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Apple eyes first physical store in Taiwan to sustain local boom in iPhone popularity

Apple is widely expected to open its first offline store in Taiwan, after a bit of a wait, to sustain a surge in local popularity of iPhones despite its No. 2 spot in the global smartphone market.

The store would lock in Taiwanese customers and recruit more by trying to outdo the numerous licensed third-party Apple product vendors that now control Apple’s consumer hardware market.

Some official Apple stores occupy multiple levels. They let would-be customers sit indefinitely trying out iPhones, iPads and Mac Books. Store staffers can always be called over to answer questions about a device’s functions or explain the pricing. The company uses some to open a “Genius Bar” or “Genius Grove,” where customers work alongside trained Apple reps.

Official, physical stores elsewhere also offer face-to-face customer support and hold training sessions to help people use new devices.

"As the smartphone market has gone flat over the years, the Apple store will be able to provide better after-sale services and some unique services such as Genius Grove to enhance user experience, which is likely to help the company sustain its dominant market position in Taiwan," said Eddie Han, an analyst with Taipei-based tech market research firm Market Intelligence & Consulting Institute.

Apple's publicists in greater China declined to comment for this report and a company customer service agent in Taiwan said no date had been set yet for the store’s opening.

But the local employment search website 1111 Job Bank already lists a series of positions to be filled by the store.

TAIWANESE PREFER BIG-SCREEN IPHONES

Apple commanded an unusually high 20.3 percent of Taiwan’s total smartphone sales in 2015, followed by local brand HTC’s 18.3 percent and Samsung’s 17.8 percent, per Market Intelligence & Consulting Institute data. Worldwide, Apple took a 14.6 percent share in the second quarter of 2016 and Samsung led all brands at 21.8 percent, according to market research firm Gartner.

Apple lists 36 of its own stores in China and five in Hong Kong. One Hong Kong outlet occupies two brightly lit stories of the bayside IFC Mall. It was buzzing with customers, some trying devices and others chatting over hot drinks, on a weekday afternoon in August.

The Silicon Valley icon may have sighted Taiwan only this year because the iPhone 6 raised its overall brand popularity, said Ian Fogg, head of mobile and telecoms with high-tech research firm IHS Technology. The 6 came with a screen big enough to be "attractive in Taiwan," he said, and Taiwanese consumers typically prefer larger displays.

Third-party retailers of Apple gear will probably feel an impact when the official store first opens, said Alston Pan, a purchasing official with the iStore chain in Taiwan. iStore has 11 Apple gear outlets in Taiwan, including three in Taipei, and its first one opened about eight years ago. A longer-term hit to business is unlikely, Pan said, because iStore has picked prime locations and found a customer following. He's braced for the official Apple store to reach Taiwan next year.

The influence of authorized third-party retailers such as iStore may explain why Apple waited on Taiwan, some analysts suggest. "Apple didn’t feel the strong need (for) opening up a physical Apple store in Taiwan,” says Linda Sui, wireless smartphone strategies director with United Kingdom-based market research firm Strategy Analytics.

Apple is also eyeing Singapore for its first official store or two after a focus on outlets in China, says Bryan Ma, client devices vice president with fellow research firm IDC Asia-Pacific and Worldwide.

"It's likely that they evaluate how much marketing buzz and user retention they can get by having such a 'shrine' of Apple products sitting in a high-traffic location," said Ma, himself based in Singapore. "Keep in mind that in many ways, Apple stores are living, breathing advertisements for its products."