Apple awaits Thai reception as iPhone 8 arrives

The much-touted Apple's iPhone 8 will test the waters in Thailand on Friday following a disappointing reception in China and the US.

Sales of iPhone 8 have been lacklustre at best in the markets where it has already been in released. In the US, sales of iPhone 8 and iPhone 8 Plus accounted for 16% of all new phone sales, the company's weakest performance in years.

For the first time, the world's second largest phone maker releases two flagship models almost concurrently. The iPhone X, which will be on shelves on Friday in the US, will be its most expensive handset to date with a starting price of $999.

According to an Apple Thailand's announcement yesterday, the 64GB version of iPhone X will retail for 40,500 baht. The 64GB versions of the iPhone 8 and 8 Plus will retail for 28,500 and 32,500 baht respectively.

Lower priced Chinese phones have been eating into Apple's global smartphone market, which dropped from 16.1% in 2015 to 14.5% last year.

In Thailand, competition from Samsung and Chinese phone makers like Huawei has intensified over the past year, said Jarit Sidhu, head of operations of market intelligence firm IDC Thailand. In China, retailers cut the price of the iPhone 8 by about 20% in order to stimulate demand for the model, which has lagged prior to the launch of the iPhone X. The rising demand spurred by the discounts is unlikely to be maintained into the fourth quarter, according to Reuters.

The iPhone X, which offers a noticeably different design, is expected to support the top line growth of the California company, which is up 52% year-on-year (as of Nov 1).

Close to 40% of consumers who plan to buy a new device in the coming month said they would like to try the iPhone X before making a decision, according to a study published by tech research firm Creative strategies cited by The Wall Street Journal.

The shift towards high-end models bodes well for Apple, but sales of iPhone 8 are hard to predict, said Mr Jarit. "It is unprecedented. Apple has never released two flagship models at practically the same time."

"We do not expect the first wave of sales to be high. The first adopters are likely to go for the iPhone X," said Mr Jarit. Demand can be expected to partially shift to the more affordable iPhone 8 after that, he added.

Sales for iPhone 7 have been highest after the iPhone 8 was announced, which indicates that price-conscious consumers favour the previous model.

The Thai smartphone market is experiencing a growth slowdown and is nearing the point of saturation The market is approaching maturity, as nearly 60% of Thais will own at least one smartphone in the near future.

In the past, growth was largely driven by entry level model, but this year an increasingly large part of sales will come from the mid and high-end segments, said Mr Jarit.

While the shift towards higher priced models may benefit Apple, sales of the new models may face substantial competition from used iPhone handsets.

The market is experiencing an important transformation as sales shift from the first to the second- and third-hand markets, Mr Jarit said.

Sellers of previous iPhone models on the secondary market can expect the release of the iPhone 8 and iPhone X to have minimal or no effect on the prices of those products, said Kanis Saengchote, business lecturer at Chulalongkorn University.

"What we found in our recent paper is that iPhone resale prices decline predictably with age, and there is no evidence of any sharp change in price after new models become available: the obsolescence seems to be priced in," he said.