Apple's (NASDAQ: AAPL) iPhone 6 and 6 Plus will go on sale in China on Oct. 17, giving the company a chance to regain market share in the world's largest smartphone market. Apple received approval from Chinese regulators to sell the phones only after it addressed privacy concerns that the regulators brought up in testing the phones.
Apple said preorders for the new iPhones will start Oct. 10, about a month after preorders began in the U.S. and other Western countries. Apple said the iPhone 6 will be available in China for a suggested unsubsidized retail price of 5,288 yuan ($688) for the 16 GB model, 6,088 yuan ($992) for the 64 GB model and 6,888 yuan ($1,122) for the 128 GB model. Meanwhile, the more expensive iPhone 6 Plus will be available in China for 6,088 yuan for the 16 GB version, 6,888 yuan for the 64 GB model and 7,788 yuan ($1,268) for the new 128 GB model.
This will mark the first time Apple has launched new iPhones simultaneously on all three state-run Chinese operators: China Mobile, China Telecom and China Unicom. Together, the three carriers had more than 1.27 billion mobile subscribers in August, according to Reuters, potentially offering Apple fertile ground for iPhone sales, especially because Chinese consumers have gravitated to phones with larger screens. The iPhone 6 has a 4.7-inch display, and the 6 Plus sports a 5.5-inch screen, the first time Apple has made iPhones with screens larger than four inches.
Apple sold 10 million units of the iPhone 6 and 6 Plus after the gadgets' debut sales weekend, surpassing the 9 million units Apple sold last year during the opening weekend of sales of the iPhone 5s and 5c. However, the company faces pressure in China not only from lower-cost rivals, such as Lenovo and Xiaomi, but also from regulatory scrutiny.
"Apple is coming under greater scrutiny on personal data security from the government," Shaun Rein, managing director of the China Market Research Group in Shanghai, told Bloomberg. "This is definitely starting to affect consumers and some are thinking twice about buying Apple now because the government has made them nervous."
China's Ministry of Industry and Information Technology (MIIT) said it awarded network licenses for the new phones only after Apple assured the ministry that the devices did not have "back doors" through which U.S. agencies could access users' data. Apple also addressed risks of personal-information leaks related to diagnostic tools in its iOS 8 software, which supports health and fitness monitoring, the ministry said.
According to Reuters, the MIIT said it conducted "rigorous security testing" on the iPhone 6 and discussed security concerns with Apple, which shared materials related to potential security issues. Regulators were concerned about a third party's ability gain access to a computer that had been given trusted access to the phone by a user, according to Reuters. Apple was also questioned about the ability of staffers repairing iPhones to access user data through background services.
Apple told the MIIT that it had put new security measure in place for its latest smartphone software, iOS 8. According to media reports, Apple declined to comment on the ministry's concerns or what changes it might have made and instead pointed to the company's privacy website.
"Apple has never worked with any government agency from any country to create a 'back door' in any of our products or services," the company said on its privacy website. "We have also never allowed any government access to our servers. And we never will."
Additionally, earlier this month Apple disclosed that iOS 8 includes deep protection of customer data and that it cannot technically turn over customer data under the new software even if served with a warrant.
Apple noted that with iOS 8, users' personal data, such as photos, messages (including attachments), email, contacts, call history, iTunes content, notes and reminders are all placed under the protection of a user's passcode. "Unlike our competitors, Apple cannot bypass your passcode and therefore cannot access this data," the company noted. "So it's not technically feasible for us to respond to government warrants for the extraction of this data from devices in their possession running iOS 8."
- see this release
- see this Reuters article
- see this Bloomberg article
- see this WSJ article (sub. req.)
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