Hong Kong

Jony Ive’s year-ago prediction that the Swiss watch industry would be in trouble once the Apple Watch launched appears to have been correct (his actual language was said to have been stronger). Bloomberg reports that Swiss watch exports suffered their biggest slump in six years.

Shipments declined 12 percent to 2 billion Swiss francs ($2 billion), the Swiss customs office said in a statement Thursday. Adjusted for fewer working days, the drop was 7.6 percent. Exports to the U.S. dropped 12 percent.

“2015 has been one to forget for the watchmakers,” said Jon Cox, an analyst at Kepler Cheuvreux in Zurich.

The figures show that both higher- and lower-end brands are being hit hard, especially in the world’s biggest market for Swiss watches, Hong Kong … 
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On its earnings call, Apple has announced a further expansion of Apple Pay in partnership with American Express, to Australia and Canada in 2015 as well as Spain, Singapore and Hong Kong next year in 2016. Exact details are still murky — Tim Cook very specifically said ‘eligible American Express customers in these regions’ so it isn’t going to be as big as a rollout for Apple Pay as we saw for the US or UK.

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With Apple having announced all-time record iPhone sales, you might have expected analysts and investors to be impressed, and to see the AAPL share price rise as a result. Instead, the stock is actually down a little – so what gives?

The answer, like the one to so many questions today, is: China. This is the first iPhone launch where mainland China, and not just Hong Kong, has been included from day one. This means the opening weekend sales of 13M versus 10M last year aren’t like-for-like.

Apple hasn’t revealed what percentage of iPhone sales were made in China, but we can do some back-of-an-envelope sums to get a rough idea … 
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From some recent news reports and analyst pronouncements, we could easily get the impression that the relatively weak Chinese economy poses a major threat to Apple. The argument doing the rounds is that China is where Apple is seeing most of its growth at present, and the Chinese economy is tanking.

It’s absolutely the case that the importance of China to Apple cannot be overstated. Apple does continue to grow its sales in both the Americas and Europe, of course, and there is no suggestion that this is showing any sign of slowing, despite a saturated smartphone market. But worldwide growth of 33% was dwarfed by that seen in China, as one recent graph vividly illustrated.

If Chinese demand for Apple products were indeed to weaken significantly, there is no doubt that this would be a major problem for Apple. But it seems to me that the issue is being substantially over-stated … 
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Apple’s ResearchKit system is going international for the first time since its launch earlier this year with Stanford University’s MyHeart Counts app being made available for UK and Hong Kong iPhone users.  The MyHeart Counts app was among the initial iPhone-based research study apps that debuted this year. Stanford said just after the app’s release that ResearchKit did in 24 hours what would ordinarily take 50 medical centers a year to accomplish.
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Tim Cook tweeted his thanks today to the “thousands of Hong Kong customers” who attended the opening of the company’s fourth Apple Store in Hong Kong.

Plans for the store were first announced in 2013, with construction photos first seen in February. Apple announced the opening date on its website a couple of weeks ago. The additional store is part of Apple’s ambitious expansion program in China, having so far opened six of the 25 new stores it plans to open within two years.

Photos of the new store can be seen below … 
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The recently released 12-inch MacBook will be available for purchase at all Apple Stores globally beginning the week of May 25th, according to a memo from Apple to its retail staff issued earlier today. Because of supply constraints, not unlike those for the also recently-launched Apple Watch, sales of the new MacBook have been mostly restricted to Apple’s Online Store…

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Apple may be able to scale back its advertising budget for the Apple Watch: so far the device appears to be doing just fine in getting multi-page editorial coverage in the world’s fashion magazines. The latest fashion title to run a major feature on the watch is Hong Kong’s East Touch magazine, which is running a four-page spread–and has since made a cover appearance on China’s YoHo! magazine.

The Apple Watch has so far been featured Vogue China, Vogue France, the USA’s Self and the UK’s Style, as well as fashion titles in France and Germany. Apple did, however, have to pay for advertising in the US edition of Vogue. A contributing editor to Vogue also described the Apple Watch as “terrific.”

Check out the other photos from East Touch, and the YoHo! cover, below … 
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Tim Cook noted during Monday’s earnings call that Apple was “investing like crazy” in China, but he took the opportunity of his current visit to the country to put a specific number on the company’s retail expansion plans: it will open 25 new Apple Stores in Greater China within the next two years. Greater China includes both Hong Kong and Taiwan.

Speaking to local media, Cook also said that China would in time become Apple’s biggest market, reports the WSJ … 
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[youtube=https://www.youtube.com/watch?v=Ef_BznBwktw]

Casey Neistat’s latest video isn’t really news to anyone nor does it appear that Apple can or will do anything about the problem but perhaps this years delayed launch in China has exacerbated it even more.  What can Apple do in this situation?

Another video of the 5th Avenue line below:

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Apple today expanded its App Store Volume Purchase Program (VPP) to 16 important new regions. Here are the new areas:

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In an email to employees, Apple CEO Tim Cook shared his “deepest sympathies” to the people of Yunnan, China after the region was struck by a disastrous earthquake this past weekend. The earthquake took the lives of 589 people and caused the relocation of over 200,000 people, according to reports. Here’s Cook’s internal memo to employees, which was provided by a source:

Team,

Our deepest sympathies go out to the people of China’s Yunnan Province, which was struck by a devastating 6.5-magnitude earthquake over the weekend. Nearly 600 people died and over 2400 were injured in the worst earthquake to hit the region in 100 years. Rescuers have evacuated 230,000 people who are now displaced from their homes. The road to Longtoushan Township, the epicenter of the quake, has been blocked by landslides, making the rescue effort there even more challenging. Apple is eager to help. We are making a financial donation in support of the work of Mercy Corps and CFPA (China Foundation for Poverty Alleviation) to get supplies and relief to those affected by the earthquake and to help them through the process of healing and recovery. The tragedy in Yunnan Province is on the minds of many in the Apple community. Apple has over 6500 employees in China and Hong Kong as well as a growing developer community and deep ties to the workers in our supply chain who make Apple products. In this time of tragedy, our thoughts are with the victims and their families.

Tim

Cook says that Apple will be making a monetary donation to groups that provide relief efforts for those hurt by the earthquake and its ramifications. Reports indicate that the donation is worth 10 million Yuan, which converts to just over $1.6 million. Cook also notes that Apple has deep ties to the area as Apple has over 6500 employees in China, many third-party developers, and family members of supply chain personnel. Apple has also posted a message on its China homepage:

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Apple is about to roll out its Volume Purchase Program, which allows business and education customers to purchase and distribute iOS apps in bulk for deployed devices, into 16 new countries. Apple’s website for both the Volume Purchase Program for Business and for Education have been updated to announce the expansion and now list the following countries as coming soon to the program:
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[youtube https://www.youtube.com/watch?v=xdjAX5A-6qE&feature=em-uploademail]

Just over a week ago, thousands of Apple employees, including CEO Tim Cook, took to the streets of San Francisco to take part in the Pride Parade. The company has not been hesitant to share its views on LGBT rights, and the parade was yet another instance of that. This evening, Apple uploaded a video to its official YouTube channel showing off all of the effort that went into the Pride Parade last week and its “unwavering” support for equality and diversity.

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Image: thenextweb.com

Analysts say that the official launch of the iPhone on China Mobile could lead to subsidy wars as Chinese carriers compete to attract buyers. The predictions, quoted by Business Insider, follow price cuts by rival carriers China Unicom and China Telecom as China Mobile reports 1.2 million pre-orders.

China Mobile is currently offering the iPhone 5s free with a 24-month contract costing the equivalent of $98 a month. A 30-month contract on China Unicom costs $63 a month.

I do think you’re going to see a subsidy war coming,” said Michael Clendenin, managing director of Shanghai-based RedTech Advisors. “China Mobile, if they’re not making their targets on sales for these phones, they’re going to increase the subsidies […] It’s like airlines: the other guys will fall like dominoes, so China Unicom will do it and China Telecom will do it” … 
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Earlier this week we told you that Apple had announced an upcoming sale in many of its Asian online stores to celebrate the Chinese Lunar New Year taking place at the end of January. The sales see Apple offering discounts in China, Thailand, Korea, Singapore, Hong Kong, Taiwan, and Malaysia online stores similar to deals on offer for Black Friday in the US and other countries.

This year Apple is offering cash discounts on the usual products— up to $40 off iPads, $100 off Macs, and smaller discounts on iPods and Smart Covers— it’s also offering a rare discount on iPhones at around $50 off both the iPhone 5s and 5c. In addition, a much larger selection of accessories are on sale compared to the company’s Black Friday sale including popular products from Parrot, Apogee, Belkin, LaCie, and Apple.

Image: appadvice.com

Update: The Chinese government has now confirmed this date.

The iPhone looks set to be launched by China Mobile – the biggest carrier in the world’s biggest country – on Wednesday 18th December, reports the WSJ. While neither the carrier nor Apple have made a definitive announcement, China Mobile has said this is the date it will “introduce a new brand.”

The launch is expected during the company’s 4G global partners conference in Guangzhou, according to China Mobile’s website. An executive at the world’s largest mobile operator has said it is ready to start fourth-generation mobile services, though China has yet to issue 4G licenses. In September, China’s Telecom Equipment Certification Center gave Apple Inc.the final license necessary for the iPhone to run on China Mobile’s network … 
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