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China Exclusive: Apple fever cools in China

02-22-2012 16:44 BJT

BEIJING, Feb. 22 (Xinhua) -- A handful of customers wandered around inside two Apple retail stores in downtown Beijing on Tuesday when China Telecom, the country's third-largest wireless carrier, announced it would start selling the popular iPhone 4S on March 9.

The scene was in sharp contrast to the rowdy crowds that mobbed Apple's stores to get an iPhone 4S, the latest Apple smartphone series to hit the market, on Jan. 13.

Chinese consumers' zeal for iPhone 4S prompted Apple to suspend sales of the iPhone 4S at five outlets in Beijing and Shanghai, due to "supply problems and "chaotic" crowds of customers as explained by Apple.

"Customers can still try the iPhone 4S in our store, but none are for sale," said Liu Yin, a salesman at the Apple store in Xidan.

Liu said the halt hasn't had a huge impact on their overall sales, as iPods and Macbooks have continued to sell well.

The luring phone is currently available in China through resellers, Apple's online store and China Unicom -- the country's second-largest telecommunication operator, which has offered Apple Inc.'s iPhone series since 2009.

To add to Apple's pressure in China, complaints emerged over the incompatibilities between the iPhone 4S and SIM cards of China Mobile, the country's largest wireless carrier with over 600 million mobile phone users .

Many customers using China Mobile's SIM cards were refunded on returning their iPhones after they found their phones had no signal with the company's SIM inserted.

China Mobile explained that the problem was caused by Apple's new mobile operating system, which is incompatible with its own system.

"If you are CMCC's SIM card users," Apple's outlet salesman said, "we suggest you think carefully before buying the iPhone 4S".

According to Shanghai Daily, the market share of iPhone series in China had slipped for a second straight quarter from 10.4 percent to 7.5 percent in China by the end of 2011, lower than Samsung or Nokia.

Quarterly data were not convincing enough to justify Apple's abating popularity in China as they do not take seasonal factors and promotional activities into consideration, analysts said.

"Yearly figures can paint a more accurate picture," said Chen Jinqiao, director of communication policy institute with the Chinese Ministry of Information Industry.

"A three-month delay for the iPhone 4S's debut in China also contributed to Apple's quarterly slide," Chen said.

Also, what has taken some gloss off Apple's image in the country is a legal dispute over the company's copyright to use the "iPad" trademark in China.

Proview Technology (Shenzhen) has sued Apple over the use of the trademark, which it registered in several countries between 2000 and 2004, Yang Rongshan, Proview Chairman said.

According to Yang, Proview International Holdings (Taiwan) agreed to sell the "global trademark" for the iPad to U.S.-based company IP Application Development (IPAD) in 2006, adding that trademarks for the Chinese mainland market were not included in the agreement.

Apple bought the trademark from IPAD that same year and began selling the product in the Chinese mainland market. Proview Technology (Shenzhen) still holds the right to the trademark it registered in 2001, according to the official website of China's trademark watchdog.

Local courts in Shenzhen and Huizhou have ruled in favor of Proview, prompting many authorized retailers in China to remove the iPad from their shelves.

Apple has managed to secure enormous profits in the years since the introduction of its iconic iPod portable music player, but the company is being besieged in China by ambitious rivals, a shrinking market share and a patent lawsuit.

In the last quarter of 2011, Samsung took more than 24.3 percent of China's smartphone market, three times greater than Apple's share, according to the Gartner research firm.

Editor:Wang Lingfei |Source: Xinhua

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