Bloomberg News

Apple ‘Didn’t Bet High Enough’ on China IPhone Demand, Cook Says

January 25, 2012

Jan. 25 (Bloomberg) -- Apple Inc. underestimated the “staggering” demand for the iPhone 4S when it started sales in China this month, Chief Executive Officer Tim Cook said.

“We thought we were betting bold,” Cook said about sales of the device in China on a conference call yesterday. “We didn’t bet high enough.”

Crowds pelted Apple’s oldest store in China with eggs on Jan. 13 when the shop in Beijing’s Sanlitun district failed to open on the first day of sales for the iPhone 4S. After Beijing police sealed off the area to remove more than 500 people, Apple announced that it would suspend sales of iPhones at all stores in Beijing and Shanghai “for the time being” to ensure safety.

With sales halted at its China retail outlets, Apple is now offering the iPhone in the world’s largest mobile phone market through its online store, carrier partner China Unicom (Hong Kong) Ltd., and authorized resellers. The company’s online store in China is currently sold out of the iPhone 4S.

Chinese demand for the handset is “off the charts,” Cook said on the call.

Apple, based in Cupertino, California, this month moved closer to expanding its distribution in China through a second carrier partner when regulators approved specifications for a device that would run on the network of China Telecom Corp., the nation’s third-largest wireless carrier.

Cook declined to answer questions about when a second carrier would be added in China.

‘Key Partner’

“China Unicom continues to be a very key partner,” he said on the call. “I’ve got nothing to announce today on an expansion there, but as I’ve consistently said, China is an extremely important market for us and we continue to look at how to grow it further.”

Apple announced yesterday that quarterly profit more than doubled to $13.1 billion in the period that ended Dec. 31 on surging demand for the iPhone and iPad.

The company sold 5.6 million iPhones in China during the first nine months of last year, making it the No. 4 smartphone vendor in the country in the third quarter, according to Stamford, Connecticut-based research company Gartner Inc.

--Edmond Lococo. Editors: Shiyin Chen, Neil Western

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net


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