Is Apple copying China smartphones?

Here’s a switch: Some consumers in China think Apple is now copying Chinese phones, instead of the other way around.

They point to several features in the new iPhone, launched overnight (AEST), that were first introduced in Chinese phones, including a dual-camera system and handsets without headphone jacks.

“Who would have thought that Apple has fallen to copying Huawei, LeEco and Oppo,” wrote one user of Chinese social network Weibo.

As Apple aims to win back straying Chinese consumers, competitors such as Huawei Technologies and LeEco pose a challenge.

For years, the China market’s explosive growth brought Apple consistent windfalls. But for Apple’s past two quarters, the world’s biggest smartphone market has turned into Apple’s biggest earnings drag. Blame the lack of major new features on the iPhone 6S, and credit Chinese handset makers for rolling out eye-catching devices.

Apple fell to fifth place in the China smartphone market in the second quarter, according to Strategy Analytics, behind four Chinese brands: Huawei Technologies, Oppo Electronics, Vivo Electronics and Xiaomi. Apple’s China market share fell to 6.7 per cent from 9.2 per cent a year earlier.

It remains to be seen if the iPhone 7 can win them back. Apple likely will benefit from curiosity over the controversial new cordless headphones and from pent-up demand after many Chinese buyers skipped the iPhone 6S. But the iPhone 7 lacks some of the killer features that analysts say could score a China home run, such as a major design refresh or dual-SIM card slots, a popular feature in the country.

Yang Lei, a graduate student in China’s southern Guizhou province, said after the launch that he plans to buy the iPhone 7 because of the advanced camera and because he has other Apple devices. “I’ve gotten used to the iOS system,” he said.

As in the US, many Chinese consumers were quick to point out online that the cordless earphones were pricey--$US159 — for something easily lost, and that the alternate lightning-cable earphones couldn’t be used while the phone is charging.

The lightning port of the iPhone 7. Pic: AP

James Yan, an analyst from Counterpoint, said new iPhones usually sell briskly in China for at least the first few months, and the iPhone 7 likely will, too. But it is uncertain if sales will then drop off, as they did with the iPhone 6S. Apple’s sales across all products in China, Hong Kong and Taiwan fell 33 per cent to $US8.8 billion in the past quarter, versus a 112 per cent increase a year earlier.

In a country where many people’s monthly income still falls short of the iPhone’s $US649 price tag, an iPhone is a splurge. Buyers want to make sure their phone can’t be mistaken for an old one if they paid a new phone’s price.

That is one reason last year’s iPhone 6S, which looked similar to 2014’s iPhone 6, sold slowly in China, analysts say. Conversely, the gold and rose iPhones sold out in China when first introduced, partly because of the country’s love for the colour, but also partly because of the unique look.

“Chinese consumers like to have smartphones that give them face,” said Mr Yan, using a Chinese term that means to appear dignified. “They want a phone that clearly looks like the newest version.”

The iPhone 7 has some new design elements, such as a shiny black model, but it remains similar to the iPhone 6 and iPhone 6S. Apple has been holding back a larger redesign for the iPhone’s 10th anniversary next year, The Wall Street Journal has reported.

Apple CEO Tim Cook speaks on stage during the launch event. Pic: AFP

Nicole Peng, Canalys China research director, said one challenge for Apple is its high quality standards mean that it sometimes can’t adopt newer features as quickly as smaller Asian brands.

Other handset makers have beaten Apple by months or even years to features such as dual-lens cameras, waterproofing and lightning-cable charging — but suppliers confessed that the technology still had kinks.

The iPhone 7 Plus's dual cameras. Pic: AFP

Apple also has yet to adopt organic light-emitting diode or OLED screens in iPhones, although it has been researching the technology for years, while brands from Samsung Electronics to Alibaba Group Holding partner Meizu Technology Co. have already released handsets with OLED screens.

One factor in Apple’s favour is Samsung’s recent recall of the Note 7. Samsung had staked out prime real estate in Beijing to advertise the Note 7 ahead of the iPhone launch. While Samsung has said that Note 7s sold in China don’t have faulty batteries, some Chinese consumers have still been wary.

Analysts hold out higher hope for iPhone sales next year after the launch of the next generation device. Besides an expected redesign, the iPhone will benefit from the recent expansion of the Apple upgrade program to China, which could nudge buyers to trade-up for a new model at a discount.

A recent Apple patent filing for a dual-SIM card slot also presents the possibility that the feature may emerge in next year’s version. Dual-SIM phones allow a consumer to use the same handset simultaneously for two different phone numbers — for work and personal calls, for instance. Mr Yan estimates that about a quarter of Chinese smartphone users have dual-Sim devices.

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