- Tuesday, 9 February 2010
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Please do not read while the train is standing in the station
Iphone tanks in China
DESPITE PHOTOS of enthusiastic would-be Iphone buyers queuing up outside shops to buy the new gadget, Apple's smartphone looks as though it's likely to flop in China.
Chinese sales figures show that less than 5,000 Iphones were sold in the first four days, compared with 140,000 that Jobs' Mob flogged in the US during its launch there.
Cynics would say that the queues of people were probably even staged in a bid to give the impression that the Chinese gave a damn about allowing the Apple religion take hold in China.
We have said before that Apple had no chance of getting anywhere in countries like China and Russia without an impossible change in its mindset.
After piddling around for ages trying to find an exclusive deal with a carrier dumb enough to subsidise the Iphone, Apple finally signed a contract with China Unicom.
However Apple did not want to change a single thing on the Iphone and did not want to adapt to China's WiFi standard. So it launched a phone that was about the same price as in the US but actually could do much less. It would also require people to pay to update their phone.
China Unicom Chairman Chang Xiaobing tried to put a brave face on the launch figures saying that he was "satisfied with Iphone sales so far". He still thinks that he can get a million new 3G subscribers each month in the near future.
Quite how he will do this when there is already a thriving gray market for the Iphones that are cheaper and not tied to one mobile network operator he did not say.
Piper Jaffray's Gene Munster told Reuters that the Iphone's debut in China was "a disappointment." For some reason he'd believed that China would contribute 1 million to 2 million Iphone sales to worldwide total unit sales next year.
Now he thinks that the best China will manage is 550,000 total sales next year. Good but not enough.
He also thinks that business for the Iphone might pick up after China finishes its 3G network.
However Munster seems to have ignored the fact that other carriers in China can wipe the floor with the Iphone by selling cheaper handsets that are more tailored to the Chinese market. Even if the Iphone is reduced in price, and there are no indications that it ever will be, Apple still has no idea how to get the Chinese to buy it.
It is the same problem Apple faced in Russia. In countries with large populations but little cash, ways have to be found to get the gadgets that people want into their hands without breaking the bank.
To such markets Apple is the stereotypical arrogant American tourist who shouts about a lack of ice machines in his hotel and wants to know the location of the nearest McDonalds.
Apple has arrogantly shown up, made no attempt to change its business model and been laughed out of the marketplace by business people who are more savvy about local conditions. There are still some places in the world where smugness is a curse. µ
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nuff said 8)
Hey Nick,
why dont you for once spend time researching your crap articles.
China or chinese are in no way people with limited cash. They have ample, but just because they have, doesnt mean they will spend. They are much smarter than atleast you.
Why should they spend money for a phone that doesnt have all the features they want, when , chinese made duplicates of iphone can provide them the same at half the price. Moreover the operator is also not the #1 in mkt in china.
Understand that unlike US, for countries like China, India, Russia, operator locked phones do not work well (be it even for blackberry), and also people here do think where they spend. Hence Nokia sells more here as it can give you features like full multiplexing, multi-APN browsing, reliabilty (apple does not have much of service network here), and above all freedom to do what they want with THEIR phone.
That's precisely the reason that Blackberry's too have not been much a hit in this market as compared to smartphones of Nokia, Sony Ericsson or Samsung or even LG for that matter.
So the iPhone has tanked, but in fact there's a thriving grey market for them?
What Nick can't bring himself to admit is that the carrier-locked launch has tanked, or at least not done that well, but people are still, annoyingly and contrary to the one true religion of Nick, buying whatever the hell they want, including iPhones...
I'm Chinese, have lived in China for over a decade, and I can tell you that we Chinese have little expendable income. This is exacerbated by our culture's high saving mindset. We have numerous products far superior in specs to the iPhone, with specs that actually are more suited to life in China, such as dual/tri simcard capabilities. Locally made phones are cheap, stylish (as they just copy good designs), and simply better.
As it stands, very few phones can break the Chinese market, let alone a gimmicky overpriced hunk of junk.
Im an American living in Vietnam, traveled to China manytimes and @KS I have seen and used these chinese phones your refer to as "cheap, stylish (as they just copy good designs), and simply better" You are right they are cheap, but definitely nowhere in the same class as the IPhone! After using these pieces of junk phones I can understand why IPhone is not doing so well. Most chinese dont understand a good design when they see it, let alone how to use it. They are so use to sub-par products that its no wonder the iphone sales was lackluster. Actually here in Vietnam the IPhone is the envy of most mobile phone users.
The only sure thing is when it came to past, the rest being drum beating. Nearer than guessing is pheramone scenting but for the "affluent" and the "desperately seeking association" Chinese, Apple's Emperor's New Clothers are transparently naked. Playing the numbers game where numbers are so common is two-a-penny. Spreading the word is no match for being spread on the money rack and there are only that many trillioniares on the sniffing trail. In the "West", worshippers are more sophisticated because they loved to be shackled and whipped, thereby affirming their belief that a saviour is at hand …"and he's sooo rough .. oooh", but "Eastern" worshippers love to do as they please. The are not interested in saviours. They are only interested in whipping others with their new tool. You've got that, geni-asses? Ahh sorr .. honolable stooprid.
I hope that the iPhone does well in China and Russia. Sounds weird, doesn't it? Well, here's why: both of those markets are generally intolerant of DRM/locked products/whatever. In many cases it's a matter of practicality, as internet access can be spotty and popular products aren't always available 'legally', so people figure out ways to deal with software that tries to phone home or media that can't be had through 'official' channels. So by adding that many folks to the Apple herd, Jobs' Mob is going to shoot themselves in the foot with greed and totally lose control of their product.
Come on, everyone knows iphone was gonna tank in China. Their market is dominated by copycat brands and of course the actual copycats. Not to mention the population has not been exposed to the extensive brainwashing marketing campaigns of Apple.
I don't agree with the other poster suggesting that the spending power of chinese has increased to anywhere near western nations. You are the one who has not done enough research and fell into the illusion of the rich china. Together, they have the spending power, but individually most of them really don't have that much money to spend on anything near an iphone.
My wife is Chinese, I'm Canadian. We go to China often, and the family in law lives there.
Phones in China are mostly expensed by the workplace. Also, bribes are a way of life in China. Its like Cuba pre Castro. Everybody bribes their boss and customers. Its expected and you lose your job or customers if you don't. Its not obvious like a bag of cash on the table, its more refined, like an envelope in a pocket during lunch, but its essentially a bribe: cash for unwaranted advantage.
Hence, the guy that buys the cell phones for the office, he's gonna buy from the highest bribe bidder. And my friends, an iPhone there has no competitive edge at all to justify itself if ever the highest bribe bidder peddles iPhones.
Hence, the market is relegated to people that actually pay by themselves their phone are fashion stricken (read dumb) enough to buy a non competitive product for outrageous prices. The n95 is much cheaper there and has more features for example.
The moment the iPhone can compete in the checkboxes contest, and is somewhat in the same pricing range then it will win big since Chinese do know its a high quality product and do like the style and fashion associated with it.
to make any conclusions, it takes time. Let them learn each other a year or so and then we'll see. They will eventually start buying. Chinese, Indians and Russians may be having 5-10 times smaller income but there totally 5-10 times more people, so there are a lot of rich retards who will buy if they know this is fashionable. Didn't you see they buy Mercedeses like hot-dogs and exchange them with new model when ashtray is full (just kidding. Or could be not)?
Spreading of Apple computers though in these countries was a 20 years failure.
Will see...
Oh, by the way i am Russian, and do not like iPhone even for free, it's total POS compared to HTC HD2 or TG1
Slava