By Dan Gallagher, Virginia Harrison and V. Phani Kumar, MarketWatch
Nearby, a Softbank Corp. store ran a countdown clock for their own open, with the telecom’s Chief Executive Officer Masayoshi Son leading a cheer among those waiting in line. Softbank /quotes/zigman/139194 JP:9984 +0.16% /quotes/zigman/139200/quotes/nls/sftbf SFTBF -1.88% and rival KDDI Corp. /quotes/zigman/139564 JP:9433 +0.70% /quotes/zigman/139569/quotes/nls/kddif KDDIF +3.13% are Japan’s exclusive iPhone carriers.
By contrast, Hong Kong’s flagship Apple store saw comparatively shorter lines, as the new iPhones were reserved for those who had pre-ordered and received a confirmation email from the store.
“If you don’t receive an email, we were unable to reserve an iPhone for you, and you can try again another time,” Apple said on its Hong Kong website.
But that didn’t stop other Hong Kong residents from scrambling to get the latest iPhone. A 16-gigabyte iPhone 5 was selling for as much as 8,800 Hong Kong dollars ($1,128) in the gray market, according to the South China Morning Post, compared to the official price of HK$5,588 for buying the phone off the shelf, without a plan.
Media reports also cited accounts of individuals who were buying the iPhone 5 to immediately resell it at a premium.
Complaints begin
However, some controversy was also accompanying the high-profile launch. Several early reviewers pointed to Apple’s new mapping application — which replaces the one designed by Google Inc. /quotes/zigman/93888/quotes/nls/goog GOOG +0.08% used in previous devices — as a weak point of the new device.
Some consumers also chimed in with similar concerns Thursday, after the iOS 6 operating system that will power the iPhone 5 became available for downloading to older devices. That update also included Apple’s new mapping software.
“This is ridiculous,” said one user on one of Apple’s community boards, complaining about the new mapping app.
An Apple spokeswoman told Dow Jones Newswires on Thursday that the company is working to improve the mapping product, which includes free turn-by-turn navigation capabilities. See: Apple working to improve map service.
Apple sees big market for iPhone 5
To meet Wall Street's high expectations for the iPhone 5, Apple also will need to keep bringing in customers who are new to the smartphone market. Dan Gallagher reports on digits.
“We launched this new map service knowing it is a major initiative and that we are just getting started with it,” Apple spokeswoman Trudy Muller told Dow Jones Newswires.
“Maps is a cloud-based solution, and the more people use it, the better it will get. We appreciate all of the customer feedback and are working hard to make the customer experience even better,” she said.
The iPhone 5 is built on a thinner, lighter frame than its predecessor, with the casing composed of glass and aluminum that enlarges the screen to about 4 diagonal inches — up from the 3.5-inch design that has been with the iPhone since its first launch. It also features a faster chip and the ability to connect to high-speed LTE networks.
The improvements and the broad global launch have fueled high expectations for the iPhone 5 — and for Apple — on Wall Street. Several analysts believe Apple will sell more than 10 million units of the iPhone 5 in the next two weeks to close out the company’s fourth fiscal quarter. Most targets for iPhone shipments in the December period range from 45 million to 50 million units.
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The iPhone is Apple’s most important product, from a business standpoint, driving 53% of the company’s total revenue for the first nine months of the company’s current fiscal year. Apple has shipped more than 98 million units of the device in that period — up 77% from unit sales in the same time last year.
Analysts estimate that the iPhone delivers profit margins above 50%, thanks in large part to high subsidies paid by wireless carriers that allow Apple to sell the device at a starting price of $199 with a two-year service contract.
JP : Japan: Tokyo
Volume: 3.13M
Sept. 21, 2012 2:35p
¥32.86 million
¥12.82
US : U.S.: OTCBB
Volume: 680.00
Sept. 20, 2012 3:47p
$44.62 billion
JP : Japan: Tokyo
Volume: 7,456
Sept. 21, 2012 2:35p
¥24.49 million
US : U.S.: OTCBB
$ 6,570.26
+199.37 +3.13%
Volume: 71.00
July 3, 2012 12:00a
$29.47 billion
US : U.S.: Nasdaq
Volume: 2.91M
Sept. 20, 2012 4:00p
$239.46 billion
Dan Gallagher is MarketWatch's technology editor, based in San Francisco. Virginia Harrison is a MarketWatch reporter based in Sydney. Varahabhotla Phani Kumar is a reporter in MarketWatch's Hong Kong bureau.
