Bloomberg News

Apple Starts Sale of New IPads in China as Tablet Demand Surges

July 20, 2012

APTOPIX China iPad

Customers queue up to purchase Apple's new iPad tablet computers at an Apple Store July 20, 2012 in Shanghai, China. Photographer: Eugene Hoshiko/AP Photo

Apple Inc. (AAPL:US) began selling the latest version of its iPad tablet computer in China, seeking to build on gains in a market that contributed 20 percent of its revenue.

Apple opened its stores in Beijing and Shanghai at 8 a.m. to scores of customers who placed reservations for the new iPad. Consumers had to pre-order in order to collect the device today.

In January, police had to cordon off the Sanlitun shop in Beijing to ward off crowds who waited outside for the start of iPhone 4S sales, with some people pelting eggs at the premises. Cupertino, California-based Apple is selling the new tablet after paying $60 million to settle a two-year-old legal dispute last month regarding the iPad trademark in the country.

“If they keep making great products, I will keep buying,” said a consumer who identified himself only as Ray, an iPad buyer at the Sanlitun store in Beijing today. “The reason I don’t buy other products is because I don’t think they are as good as Apple’s.”

Apple’s iPad (AAPL:US) is locked in a battle with Samsung Electronics (005930) Co.’s Galaxy Tab and Amazon.com Inc.’s Kindle Fire in the market for tablet computers. Expectations of strong demand for media tablets in the second half of 2012 led International Data Corp. last month to increase its forecast for the worldwide market to 107.4 million units for the year, up from its previous forecast of 106.1 million units.

The iPad accounted for 72.5 percent of China’s tablet market in 2011, according to research company Analysys International. Lenovo Group Ltd. had 4.7 percent market share, while Samsung had 4.6 percent, according to Analysys.

IPad Trademark

The maker of iPhones and iMacs (AAPL:US) settled the dispute with Proview International Holdings Ltd., a case that threatened sales in China of Apple’s second-best selling product. Before the July agreement announcement, Proview had applied to Chinese customs to block shipments of Apple’s iPad tablets in and out of China, and asked local retailers to stop sales of the product.

Carolyn Wu, an Apple spokeswoman in Beijing, declined to comment on sales of the iPad beyond the company’s July 10 statement about the product’s introduction in China.

Apple is adding partners in China including Baidu Inc., Sina Corp. and China Telecom Corp. to tailor its products for local consumers and widen distribution.

For Apple, China has made up a growing slice of sales since the introduction of the iPhone there in 2009. The most populous country accounted for $7.9 billion of revenue, 20 percent of the total in the second quarter, Chief Executive Officer Tim Cook said in April. That’s three times the level for a year earlier, he said.

The new iPad, which went on sale in the U.S. in March, will cost $499 to $829, depending on the amount of memory and the device’s wireless-connection compatibility. The company unveiled the product, with a retina display, in March.

To contact the reporter on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net


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