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How Apple's iPhone 6 Is Doing In China, Japan and Korea

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Apple seems to be on a roll with the iPhone 6 and 6 Plus. The company launched it in the US, Japan and eight other countries on September 19 with China on October 17 and South Korea on October 31. As of the end of October Apple had launched the iPhone in 69 countries and was on-track to reach 115 by the end of the year, its fastest rollout ever. (Note that I own Apple shares).

Initial China pre-orders could generate $3 billion in revenue

There were multiple reports of huge pre-orders in China during October. The first ones came from the JD.com website that was tracking reservations in early October before Apple was officially taking orders on October 10. At one point in time JD.com showed demand for over 8 million iPhone 6 and 6 Pluses but there were multiple duplications as people tried to get better ship dates.

From a Bloomberg article it reported that there could have been upwards of 20 million pre-orders but that only 10% to 15% would result in actual sales. However this is actually a very strong number when you realize that at 2.5 million devices (12.5% of the 20 million) an iPhone 6 with 16GB of memory costs 5,288 yuan or $864 and the 64GB version is 6,088 yuan or $995 ($131 for the additional memory vs. $100 in the US). An iPhone 6 Plus with 16GB is also $995 and the 64GB version at 6,888 yuan is $1,125.

If you use $995 for the average selling price in China (iPhone 6 with 64GB of memory or a 6 Plus with 16GB of memory) the 2.5 million initial orders will generate about $3 billion in revenue. This is more than half of all of Apple’s September quarter’s $5.8 billion revenue in China and over one-third of last years December quarter’s revenue of $8.8 billion.

There is also a Reuter’s report via CNET that Apple edged out Samsung (568.5 to 566.6 points so quite close) as the top rated brand in China after polling 13,500 Chinese across 30 cities aged 15 to 60. This came from the China Brand Research Center's 2014 China Brand Power Index and follows another survey earlier this year I found that cites a China Mobile executive, Ge Changwei, that Apple is by far the loyalty leader among smartphone vendors at 75.4% with Xiaomi a distant second at 28% and Samsung in third at 27.9%.

The substantial increase in 4G coverage, especially by China Mobile, could drive large volumes of Apple’s iPhones in the December quarter and 2015. China Mobile going from zero 4G users to almost 41 million in September shows the potential for Apple and others over the next few years. Apple's iPhone is also starting to gain market share per data from Counterpoint Research, Kantar And Strategy Analytics.

Apple’s iPhone is dominating Japan’s smartphone sales

I have been following Apple’s iPhone standings in Japan via the BCN website that tracks smartphone sales along with a number of other consumer devices. For the month of October the iPhone 6 held 7 of the top 8 smartphone positions and 9 of the top 14. This was after it had 7 of the top 9 positions in September. While there aren’t any sales figures to go along with this data it does indicate the strength of the iPhone in Japan. I have also developed a Google Doc going back to December 2013 with iPhone standing information.

Apple has upside in Korea

While Korea is a smaller market (over 50 million wireless customers) than China (over 500 million 3G and 4G users) and Japan (about 140 million) it is still helpful to get a feeling on how Apple is doing since it has a low market share, estimated at 6% per Counterpoint Research vs. Samsung’s at 60% and LG at 27% in the September quarter.

From a Wall Street Journal article it was estimated that there were over 100,000 orders in about the first day for the iPhone 6 and 6 Plus and that it outpaced the rate for Samsung’s Galaxy Note 4. While Apple probably won’t catch the two market share leaders if the company can maintain its momentum this is an incremental positive to its results. Lee Seung-woo, an analyst with IBK Securities in Seoul, believes that the iPhone 6 and 6 Plus could outsell Samsung’s Galaxy S5 and Note 4 by five to one in the December quarter.