Apple trumpets 2M iPhone 5 sales in China

Apple trumpets 2M iPhone 5 sales in China

Desperate measure or strictly success in an important market?

Apple today said it has sold 2 million iPhone 5 smartphones in China since Friday, setting an opening weekend sales record for the country.

The announcement was Apple's first to trumpet sales in the People's Republic of China (PRC), as well as the first to tout numbers for any individual market other than the U.S.

"Customer response to iPhone 5 in China has been incredible, setting a new record with the best first weekend sales ever in China," said Apple CEO Tim Cook in a statement.

The iPhone 5 went on sale in mainland China on Dec. 14, the same day it debuted in 33 other countries. Apple is on track to reach its goal of 100 countries by the end of the year.

U.S. sales of the newest iPhone started Sept. 21.

Some analysts saw ulterior motives in Apple's publication of the sales figures.

"This does concern how they're being viewed by the market," said Ezra Gottheil of Technology Business Research. "They've been hit by the stock analysts about flattening sales in China, which had been growing at an insane rate. But that has a lot more to do with the China market than Apple's."

Apple sales in Greater China -- a region the company defines as the PRC, Hong Kong and Taiwan -- have stalled as economic growth there has slowed. In the last five weeks, for example, two research firms, Canalys and IDC, said that Apple fell off the Chinese smartphone market's top-five list during the third quarter.

An IDC analyst was blunter than Gottheil.

"Why are they saying this now, when they didn't say this for the iPhone 4S or iPhone 4? Maybe they want to keep the brand alive," IDC analyst Teck Zhung Wong told the IDG News Service today. Wong also echoed Gottheil's comments on Apple's shrinking share of the Chinese smartphone market and speculation that today's announcement was a defensive move.

Others, however, took Apple's sales report at face value.

"It's a big number," said Brian White, of Topeka Capital Markets, a Wall Street analyst who remains bullish on Apple. "It's pretty amazing. Just think about the iPhone 4 in 2010. Then, Apple sold 1.7 million units in the first weekend. Fast forward to 2012, and the Chinese market has exceeded what Apple was able to do in 2010 [in the U.S., France, Germany, Japan and the U.K.]."

White didn't view the sales release as Apple's way of injecting some good news into a string of reports of financial analysts cutting their price targets.

Since Apple's 2012 record closing price of $702 on Sept. 19, the Cupertino, Calif. company's shares have slumped by 27%. As of 4 p.m. ET Monday, Apple's shares stood at nearly $519, up 1.8% for the day.

As for today's announcement being the first ever for China, White also had an explanation for that.

"They've never had the [sales] volume to justify putting out a press release for China," said White. "My general rule is that it has to be over a million. There are not that many countries that can sell that many in three days. The U.S. can. And China."

White also noted that the timing was aimed at China, not investors in the U.S. Apple issued the press release at 8 p.m. ET Sunday, or 9:00 a.m. Monday in Beijing. "They wanted to create some buzz in China," White said.

Carolina Milanesi of Gartner took White's side in the debate. "I don't think this is a desperate-measure marketing attempt," she said in an email reply to questions.

Instead, Milanesi saw other factors at play.

"It seems that the deal with China Mobile is close, so this would show the potential that would have on Apple," Milanesi said. While Apple has China Unicom and China Telecom as its two PRC carrier partners, it has not yet signed up China Mobile, the world's largest mobile carrier. China Mobile has an estimated 700 million wireless subscribers.

"It also shows the potential of growth outside of mature markets," Milanesi added of Apple's chances of replicating its China model in other developing countries. "They had stated that China is their testing ground to some extent."

Greater China generated $23.8 billion, or 17% of all Apple sales for the company's 2012 fiscal year, which ended Sept. 29 2012.

Michael Kan of the IDG News Service contributed to this report.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is

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