Current China based iPhone/iPod Touch owners can now easily purchase apps through the App Store and provide the revenue stream to Apple and the developers of apps.

http://www.apple.com/support/itunes/ww/ provides a list of countries the App Store is operating and China is one. Of course the estimated 1 million to 1.5 million iPhone units in the country are served as well as the many iPod Touches (all of which have Wi-Fi capability).

While there will be an official carrier at some point, the attempt by the bureaucracy or the three carriers simply discredits themselves and delays the Apple deal. But that just allows more time for the grey market to keep operating between the cracks and supplying those who want to get one without having to travel to Hong Kong to buy one (or ten). The carriers know it from their traffic analysis and Apple can make some pretty good guesses. Meanwhile Apple gets paid fully for the iPhone and app revenue comes in as they are bought.

More customers/revenue would come in if a carrier relationship was set up on the same basis as other carriers around the world. But right now they are still satisfying China customers. And everyone in urban areas have long know about the grey market goods because that has been China’s recent history.

Where artificial barriers to goods are erected the Chinese will always find a way around them and the effort has not stopped the adoption of the iPhone by China users.

Nor the iPod Touch.

The authorities and carriers have only made them jump through another hoop to get the unit. Buying the apps is the easy part.

Meanwhile all three mainland carriers have had more time to try to setup their own App Stores in their delaying efforts. Don’t expect them to hit great successes comparable to the 1 billion downloaded apps the App Store has accomplished anytime soon.

Apple doesn’t believe the nonsense that is no doubt fed to them by the telecommunication carriers as they try to convince them to give up control and revenue to them because the China market is different. And they have acted in a very suitable way that every Hong Kong and Taiwan trader would have done, that is, grey market imports.

Do note even in those countries with operating iTunes AppStores you can always use another countries App Store if you set up the account in that country’s app store. While that may require an address in that country and obtaining a gift card as well (if you don’t have a credit card) it can still be done easily enough. Some Indians have stated so on podcasts last year that it is their preferred method to use a US address and make purchases through the US store. Getting someone to buy an iTunes Gift certificate in the US is very easy for them.

Finally, the China market is over-rated in the US media coverage and in business circles. Apple has probably realized this and is playing it very smart so far. And they have been playing it on their terms and in low profile. Those customers who see the difference in their products and who want a Mac, iPhone or iPod have always been able to get them one way or another. The former two products are expensive given disposable income levels for most in the country and simply large numbers of people will never provide enough disposable income to reason for some of the efforts others have called for in the past. Whatever Apple does in China it should foremost do profitably and in their interests. They have already done that in those China communities in Hong Kong, Macau and Taiwan without the type of interference and delays they are receiving in China. Why? It is a standard operating pattern attempted by officials in China and seen many times in the last two decades. The promise of a large consumer market diminishes when the consumers do an end round the gatekeeper preventing them from enjoying the latest products they have read about and want. Keep selling in Hong Kong and Macau and not be concerned that they end up in another place nearby.

artman1033 - 13 July 2009 09:41 PM

There may never be an official “China launch”. Everyone who can AFFORD an iphone in MAINLAND China may already have or saving up to get one from Hong Kong where they can buy a LEGAL, unlocked, no sim card, GENUINE IPHONE

Very true. In fact, I have one of those with me right now iPhones can already be purchased at virtually every electronics shopping center in major cities, and a lot of Chinese have already purchased their iPhones.

The only drawback is that the networks currently offer limited data plans, so things like on-the-go internet, google maps, email, etc. don’t really work without a WiFi connection.

If Apple does officially release iphones without WiFi capabilities, I can imagine many consumers sticking with black-market iPhones and using them on the new 3G networks.