Fans line-up in Asia 2 days before new iPhone launch

Seeking to be one of the world's first to grab the new-generation iPhone, fanatical Apple fans around Asia are queuing up two days before its launch, undiscouraged by rain or freezing temperatures.


The July 11 launch will be the first chance for Asian consumers to own an iPhone, and related websites have been swamped with inquiries and early orders.

In Japan, one of the world's most advanced mobile markets, about 20 people were lined up outside Softbank Corp's flag ship mobile store in Tokyo on Wednesday morning, with a sign at the head of the queue reading "We Love iPhone".

"The big appeal (of the iPhone) is that this is an Apple product," said Hiroyuki Sano, a 24-year-old graduate student who early on Tuesday arrived in rainy Tokyo from Nagoya, 225 miles west of the capital, to be first in line.

He will turn 25 on Thursday while waiting to get his hands on the high-end version of the iPhone with 16 gigabytes of memory. Apple also offers an entry-level version with an 8 gigabyte memory.

"I've told my professor I was going to go buy an iPhone, and he gave me permission," said Sano, wearing a T-shirt with an Apple logo. "He is an Apple-lover too, and he sent me off cheerfully."

The long-anticipated 3G iPhone, which has faster Web links than its predecessor and supports third-party applications such as games and email, will debut in Japan, Hong Kong, Australia, and New Zealand on Friday as part of the global launch in 22 countries.

The original iPhone was only available in the United States and Europe, and the next-generation model is expected to go on sale in 70 countries by the end of the year.

Shares of Apple gained 2.5 percent on Tuesday ahead of the launch. Softbank shares rose 1.9 percent on Wednesday.

Softbank, Japan's third-biggest mobile carrier, will start selling iPhones at its flagship store at 7 a.m. on Friday (2200 GMT Thursday) and expand sales nationwide at noon.

Targeting a far bigger market with its new iPhone, Apple slashed the handset price and is allowing carriers to subsidize the phone this time around, making it easier for users to bring home the device.

Research firm Enterbrain said 6.7 percent of 1,200 people it surveyed in Japan wanted to buy an iPhone immediately.

WORLD'S FIRST

Four New Zealanders with deck chairs, sleeping bags and a small tent started queuing on a chilly Tuesday night outside the Auckland shop of Vodafone, which will launch the iPhone at 12:01 a.m. Friday (1201 GMT Thursday), the first in the world.

"I'm really just doing it to be able to say that I'm the first one in the world with one of these phones," 22-year-old student Jonny Gladwell told the New Zealand Herald.

Vodafone, New Zealand's top mobile carrier, is selling the phone for as little as NZ$199 ($150) in the country if consumers sign up for a two-year contract. Demand for pricing details was so heavy it crashed Vodafone's New Zealand website on Tuesday.

In Hong Kong, Hutchison Telecom International was flooded by 60,000 online applications over the weekend from consumers who are hoping to grab one of just 500 phones on sale.

A number of the more desperate would-be users pleaded online they needed the iPhone to appease demanding wives or stressed it was their birthday, according to Hong Kong media.

The only woman in the Tokyo queue said she was securing places in line with her co-workers so that her company, Ubiquitous Entertainment Inc, can own iPhones and develop content for the device.

Despite the hype, analysts say Japan's 108 million mobile subscribers who are already frequent users of Web browsing and email on 3G networks might not be easily wowed by the iPhone.

Most of the people in the Tokyo queue told Reuters they plan to buy the device as their second cellphone.

"We can expect certain demand from core Apple fans and others, but there will be users who would hesitate about buying the iPhone because of the high monthly charges of some 8,000 yen," said Hironobu Sawake, a JPMorgan senior analyst in Tokyo.

"Even though there will be other features that are more attractive than ordinary phones, the fact that the iPhone does not offer some features that are available on most handsets could turn off some users too," he said.

Toyota struggles to meet hybrid, small car demand

The surge in popularity for small cars and fuel-efficient hybrids has left Toyota Motor Corp facing an unusual problem: deepening shortages of popular models such as the Prius hybrid.

A limited inventory of small cars hurt Toyota, which reported a 11.5 percent drop in U.S. sales in June.

In stark contrast, Japanese rival Honda Motor Co reported a 13.8 percent sales rise on record demand for its Fit subcompact car and Civic sedan.

Toyota executives said a dwindling inventory of vehicles, such as the Prius, Yaris and Corolla, had forced the automaker to scramble to try to keep up with demand in June, a month when industry-wide U.S. auto sales dropped almost 9 percent.

Sales of Toyota's Prius, the top-selling hybrid in the U.S. market, fell 26 percent as dealers ran short of inventory and customers faced a six-month waiting list. Toyota said it would only partly be able to satisfy the backlog of demand from its dedicated Prius factory in Japan this year.

Hybrids command about a $5,000 price premium compared with equivalent vehicles without the expensive battery.

"It is very doubtful that there is going to be a lot of recovery this year to be able to satisfy consumer demand and that is very unfortunate," said Jim Lentz, Toyota's head of North American sales, referring to the Prius.

Toyota had a one-day supply of the Prius hybrid and a 2-1/2 day supply of its hybrid Camry sedan at the end of June.

Inventory of other popular Toyota cars also ran low in June. Dealer supply of Corolla sedans was down to a 15-day supply, while Yaris had a 7-day supply at the end of June, the automaker said.

Toyota said it expected inventories of Yaris and Corolla to increase in August and was working to add capacity at its hybrid battery manufacturing plant in Japan.

The current generation Prius uses nickel-metal hydride batteries made by Panasonic EV, a joint venture between the automaker and Matsushita Electric Industrial Co Ltd.

Toyota, which put the world's first hybrid car on the road in 1997, has a goal of reaching global annual sales of 1 million hybrid vehicles soon after 2010 -- more than double last year's sales tally.

Toyota's Lentz said the production constraint made it hard to forecast how large the market for the hybrid model could be in the United States, the Japanese automaker's largest market.

"We don't know what the top end on Prius is," Lentz said.

In a J.D. Power survey, 72 percent of U.S. consumers said they were interested in buying a hybrid.

Overall, the U.S. sales performance of the three major Japanese automakers were mixed in June with Nissan Motor Co posting a 7.5 percent decline.

Honda bucked the downtrend in overall U.S. light car sales, outselling Chrysler LLC for the second consecutive month in June to grab the No. 3 spot in the U.S. market.

On a combined basis, the three major Japanese automakers increased their share of the U.S. market to 34.7 percent, up from 32.9 percent from a year ago.

The market share of the three Detroit automakers -- General Motors Corp, Ford Motor Co and Chrysler -- fell to 45.8 percent in June from 50.2 percent a year earlier.