Kong networks look to Apple's new phone as the hero product to revive stagnating sales

Incumbent mobile service providers last posted significantly high smartphone sales after the release of the iPhone 6 and 6 Plus models, back in September 2014

PUBLISHED : Wednesday, 06 September, 2017, 9:15am
UPDATED : Wednesday, 06 September, 2017, 10:52pm

Hong Kong telecommunications network operators will have their sights firmly set on the new iPhone launch next week, amid hopes that a blockbuster release could energise the city’s tepid smartphone market.

HKT, Hutchison Telecommunications Hong Kong and SmarTone Telecommunications have all blamed their recent streak of weak handset sales to the absence of a popular model or so-called hero phone to get consumers excited again.

“Consumers only move one way and that’s forward,” HKT group managing director Alex Arena said in a recent press briefing.

“The 10th anniversary of the iPhone is coming up. Would you throw away your iPhone and go back to using push-button feature phones? Of course, not.”

The 10th anniversary of the iPhone is coming up. Would you throw away your iPhone and go back to using push-button feature phones. Of course, not
HKT group managing director Alex Arena

Arena pointed out that “until [Apple chief executive] Tim Cook gets up there and makes the announcement, we don’t really know how many iPhones there will be ... but there are huge expectations on Apple to do something on this 10th anniversary”.

The long-awaited iPhone 8 model is expected to have an all-new hardware design, advanced organic light-emitting diode display, 3D facial recognition, front and back glass casing, a main camera that supports so-called augmented reality applications, wireless charging and a price tag of more than US$1,000, according to a recent J.P. Morgan report.

Speculation is also rife about two other models: updates to the existing iPhone 7 and 7 Plus, joining the highly anticipated announcement next week from Apple’s new headquarters in Cupertino, California.

HKT, the city’s largest telecommunications network operator, reported a 42 per cent year on year decline in handset sales last month during the first half of this year to about HK$1 billion.

Hutchison Telecom reported last month a 22 per cent year on year fall in mobile hardware sales to HK$1.2 billion in the same period.

That slump apparently hit hardest at SmarTone, which also saw a steady shift by customers to subscriber identity module-only plans from handset-bundled packages.

SmarTone posted a 72 per cent year on year fall in handset and accessory sales in the six months ended June 30 to HK$3.5 billion.

“Handset sales dropped a lot because of pent-up demand for the next iPhone version,” Nomura Research analyst Gopa Kumar said in a report.

Industry sources had estimated that about 30 per cent of smartphone users in Hong Kong own iPhones.

The city’s incumbent operators last recorded significantly high handset sales after Apple’s launch of the iPhone 6 and 6 Plus in September 2014. Those models’ overhauled design made it more competitive against Android smartphones.

That proved a boon to the city’s mobile operators. HKT, for example, saw its total handset sales in 2015 soar 148 per cent to HK$5.1 billion.

Counterpoint research director Neil Shah said on Monday the new iPhone alone will not drive global growth in smartphone sales in the fourth quarter of this year.

“Most growth around the world will still be driven by the Chinese brands’ Android smartphones,” Shah said.

Global smartphone shipments this year are forecast to reach 1.6 billion units, up from 1.5 billion last year, according to Counterpoint’s estimates.