Apple Store Pelted With Eggs in Botched IPhone Debut

By Bloomberg News - Jan 13, 2012 11:15 AM GMT+0700

Apple Inc. (AAPL), whose skill at hyping new products has helped make it the world’s most valuable technology company, became a victim of its own success with a botched introduction of its iPhone 4S in China.

Would-be customers who had endured a wait overnight as temperatures dropped below minus 9 degrees Celsius reacted with fury after the company’s main store in Beijing’s Sanlitun district failed to open.

Apple had advertised that the store would open at 7 a.m. At 7:15 a.m., people began chanting “Open the door!” and “Liars!” after a man said over a bullhorn that the phone wouldn’t go on sale today, without giving an explanation. Beijing police temporarily cordoned off the store after it was pelted with eggs from the crowd.

Elsewhere in the capital, the introduction went more smoothly. At Apple’s store in the Xidan neighborhood, the company handed out 1,000 tickets good for the purchase of a maximum two iPhone 4S handsets each. In Shanghai, a store in the Pudong district opened an hour early to accommodate the waiting crowds before selling out of the phones immediately.

“I’m very angry,” said Li Yun, 59, a retiree who said she’s trying to buy the device on behalf of her daughter. She was in line at the People’s Square store in Shanghai. “They had said they would start selling the iPhone 4S at 7 a.m. but I was told they were already sold out by the time I got here at 6 a.m.”

Migrant Workers

Carolyn Wu, a Beijing-based Apple spokeswoman, didn’t immediately respond to telephone calls and e-mails. Beijing police didn’t immediately respond to a fax seeking comment.

About 60 migrant workers, hired by resellers to line up last night outside Apple’s store in Beijing’s Xidan, weren’t paid the 120 yuan ($19) they were promised because they failed to get an iPhone 4S after the 12-hour wait, according to several of the workers, who asked not to be named for fear of reprisal. They came by bus from a labor market in the suburbs and received only a 10-yuan food allowance, they said.

Apple planned to sell the latest iPhone model through its three stores in Shanghai and two in Beijing, the two main cities in the world’s largest mobile-phone market. The Cupertino, California-based company sold 5.6 million iPhones in China in the first nine months of last year, giving it a 10.4 percent share of the smartphone market in the third quarter, according to research company Gartner Inc. Apple’s Wu earlier declined to comment on the outlook for iPhone 4S sales in China.

Online Sales

Apple’s stores in China generate, on average, the highest traffic and highest revenue of any company stores in the world, Chief Financial Officer Peter Oppenheimer said last January.

Today’s confrontation wasn’t the first at the Sanlitun store during a product introduction. In May, the store was temporarily closed when a group that lined up outside to buy the iPad 2 “became unruly,” Wu of Apple said at the time. Four people were injured and a glass door to the shop was smashed, the China Daily reported.

China Unicom (762) (Hong Kong) Ltd., the nation’s second-largest carrier, is the only one of the country’s three service providers offering the iPhone with a service contract. The company sent a text message to subscribers trumpeting free home delivery of the new handset through its online store.

“Buy the iPhone 4S without lining up!” China Unicom said in a text sent to subscribers in Beijing. Unicom’s online shop made the device available at midnight, the text said.

16-Gigabyte Model

Sophia Tso, a spokeswoman at China Unicom in Hong Kong, didn’t immediately reply to messages left by phone and e-mail seeking comment.

The site lists the 16-gigabyte model for 5,880 yuan ($930), with different levels of subsidies. The handset is free to users committing to a three-year plan for 286 yuan a month or a two- year plan costing 386 yuan a month, the website said.

The crowd around Apple’s main Beijing store diminished after police lifted the cordon and the doors remained closed. Some continued to wait for a chance to buy the phone, which includes voice recognition software that doesn’t work with Mandarin.

“I’m angry because they said they’d sell it, and now they aren’t selling it,” Tony Si, an 18-year-old bartender, said outside the store.

Store employees eventually put up a sign saying the phone wouldn’t be sold today, and police asked remaining people outside to go home, telling them the store wouldn’t open at all today.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net