Apple with Egg on its Face

Apple (NASDAQ:AAPL) may be wiping the egg off its face after disgruntled Chines shoppers in Beijing had an egg throwing party at Apple’s flagship store. Police were called to calm things down. Shoppers were disappointed when the company pulled all handsets from all five stores in China on January 13.  The Chinese New Year starts January 23, with a week long holiday.

Why is Apple missing out on sales that ran to $64 billion during last year’s holiday? So far Apple isn’t saying. A Beijing spokesperson for Apple, Carolyn Wu had no comment.

HTC Corporation, Motorola Mobility Holdings, Inc. (NYSE:MMI), and rival Samsung Electronics Co. appear ready to reap the benefits.

Chief executive officer of Wolf Group Asia, David Wolf said, “A large portion of Chinese New Year sales are about having the gifts in hand right now. Android devices competitive with the iPhone will benefit.”

Analysts International’s Wang Ying agreed saying, “Chinese New Year is the most important period for sales promotions. The lack of supply will give competitors an opportunity for sales.”

So where does this leave Chinese consumers like Wang Yun? Mrs. Yun and her husband  were planning to use iPhones’ FaceTime to video chat with U.S. friends.  After an hour’s drive to a closed Beijing store, the couple felt they had come a long way for nothing. Scalpers with cries of “4S here!” were claiming to offer authentic 4S handsets starting around $900.

College students were not tempted by what might be a fake. In the Xidan neighborhood store, 19-year old student Sherry Wu was thinking she could a friend to purchase an iPhone for her in Hong Kong. Fellow student Ada Li had previously purchased a Samsung Galaxy and said, “I like the Galaxy, It looks like an Apple but it’s cheaper than the iPhone.” With readily available alternatives, Apple needs to justify lost sales and address the question of goodwill.

China is only second to the U.S. for Apple’s revenue. According to Apple CEO Tim Cook, revenue in China increased by $3 billion to $13 billion last fiscal year.

Investors hope there’s a good reason for missing one of the biggest gift giving holidays in one of the world’s most populous countries.