Only two people wait for iPhone 5 launch at Beijing Apple store

IDG News Service - As Apple launched its iPhone 5 in China on Friday, interest at one of the company's stores in Beijing was muted, with only two people waiting in line minutes before the store opened its doors at 8 a.m.

"I thought there would be more people," said 21-year-old Tian Jishen, who was the second person in line on what was a snowy day in the city.

It was a major contrast from 11 months ago when Apple launched its iPhone 4S in China, and a massive crowd of hundreds had gathered outside the same store located in Beijing's Sanlitun district. The customers were later told the store was canceling its first-day sales, prompting one person to throw eggs at the building, which resulted in Apple suspending all iPhone 4S sales at its physical stores in China.

Since then, Apple has instituted an online reservation system at its company stores in China, which appears to have reduced the lines, and prevented further incidents. At the Apple store in Beijing's Sanlitun district, only about ten customers trickled into the store during first half hour after it opened.

Despite the initial low turnout, making an iPhone 5 reservation on Apple's site is not easy, according to Tian, who successfully registered for an order only a day earlier.

"I thought I had no opportunity," he said, after trying to register numerous times. "I've had friends try making a reservation, but they failed."

Analysts are divided on whether the iPhone 5 will sell well in China.

Low-end handsets are currently driving the growth in China's smartphone market, and many high-end users are switching to Samsung handsets, said Gartner analyst Sandy Shen in an interview last month. Apple's iPhone 5 starts at 5,288 yuan ($841) when bought without a contract.

"I think the high-end market is already saturated with Apple's product. People that should have an Apple product, already have one," she said. "If you ask them to upgrade to the iPhone 5, I don't think they will have a strong enough drive to do it because of the lack of innovation in the new iPhone."

In the third quarter of this year, Apple fell out of the top five among China's largest smartphone vendors, according to different research firms. But some say this suggests "pent up demand," as customers waited for the iPhone 5 to arrive. On Monday, mobile carrier China Unicom said iPhone 5 online reservations reached over 300,000 within the first week of taking requests.

Canalys analyst, Jingwen Wang, said early adopters in China will already have bought the iPhone 5 from the country's gray market vendors. These unofficial vendors have been selling the iPhone 5 for the past two months, buying the product overseas from the U.S. and Hong Kong where it is already selling.

Outside of major cities including Beijing and Shanghai, where Apple has no company stores, consumers will likely resort to buying the iPhone 5 online, or through one of China's major electronic retailers, she said.

23-year-old Hong Tiantan, however, wanted to buy his iPhone 5 from the Apple store in Beijing's Sanlitun district and was able to make a reservation only the day before. He was the first one in line, and said he arrived early because his reservation gave him an hour window between 8 a.m. and 9 a.m. to buy the product.

"I highly regard Apple and its apps," he said. Hong also owns an iPhone 4S, but said he needed to replace it after its glass covering cracked when he dropped it on the street.