New iPhone's high price turns off Chinese shoppers

Apple Inc will launch an expected iPhone 8 on Tuesday, hoping the number's auspicious connotations in China will help turn around fortunes in the world's biggest smartphone market after six quarters of falling sales.

CHINA (REUTERS) - In China, eight's a lucky number.

And Apple may be hoping the next iPhone can count on good fortune when it launches on Tuesday (Sept 12).

Ever since the company hit a home run with the iPhone 6 in 2014, it has seen six straight quarters of declining sales in the world's largest smartphone market.

But with the iPhone 8 set to sell at a higher price, Chinese shoppers may skip this year's model.

Says Reuters correspondent Cate Cadell: "Lots of supply chain experts expect that it's going to be over US$1,000 (S$1,300) and you know that's double the average Chinese salary. So in the Chinese market they expect a much more innovative product.

"They expect a lot of gimmicks, they expect a lot of, you know, new and exciting features. And what's actually happened in the last two years since China went crazy for the iPhone 6 is that lots of local models started to catch up, such as Huawei, and all of a sudden the iPhone isn't inventive enough for the Chinese market."

Analysts predict a knock-on effect of Apple's costliest phone to date, a rise of sales on credit for enthusiasts that just have to have the 8.

City Index market analyst Ken Odeluga says: "There's a degree of price inelasticity visible here. I think there's maybe a bit more to go. Clearly it's not a phone for everyone. It's for certain parts of the consumption market.

"And we can certainly imagine and think that you know those sections of the market will continue to buy iPhones for many years to come."

Despite talk that the new iPhone sports an advanced touch screen and wireless charging - those are features already available in local phones, sparking scarce hype on popular social media Weibo.

And with reports of supply bottlenecks at launch for Apple's once-coveted handset, it may be better luck next time.