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August 23, 2013

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Why gold could tarnish Apple’s reputation

If Apple hopes to woo more Chinese by adding a glitzy coating — some call it champagne, some gold — to its next iPhone, it may be in for a surprise.

While gold is hugely popular as a safe haven and a status symbol — China is set to overtake India as the world’s biggest gold consumer this year — shoppers at an Apple store in Beijing weren’t all convinced it should be coupled with that pinnacle of mobile gadgetry.

Ni Suyang, a 49-year old worker at a Beijing state-owned enterprise, said that color mattered less to her than the glass surface and silver metallic finish.

“A gold color looks high-end but is a little tacky,” she said.

Gold and mobile phones are no strangers. Britain’s Gold & Co makes gold-plated iPhones, iPads and BlackBerrys which it also sells in India and China.

In Shenzhen, many small local brands make gold-plated feature phones and smartphones. The less well-heeled can adorn their devices with jewel-studded and gold phone covers.

Apple’s decision to add a champagne or gold covered iPhone to its range —  confirmed by supply chain sources in Taiwan — would be a departure from its black and white norm.

Apple could be not reached for comment.

Commercially it makes sense, said Jerry Zou, senior vice president and partner at FleishmanHillard, a public relations firm in Beijing. New colors would add “novelty and variety, both of which are key to winning over fickle Chinese consumers.”

A champagne color “would convey an image suggesting high-end luxury but a bit more restrained and subtle.”

But browsers at Apple’s Xidan store weren’t so sure — even on which gender would like it.

“Gold is for guys, I think,” said 22-year old Meng Xiang, a retail buyer working in Guangzhou, who said she preferred pink and white. “I would consider buying a gold iPhone for my boyfriend.”

Men like black

Cui Baocheng, a 48-year-old bank manager, disagreed. “I prefer black to gold,” he said. “Men usually like black. Champagne might be very ugly.”

Indeed, there’s a danger that by trying to broaden its appeal Apple may end up undermining what makes the iPhone so desirable in the first place.

Younger Chinese see gold as old-fashioned and tacky, and are increasingly opting for platinum — dubbed “white gold” in Chinese — for weddings and gifts.

“An iPhone with more colors means that Apple is adapting to consumers’ tastes, especially a gold color that Chinese people like,” said Xu Fang, a 28-year old real estate agent. “However, I think this might undermine the value and uniqueness of the brand.”

Apple’s sales in China, its second biggest market, slumped 43 percent in April-June from the previous quarter. Its market share has almost halved since last year to below 5 percent, according to industry researcher Canalys.

The bigger problem, says Shanghai-based product designer Brandon Edwards, is that while gold added “cultural relevance on top of Apple’s inherent brand value” and may attract premium users from other brands, “Apple’s main issue in China and emerging markets is centered around acquiring new customers, and this doesn’t hit those people at all.”

Indeed, consumers in India, where Apple’s market share is just over 2 percent, were just as skeptical. Mumbai phone retailer Manish Khatri said he did occasionally get customers asking for gold-colored phones, but the biggest deterrent to buying an iPhone for most of them was cost.

For others, gold is something to buy, not to slap on a mobile device.

Vikas Jindal, a 35-year old Delhi businessman and a regular buyer of gold, said: “I’ll look stupid if I carry a gold-colored phone. A phone should be simple and sober.”



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