Hong Kong’s mobile operators seek better days with iPhone X release

Carriers see potential from early pre-registration of subscribers who want to purchase Apple’s 10th anniversary iPhone

PUBLISHED : Wednesday, 04 October, 2017, 8:02am
UPDATED : Wednesday, 04 October, 2017, 11:02pm

All four incumbent mobile network operators in Hong Kong are looking to gauge demand for the upcoming iPhone X, weeks ahead of Apple’s scheduled date for accepting orders, amid concerns over the muted interest for the iPhone 8 and 8 Plus models.

Hutchison Telecommunications Hong Kong, SmarTone Telecommunications, China Mobile Hong Kong and HKT, the city’s largest mobile services provider, have each actively reached out to their respective subscribers through separate iPhone X pre-registration programmes.

While pre-registering customers has long been common practice in the industry, the process has taken on urgency because of the amount of inventory that these carriers must move after several quarters of slow smartphone sales, according to people familiar with the matter.

Hong Kong mobile operators declare price war in bid for new customers as Apple launches iPhone X

Apple has scheduled pre-orders for the iPhone X to start on October 27 in about 57 countries and territories, including mainland China, Hong Kong and Taiwan. It will be in stores from November 3.

With a starting price of US$999, the iPhone X represents Apple’s most expensive smartphone to date. It will be available in silver and grey, with 64-gigabyte and 256GB storage capacity versions.

Apple launched last month its 10th anniversary iPhone, which has a 5.8-inch full-screen design using organic light-emitting diode displays produced by rival Samsung Electronics.

The upcoming model’s arsenal of features include seamless support for facial recognition, wireless charging and augmented reality technology, as well as a powerful new processor, updated mobile operating system and camera upgrades.

Why the iPhone X feels like an evolution of the iPhone, but not of the smartphone

Pre-registrations for the iPhone X in Hong Kong appear to be promising, despite the model’s hefty price tag, a source said.

SmarTone, for example, had initially targeted its high-spending mobile subscribers who are designated as “PriorityPlus Premium” members.

While an estimated 30 per cent of smartphone users in Hong Kong own iPhones, demand for the new iPhone 8 and 8 Plus models that were released on September 22 have apparently been modest, another source said.

iPhone X, iPhone 8/8 Plus compared: specs, prices and launch dates

That seemed to dash the hopes of carriers for a new “hero phone” that would help lift their sagging hardware sales.

“A unifying theme of the iPhone 8 reviews has been that the changes from the 7 to the 8 are incremental. We believe consumers are waiting for the feature-rich X,” said Nomura analyst Jeffrey Kvaal in a recent report.

In August, HKT blamed the lack of a popular smartphone model for recording a 42 per cent year on year decline in handset sales during the first half of this year.

Hutchison Telecom reported a 22 per cent decrease in mobile hardware sales to HK$1.2 billion in the same period.

SmarTone, which was beset by a steady shift of customers to subscriber identity module-only plans from handset-bundled packages, posted a 72 per cent fall in handset and accessory sales to HK$3.5 billion in the six months ended June 30.

Hutchison Telecom chief executive Cliff Woo Chiu-man, however, sees Apple’s decision to spread the release of new models would eventually work out for Hong Kong’s mobile network operators and their subscribers.

“Not everyone will be able to afford or be eager to buy the iPhone X, so the 8 and 8 Plus will serve as alternative handsets for the market to consider,” Woo told the South China Morning Post last month.

Why reselling iPhone X in mainland China won’t guarantee huge profits for Hong Kong traders

The city’s incumbent mobile network operators last recorded significantly high smartphone sales after Apple introduced the large-screen iPhone 6 and 6 Plus in September 2014. The overhauled design made those models more competitive against the popular Android smartphones at that time.

That proved a boon to the industry. HKT, the telecommunications arm of PCCW, saw its total smartphone sales in 2015 soar 148 per cent year on year to HK$5.1 billion.

The good news for Apple is Chinese consumers are still willing to spend on iPhones with a difference

Of the total 1.2 billion iPhones sold by Apple as of July this year, about 730 million were still in use around the world, according to research firm Newzoo. It said more than 80 per cent of the iPhones in use are accounted for by the 6 and subsequent models, which means these models are no older than three years.