Apple announced an additional 20 countries would have the iPhone 6 and 6 Plus on Friday, September 26, a week after the first 10 countries. Of the 20 that were added 15 of them were the same as the iPhone 5’s second wave, which was a week after first launch, vs. the iPhone 5c and 5s whose second wave didn’t happen until over a month after first launch (but had included China in the first wave). While China did not make the second wave list for the iPhone 6 and 6 Plus the more notable countries included Austria, Finland, Italy, Russia and Spain. The company plans to be in 115 countries by the end of the year which one would assume should include China but depending on government approval that is not a given.
Recent iPhone launch history in China
When Apple announced the iPhone 5 two years ago it was available in Hong Kong in the first wave on September 21 and became available in China in December. The 5 was only available in Apple’s Hong Kong stores by a reservation system for at least a month. The reservation system was put in place after near riots with eggs being thrown when crowds nearly overwhelmed the Apple stores when the 4S became available.
For the iPhone 5c and 5s China, along with Hong Kong, was included in the first wave on the
Apple doesn’t need China in the short-term
Last year Apple sold over 9 million 5c and 5s iPhones in the first weekend, almost 34 million in the September quarter and over 51 million in the December quarter. The 5c and 5s did have the benefit of having China Telecom and China Unicom offering them so it isn’t a direct comparison to this years launch.
Two years ago the iPhone 5 sold over 5 million in the first weekend (with over 2 million pre-orders), almost 27 million in the September quarter and almost 48 million in the December quarter.
Apple receiving over 4 million iPhone 6 pre-orders the first 24 hours is one indication that there is more than enough demand for the larger screen iPhones in the near-term without China. Also the iPhone 6 Plus’ lead-times are 3-4 weeks on Apple’s US website which indicates a combination of strong demand and constrained supply. Having China’s three wireless carriers being part of the pre-order window would elongate the delivery timeframes.
Since supply is the gating factor on how many iPhones will be sold in the first weekend (and probably upwards to a month or longer) I believe the company could sell 10 million 6s and 6 Pluses and upwards to 12 million in the first weekend.
However with China responsible for about 17% of Apple’s total revenue in fiscal 2014 and growing 20% year over year the company will need China to come on-line no later than early calendar 2015 to ship in time for Chinese New Year starting on February 19.
Why didn’t Apple include China in the first wave?
There are probably two main reasons that Apple didn’t include China in the iPhone 6 and 6 Plus first wave. The first is that there would be overwhelming demand from China and it would only worsen tight supply and the second is that China’s regulators didn’t approve the iPhone 6 and 6 Plus.
While in many ways it would be nice to say that Apple decided to wait on China due to anticipated strong demand it does look like was a regulatory issue. One indication was China Telecom having information on its website a few days before the iPhone 6 and 6 Plus were announced that it would be taking orders. The second is an article in the New York Times that referenced news reports in China that the Ministry of Industry and Information Technology had not approved the iPhone 6.
The reason that was written about in the Times article had to do with security and privacy concerns. Another reason that is being speculated on is China’s government trying to protect Chinese smartphone companies such as Xiaomi and Meizu and upcoming new products.
Depending on which reason it could determine how long it takes for Apple to get approval. If it is for security reasons it really is an unknown timeframe. If it is to protect other companies the “ban” may only last as long for a few major new announcements to occur (but that could take a long time).
