A negative article in this mornings Asia WSJ suggests that the iPhone won’t sell well in China due to the high price.  High Price for iPhone in China is the headline.

Apple Inc. is a master at creating buzz around its product launches. But as the popular iPhone approaches its official debut in China—the world’s largest mobile-phone market—consumers here seem anything but excited.

The device goes on sale in China Friday.  The buzz-killer is price. China Unicom (Hong Kong) Ltd., which will start selling the device Friday, is offering a version of the 32-gigabyte iPhone 3GS for 6,999 yuan ($1,024) without a service contract, which is the most popular way for people to purchase phones in mainland China. That compares with about the $800 consumers pay for the same product in nearby Hong Kong, which has different wireless carriers. [...]

Apple doesn’t “need” China to sell iPhones and IMHO all units sold on the mainland this quarter through a sanctioned carrier are the proverbial icing on the cake.

Besides, do you really think the carrier would bring the product to market if it didn’t expect to sell phone?

FUD is FUD. 

capablanca - 29 October 2009 11:05 PM

A negative article in this mornings Asia WSJ suggests that the iPhone won’t sell well in China due to the high price.  High Price for iPhone in China is the headline.

... China Unicom (Hong Kong) Ltd., which will start selling the device Friday, is offering a version of the 32-gigabyte iPhone 3GS for 6,999 yuan ($1,024) without a service contract ...

Price with a service contract?

Mace - 30 October 2009 12:06 AM

Price with a service contract?

see this spreadsheet- http://spreadsheets.google.com/ccc?key=0Asg3zR2otVsOdG41MDdaTkcycXQ4cll1OWN6WDRjZmc&hl=en

It has the pricing for different plans.

Hundreds line up

be careful if the following gets traction in the media

http://www.mobilecrunch.com/2009/10/30/the-iphone-launches-in-china-today-seems-to-arouse-little-interest-pictures-from-beijing/

SNIPUS - 30 October 2009 06:59 AM

be careful if the following gets traction in the media

http://www.mobilecrunch.com/2009/10/30/the-iphone-launches-in-china-today-seems-to-arouse-little-interest-pictures-from-beijing/

Mike Arrington is really down on apple at the moment. He is the head publisher at that site. He is also working on a tablet that was to have been released last August.

For further information on how neutral tech crunch is with its Apple reporting it looks like Roughly Drafted is riffing on the same subject this morning.

Roughly Drafted Article here.

iPhones aren’t going to fly off of the shelves in China but I bet they sell a few—just like Cadillac and Buick sell a few cars over there.

The press is focused on the unlocked price, but just as important is the price and guarantee provided by China Unicom.  If you believe the numbers Apple got a 5M unit guarantee from China Unicom over three years, while this may seem small to the likes of Tech Crunch & WSJ the reality is the carrier buys the phone and then sells to the end user.  If China Unicom cannot price it competitively then they will still be liable for the contract guarantee to Apple.  Apple has not bet the company on entering China so all the sales are gravy. This is a long term play in the developing world.  Since Apple has entered other BRIC countries with similar issues I suspect they have a pretty good idea of the market they are facing.

pats - 30 October 2009 09:17 AM

The press is focused on the unlocked price, but just as important is the price and guarantee provided by China Unicom.  If you believe the numbers Apple got a 5M unit guarantee from China Unicom over three years, while this may seem small to the likes of Tech Crunch & WSJ the reality is the carrier buys the phone and then sells to the end user.  If China Unicom cannot price it competitively then they will still be liable for the contract guarantee to Apple.  Apple has not bet the company on entering China so all the sales are gravy. This is a long term play in the developing world.  Since Apple has entered other BRIC countries with similar issues I suspect they have a pretty good idea of the market they are facing.

Thank you. 

That’s very well said.

Eric Landstrom - 30 October 2009 09:10 AM

iPhones aren’t going to fly off of the shelves in China but I bet they sell a few—just like Cadillac and Buick sell a few cars over there.

All things in perspective. In China a few is a lot considering the size of the economy and population. I don’t expect immediate big number sales, but enough to fill the channel of over 1,000 points of purchase. The mainland has been fed by gray market imports through Hong Kong. But sales through an authorized carrier will boost sales activity.

China is a long-term proposition. I cautioned before and at the time of the announcement of a China deal not to expect huge sales number based on the size of the population. There’s a fast-growing middle class in the country but building a product relationship will take time.

rattyuk - 30 October 2009 07:57 AM

SNIPUS - 30 October 2009 06:59 AM

be careful if the following gets traction in the media

http://www.mobilecrunch.com/2009/10/30/the-iphone-launches-in-china-today-seems-to-arouse-little-interest-pictures-from-beijing/

Mike Arrington is really down on apple at the moment. He is the head publisher at that site. He is also working on a tablet that was to have been released last August.

For further information on how neutral tech crunch is with its Apple reporting it looks like Roughly Drafted is riffing on the same subject this morning.

Roughly Drafted Article here.

First, Serkan Toto wrote the article and got his information from 163.com. Second, Mike Arrington is an Apple fan who happens to dislike Apple’s App Store policies and has taken a stand against them. Third TechCrunch openly admits their writer’s biases unlike other commentors who try to cover up their writers’ biases.

Oh, and that roughly drafted piece is utter bs. Dilger goes on about how Android 2.0 won’t run on the G1 because it doesn’t have enough RAM (something that was said about 1.5 and 1.6 and yet both are on the G1) like he actually knows anything about embeded system programming. Apparently he’s unaware of small things like compression and file optimization.

daemon - 30 October 2009 10:40 AM

First, Serkan Toto wrote the article and got his information from 163.com. Second, Mike Arrington is an Apple fan who happens to dislike Apple’s App Store policies and has taken a stand against them. Third TechCrunch openly admits their writer’s biases unlike other commentors who try to cover up their writers’ biases.

Oh, and that roughly drafted piece is utter bs. Dilger goes on about how Android 2.0 won’t run on the G1 because it doesn’t have enough RAM (something that was said about 1.5 and 1.6 and yet both are on the G1) like he actually knows anything about embeded system programming. Apparently he’s unaware of small things like compression and file optimization.

Tech Crunch at the moment have a vested interest in gunning for Apple. Mike Arrington has been raving about his crunch pad that was to be released last august. That didn’t happen but he would sure like it out of the way of any Apple tablet device that may be released.

rattyuk - 30 October 2009 11:16 AM

daemon - 30 October 2009 10:40 AM

First, Serkan Toto wrote the article and got his information from 163.com. Second, Mike Arrington is an Apple fan who happens to dislike Apple’s App Store policies and has taken a stand against them. Third TechCrunch openly admits their writer’s biases unlike other commentors who try to cover up their writers’ biases.

Oh, and that roughly drafted piece is utter bs. Dilger goes on about how Android 2.0 won’t run on the G1 because it doesn’t have enough RAM (something that was said about 1.5 and 1.6 and yet both are on the G1) like he actually knows anything about embeded system programming. Apparently he’s unaware of small things like compression and file optimization.

Tech Crunch at the moment have a vested interest in gunning for Apple. Mike Arrington has been raving about his crunch pad that was to be released last august. That didn’t happen but he would sure like it out of the way of any Apple tablet device that may be released.

Rattyuk,

The last thing I read from Mike Arrington about the crunch pad coming to market was that it wasn’t. And it had nothing to do with the nonexistent Apple Tablet, and everything to do with the fact that it is next to impossible to build the device in the United States econnomically and next to impossible to get a well made device from Chinese manufacturers if your order size was under 100,000 units.

I just returned from a 2 week business trip to China. This was my first trip since being in Hong Kong in 1989 while in the Navy, and my first real trip to the mainland. I took my original 4 GB iPhone with me. On it, I had loaded the free KT Dict English-Chinese dictionary app, and enabled the international keyboard for Chinese. The app was very handy, as I was able to get useful phrases by inputting a noun or verb in English. It was also handy, as my Chinese business contacts were able to input characters by drawing on the screen, and choosing the character they needed.

I did have one contact who was very interested in having both a Mac and an iPhone. He did express reservation about the cost of the phone, so perhaps the next time I travel there, I’ll have to bring a used one purchased from ebay. He also told me that when he was ready to replace his laptop, that his next computer would be a Mac. This particular contact is a bit younger than most of the others, (30’s?) and definitely more technologically savvy, so he’s up on the world of computers.

I disabled international roaming on the phone, so I didn’t get large data roaming fees. I also did not make any calls from the phone, as I used international service on Skype to call both land and mobile numbers in the States. (An excellent solution I might add.) I did have my phone out a lot, and noticed that I nearly always had 5 bars of service, and most of the time could also choose from at least two carriers. China Mobile has lots of storefronts in the 8 different cities I was in. Didn’t see as many China Unicom. I saw advertising for 3G service on signs EVERYWHERE. Literally…. I saw hundreds of signs for 3G.

I spent one day in Hong Kong on the way home, and did a little wandering around. Stumbled on at least 4 authorized Apple dealers, carrying both iPhones and Macs. Also saw numerous electronics shops that had iPhones and iPods in the window or on the shelf. In talking to the authorized shops, their story was consistent in that none of them had iPhones available. It appears that the warehouse in HK didn’t have any left. The standard answer I received when inquiring about iPhones, was that I could receive it faster if I ordered it on the web. All of the stores would sell out of phones within one day, if and when they came in, about 40 to 50 every two to four weeks. It seems as soon as the shelves fill, other stores come in and buy them all, and then mark up the price to resell them. The street markup tended to be about HK$200 (~US$30).

After seeing what I saw, I’d have to say that even a small presence in China will account for a lot of phones. I’m sure the price will be an issue to start, but believe me, the demand is there. I saw an ad on television for the MyPhone that ran maybe two minutes. The MyPhone is a knockoff that looks almost exactly like an iPhone, and the television ad used many of the same photos and other images that the real iPhone has in it’s advertising. If Apple can keep a handle on it’s intellectual property that will be good.

daemon - 30 October 2009 12:05 PM

The last thing I read from Mike Arrington about the crunch pad coming to market was that it wasn’t. And it had nothing to do with the nonexistent Apple Tablet, and everything to do with the fact that it is next to impossible to build the device in the United States econnomically and next to impossible to get a well made device from Chinese manufacturers if your order size was under 100,000 units.

He got a lot of press for it and there was even an unboxing but it should have been pretty obvious that a technology like that was going to cost a lot to bring to market. Designing and building prototypes is one thing releasing hardware en-masse is another thing altogether.

A more pressing point about the iPhone in China was that they insisted that Apple remove the wi-fi to conform to local chinese laws on handheld devices (or maybe the carriers own rules) BUT then changed the rules after Apple had started to mass-produce the product. Seems awfully mean spirited on someone’s part.