I've seen the future. I can't afford it - How to be a Zillionaire!
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Iphone tanks in China
THE HOPE that Apple could flog its products in the massive Chinese market at the same high prices that it gets away with in western countries has proven fruitless.
All the way down the line, Jobs Mob has made mistakes in the Far East. First it teamed up with China Unicom, which is the also ran to the biggest player, China Mobile.
China Unicom understandably wasn't Steve Jobs' first choice but he also did not want to back down on pricing to get China Mobile on board. China Mobile's executives apparently listened to what Jobs told them they had to pay him and politely told him to go forth and multiply in the best ancient Chinese tradition.
China Mobile instead launched a bunch of Android smartphones and is laughing all the way to the bank. It reported a better-than-expected 6.8 per cent increase in profits for the quarter, earning $4.7 billion.
Apple had hoped that its magic would work at Unicom, which did what it was told and gave Steve Jobs all he wanted.
Dispite some small sales of the Iphone in China, the product tanked and Unicom reported a staggering 54 per cent fall off in profits for the second quarter, with earnings of only $205 million.
HSBC analyst Tucker Grinnan told Business Week that the Iphone was the cause of China Unicom's terrible numbers.
The problem was that Unicom spent far too much on marketing to attract customers to the Iphone. It worked, in a sense, but hordes of savvy Chinese punters just went and bought their Iphones on the grey market where they were cheaper and unlocked.
Unicom sold 500,000 Iphones in the first half of 2010, while the Chinese bought another 400,000 on the grey market.
All up it was a kick in the assets for Apple, which had hoped for huge sales from the Chinese market and lots more people locked into its walled garden.
When Apple said it was pushing into China I pointed out that it didn't have a bats chance in hell, mostly because Jobs' Mob totally fails to understand customers who don't have much money and are more careful with what they do spend.
Apple fanbois will write Steve Jobs a large cheque for anything he tells them is "cool and magical", but the Chinese are a lot more careful.
Apple made a similar mistake in Russia, which has remained stubbornly impenetrable to Jobs' reality distortion field.
Apple arranged a press conference but rather than finding hacks who were prepared to give it a standing ovation, it got some pretty tough questions. One actually asked why he would spend a month's salary on an MP3 player.
For Apple to succeed in either Russia or China it has to adapt its business model in those markets considerably and that is something that it has shown complete inflexibility about. µ
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they probably sold them in hong kong but what about the rest of the country.
do the math
Apparently in China, the China Unicom is the only carrier that is licensed to provide WCDMA, which most of the world's 3G phones (including the iPhone) use. China mobile only provides GSM and the Chinese-owned 3G standard TD-SCDMA. That's probably a significant reason why Apple teamed up with China Unicom.
Smartphones using China Mobile's GSM service have lack-lustre performance when it comes to data-intense apps, such as google maps on HTC android phones. At least that's the case here in Shanghai.
...go the Apple fanbois.
what what er ar ar you you talking about jernanlizm ?
why don't you just shutup
Nick, I get that you don't like Apple. No problem there. But I don't get how you would consider 900,000 unit sales to be a failure? SG&A expenses only rose 17% and Unicom's revenue increased even more. Part of it was accounting for how they pay Apple for their phones and that is consistent with any subsidized phone. Other expenses were improving the 3G network.
The iPhone, like many smartphones, costs more money than other devices. There are going to be some segments of the population that can't afford it - just like happens in the US, Europe, and Japan.
Could it be that the population decided that other phones were a better value and while 900,000 units was impressive you could still argue that it wasn't a big marketshare.
I am with many others when I say that this seemed more like a rant than an article based on fact. Those can be entertaining, but I don't mistake them for news.
Spelling mistakes, poor syntax and tired expressions do not make for good journalism.
Yeah, I don't get it. These same people are here everyday, bashing every single article that makes fun of monopolistic companies.
Suddenly all Apple/Microsoft fanboys are journalism experts themselves.
If this site is so journalistic bad, I'm yet to figure out what powerful force keeps pushing them here.
What a load of jacked up Apple idiots without arguments up there... ccc...
A poor excuse for the "best phone ever" doesn't sell and it's Inquirers' fault, is it?
Oh, and one guy goes abroad and buys something foreign (like everyone else) to bring home, and suddenly China luster for the broken gadget... aha, sure.
And in the end you sorry lot are the only ones that care, the majority of us couldn't give a toss about overpriced hyped plastic brick that doesn't work as it should anyways.
It is actually extremely funny to see how diluted and confused Apple users are when they go out of their walled surroundings and get slapped arround for owning a stupidity product, especially in person, such joy, hehe :)
@INQhaters and peddlers of broken dream fanboys
Go forth and multiply in the oldest Western Tradition!
If you dont like the wit and style of the INQ, then do not bother reading and wasting bandwidth that can be used in Africa to check an email on silly comments that accuse INQs style of journalism. Go back to your Cupertino roots and log on to something more stylish, for e.g Dailymail.
I don't see any inquiry or inquiry on this site. It's just some pseudo journalists having a rant with rather banal and tired humour. How about getting more writers that that write with intelligence and wit. The Inquirer what a joke. What about a change gents to www.thedefecator.net as the content of this web-shyte is pretty 5h1t and secondhand 5h1t at that.
I'd confirm this - recently we had Chinese associate visiting USA. guess what he was shopping for? strangely enough iphone is made out there but hard to get at reasonable ;) price.
You are full of it. The iPhone 4 has not been released in china but is selling like hotcakes in the grey market. Pseudo-journalism at it's finest. Shameless.
If I remember, iPhone 3GS in India was announced only when iPhone 4G was coming out. Yet another country with huge potential market, but where Apple Jedi mind tricks have not worked
I'm guessing that the iPhones that Jobs *did* manage to sell were bought by the "nouveau riche" of China. They're the rich bumpkins who like to cover themselves in name-brands, and visit the resort casinos in that region being rude and uncultured. You'll know one when you see one.
And hey! Maybe some clown will have the bright idea to diamond-encrust an iPhone and try to make it extra special for them too--despite still being a commodity phone anyone can buy. They can sell a diamond-encrusted rubber band too!