Apple Lays Egg With Bungled Store Opening in China

This story has been updated with the correct date for Chinese New Year.

CUPERTINO, Calif. ( TheStreet) -- The chaotic scene outside Apple's ( AAPL) China flagship store in Beijing on Friday is a rare stumble for the device maker.

Apple was unprepared for the huge crowd, said to number in the thousands, eagerly awaiting the country's iPhone 4S launch on Friday. As a result, the company was forced to suspend sales of the device on fears customers would be trampled, according to the New York Times.

A huge crowd waiting in vain for Apple's iPhone 4S

The Times reports that Apple suspended sales of the iPhone 4S in the country to protect its customers and employees. Frustrated customers outside the store in Beijing's Sanlitun district responded to the news by pelting the gadget mecca with eggs. It's not just the storefront, though, that now has egg on its face.

Apple is no stranger to controlling crowds, as anyone who has visited the company's packed "cube" store on New York's Fifth Avenue can attest. Moreover, Apple's reputation for military-style planning for product launches makes the Beijing snafu even more bewildering. What's ironic is that Apple manufactures its products in China.

"It's hard to blame a company for creating too much demand for their products, but they will have to look at this situation, because it's unacceptable," explained Chris Jones, principal analyst at Canalys. "They are a victim of their own success."

Apple didn't immediately respond to a request for a comment.

Apple may have delayed its Chinese iPhone 4S launch too long after debuting the device in the U.S., contributing to the events in Beijing. "The pent-up demand has been there since October now," he said. "That's a long time when there's so much excitement for a new device -- if the launch had been done earlier, maybe this wouldn't have happened to the same extent."

Apple also may have underestimated the Chinese New Year, which takes place Jan.23. "The build-up to Thanksgiving and Christmas that we have, that's what they have in China now," Jones said.

Apple certainly talks a good game about China, with CEO Tim Cook recently citing the country as an area of "enormous opportunity." Speaking during Apple's fourth-quarter conference call, Cook said he had never seen a country with as many people rising into the middle class that aspire to buy Apple products. "We're building more stores there, as well as doing quite a few other things to continue to deliver our great products to the people of China," he said at the time.

Mainland China had only five Apple stores at the end of the company's fourth quarter, the same number as in Manhattan. With a population of more than 1.3 billion people, though, there's clearly scope for Apple to build an empire of stores in China.

To be sure, doing business in China is more difficult than in the West. Regions in the Asian nation are more provincial, requiring companies -- especially those from the U.S. and Europe -- to meet local regulations.

Nonetheless, Apple has been increasing revenue in China. The country accounted for 2% of the company's total sales in fiscal 2009, compared with 12% last year. And during the fourth quarter, China made up 16% of revenue.

Shares of the iPhone maker dipped $2.33, or 0.55%, to $419.06 on Friday.

-- Written by James Rogers in New York

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