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In Asia's trend-setting cities, iPhone fatigue sets in

2013-01-28 08:11:15

By Jeremy Wagstaff | Reuters

SINGAPORE (Reuters) - Apple Inc's iconic iPhone is losing some of its luster

among Asia's well-heeled consumers in Singapore and Hong Kong, a victim of

changing mobile habits and its own runaway success.

Driven by a combination of iPhone fatigue, a desire to be different and a

plethora of competing devices, users are turning to other brands, notably those

from Samsung Electronics Co Ltd, eating into Apple's market share.

In Singapore, Apple's products were so dominant in 2010 that more devices here

ran its iOS operating system per capita than anywhere else in the world.

But StatCounter http://gs.statcounter.com, which measures traffic collected

across a network of 3 million websites, calculates that Apple's share of mobile

devices in Singapore - iPad and iPhone - declined sharply last year. From a

peak of 72 percent in January 2012, its share fell to 50 percent this month,

while Android devices now account for 43 percent of the market, up from 20

percent in the same month last year.

In Hong Kong, devices running Apple's iOS now account for about 30 percent of

the total, down from about 45 percent a year ago. Android accounts for nearly

two-thirds.

"Apple is still viewed as a prestigious brand, but there are just so many other

cool smartphones out there now that the competition is just much stiffer," said

Tom Clayton, chief executive of Singapore-based Bubble Motion http://

www.bubblemotion.com, which develops a popular regional social media app called

Bubbly.

Where Hong Kong and Singapore lead, other key markets across fast-growing Asia

usually follow.

"Singapore and Hong Kong tend to be, from an electronics perspective, leading

indicators on what is going to be hot in Western Europe and North America, as

well as what is going to take off in the region," said Jim Wagstaff, who runs a

Singapore-based company called Jam Factory http://www.jamfactoryonline.com

developing mobile apps for enterprises.

Southeast Asia is adopting smartphones fast - consumers spent 78 percent more

on smartphones in the 12 months up to September 2012 than they did the year

before, according to research company GfK http://www.gfkrt.com.

IN WITH THE YOUNG CROWD

Anecdotal evidence of iPhone fatigue isn't hard to find: Where a year ago

iPhones swamped other devices on the subways of Hong Kong and Singapore they

are now outnumbered by Samsung and HTC Corp smartphones.

While this is partly explained by the proliferation of Android devices, from

the cheap to the fancy, there are other signs that Apple has lost followers.

Singapore entrepreneur Aileen Sim, recently launched an app for splitting bills

called BillPin http://www.billpin.com, settling on an iOS version because that

was the dominant platform in the three countries she was targeting - Singapore,

India and the United States.

"But what surprised us was how strong the call for Android was when we launched

our app," she said.

Indeed, 70 percent of their target users - 20-something college students and

fresh graduates - said they were either already on Android or planned to switch

over.

"Android is becoming really hard to ignore, around the region and in the U.S.

for sure, but surprisingly even in Singapore," she said. "Even my younger

early-20s cousins are mostly on Android now."

BillPin launched an Android version this month.

Napoleon Biggs, chief strategy officer at Gravitas Group http://

www.gravitas.com.hk, a Hong Kong-based mobile marketing company, said that

while Apple and the iPhone remained premium brands there, Samsung's promotional

efforts were playing to an increasingly receptive audience.

For some, it is a matter of wanting to stand out from the iPhone-carrying

crowd. Others find the higher-powered, bigger-screened Android devices better

suited to their changing habits - watching video, writing Chinese characters -

while the cost of switching devices is lower than they expected, given that

most popular social and gaming apps are available for both platforms.

"Hong Kong is a very fickle place," Biggs said.

Janet Chan, a 25-year-old Hong Kong advertising executive, has an iPhone 5 but

its fast-draining battery and the appeal of a bigger screen for watching movies

is prodding her to switch to a Samsung Galaxy Note II.

"After Steve Jobs died, it seems the element of surprise in product launches

isn't that great anymore," she said.

To be sure, there are still plenty of people buying Apple devices. Stores

selling their products in places such as Indonesia were full over the Christmas

holidays, and the company's new official store in Hong Kong's Causeway Bay has

queues snaking out of the door most days.

But the iPhone's drop in popularity in trendy Hong Kong and Singapore is

mirrored in the upmarket malls of the region.

"IPhones are like Louis Vuitton handbags," said marketing manager Narisara

Konglua in Bangkok, who uses a Galaxy SIII. "It's become so commonplace to see

people with iPads and iPhones so you lose your cool edge having one."

In the Indonesian capital Jakarta, an assistant manager at Coca Cola's local

venture, Gatot Hadipratomo, agrees. The iPhone "used to be a cool gadget but

now more and more people use it."

There is another influence at play: hip Korea. Korean pop music, movies and TV

are hugely popular around the region and Samsung is riding that wave. And while

the impact is more visible in Hong Kong and Singapore, it also translates

directly to places like Thailand.

"Thais are not very brand-loyal," says Akkaradert Bumrungmuang, 24, a student

at Mahidol University in Bangkok. "That's why whatever is hot or the in-thing

to have is adopted quickly here. We follow Korea so whatever is fashionable in

Korea will be a big hit."

(Additional reporting by Lee Chyen Yee in Hong Kong; Khettiya Jittapong and Amy

Sawitta Lefevre in Bangkok, and Andjarsari Paramaditha in Jakarta; Editing by

Emily Kaiser)