China in Apple’s Future

  • Posted: 23 January 2011 06:13 PM

    Ironically, because the phones are manufactured on mainland China, Apple can’t make iPhones fast enough to meet the country’s demand. Ticonderoga Securities’ Brian White, back from a recent tour, reported in December that the iPhone 4 had been sold out for two months. He estimated that China Unicom (CHU) was unable to fulfill about a third of its orders.

    http://tech.fortune.cnn.com/2011/01/22/chinas-love-affair-with-apple/

    Satisfying that backlog for GSM iPhones represents a 50% increase in units sold.

    In that environment, would Apple actually introduce a CDMA model?

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  • Posted: 23 January 2011 06:18 PM #1

    Solution.

    Apple cut a deal to make iPhones in Nokia’s factories since they are making junk anyway.  Nokia can keep their factories, let them worry about sunk costs, depreciation, worker suicides, ad infinitum. Apple has the capital to make it go.

    Alas, Nokia is preferring to get honed down by Apple one day at a time.

         
  • Posted: 23 January 2011 06:32 PM #2

    Hell, on second thought, Apple could just buy out Nokia, fire the whole ball of wax sans factory staff, cut a deal with Hon Huever to run it, and catch up with sales that are months out there.

    Turn that huge glass headquarters Nokia has in Finland into an Apple Store. 

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  • Posted: 26 January 2011 10:23 AM #3

    adamthompson3232 - 26 January 2011 01:37 PM

    China Mobile Chairman: Apple Will Support TD-LTE - Report
    Now - DJNF


    BEIJING (Dow Jones)—Apple Inc. (AAPL) has said it will “fully support” the fourth-generation cellular technology TD-LTE, which China Mobile Ltd. (CHL) is promoting, and the companies are still talking about China Mobile possibly offering Apple’s iPhone handset, news portal Sina.com.cn reported Wednesday, citing China Mobile Chairman Wang Jianzhou.
    The report didn’t elaborate on Apple’s stance toward TD-LTE. It cited Wang as saying China Mobile hasn’t signed an agreement with Apple about the iPhone mainly because the phone doesn’t support TD-SCDMA, which is the Chinese third-generation mobile standard used by China Mobile.
    “We hope that in next-generation development, since (Apple) can take CDMA into account, they can also take TD-SCDMA into account,” Wang was quoted as saying.
    Apple this month announced a version of the iPhone compatible with CDMA cellular technology.

    Newspaper website: http://tech.sina.com.cn

    -By China Bureau, Dow Jones Newswires; (8610) 8400-7799; .(JavaScript must be enabled to view this email address)

    China Mobile is big enough to warrant a dedicated version, but it won’t be high on Apple’s list of priorities since they already can’t meet demand.
    I remember reading about 3 weeks ago reading in the news that China Mobile also started selling iPhones in their stores, despite the fact the iPhone can only run 2.5G (GPRS) on its network. This led to China Unicom running TV ads saying you should buy the iPhone on the network that can offer you 3G speeds.
    And with the government further pushing for unilateral number porting (China Mobile subs can take their numbers and go to China Unicom / Telecom, but not vice versa), China Mobile is in serious pressure to protect its premium subscribers.

         
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    Posted: 26 January 2011 06:41 PM #4

    bayjinger - 26 January 2011 02:23 PM
    adamthompson3232 - 26 January 2011 01:37 PM

    China Mobile Chairman: Apple Will Support TD-LTE - Report
    Now - DJNF


    BEIJING (Dow Jones)—Apple Inc. (AAPL) has said it will “fully support” the fourth-generation cellular technology TD-LTE, which China Mobile Ltd. (CHL) is promoting, and the companies are still talking about China Mobile possibly offering Apple’s iPhone handset, news portal Sina.com.cn reported Wednesday, citing China Mobile Chairman Wang Jianzhou.
    The report didn’t elaborate on Apple’s stance toward TD-LTE. It cited Wang as saying China Mobile hasn’t signed an agreement with Apple about the iPhone mainly because the phone doesn’t support TD-SCDMA, which is the Chinese third-generation mobile standard used by China Mobile.
    “We hope that in next-generation development, since (Apple) can take CDMA into account, they can also take TD-SCDMA into account,” Wang was quoted as saying.
    Apple this month announced a version of the iPhone compatible with CDMA cellular technology.

    Newspaper website: http://tech.sina.com.cn

    -By China Bureau, Dow Jones Newswires; (8610) 8400-7799; .(JavaScript must be enabled to view this email address)

    China Mobile is big enough to warrant a dedicated version, but it won’t be high on Apple’s list of priorities since they already can’t meet demand.
    I remember reading about 3 weeks ago reading in the news that China Mobile also started selling iPhones in their stores, despite the fact the iPhone can only run 2.5G (GPRS) on its network. This led to China Unicom running TV ads saying you should buy the iPhone on the network that can offer you 3G speeds.
    And with the government further pushing for unilateral number porting (China Mobile subs can take their numbers and go to China Unicom / Telecom, but not vice versa), China Mobile is in serious pressure to protect its premium subscribers.

    I have to disagree.  Tim Cook at the last CC said China was highest priority of the BRIC, and you can bet they will enter the market.  The question becomes when.  To date Apple relied on a single vendor for baseband chipsets, Infineon which was recently bought by Intel, they now most likely added Qualcomm, since Infineon doesn’t sell CDMA base bands.  I would bet China Mobile TD LTE will be supported in the 2012 baseband.

         
  • Posted: 26 January 2011 07:14 PM #5

    pats - 26 January 2011 10:41 PM
    bayjinger - 26 January 2011 02:23 PM
    adamthompson3232 - 26 January 2011 01:37 PM

    China Mobile Chairman: Apple Will Support TD-LTE - Report
    Now - DJNF


    BEIJING (Dow Jones)—Apple Inc. (AAPL) has said it will “fully support” the fourth-generation cellular technology TD-LTE, which China Mobile Ltd. (CHL) is promoting, and the companies are still talking about China Mobile possibly offering Apple’s iPhone handset, news portal Sina.com.cn reported Wednesday, citing China Mobile Chairman Wang Jianzhou.
    The report didn’t elaborate on Apple’s stance toward TD-LTE. It cited Wang as saying China Mobile hasn’t signed an agreement with Apple about the iPhone mainly because the phone doesn’t support TD-SCDMA, which is the Chinese third-generation mobile standard used by China Mobile.
    “We hope that in next-generation development, since (Apple) can take CDMA into account, they can also take TD-SCDMA into account,” Wang was quoted as saying.
    Apple this month announced a version of the iPhone compatible with CDMA cellular technology.

    Newspaper website: http://tech.sina.com.cn

    -By China Bureau, Dow Jones Newswires; (8610) 8400-7799; .(JavaScript must be enabled to view this email address)

    China Mobile is big enough to warrant a dedicated version, but it won’t be high on Apple’s list of priorities since they already can’t meet demand.
    I remember reading about 3 weeks ago reading in the news that China Mobile also started selling iPhones in their stores, despite the fact the iPhone can only run 2.5G (GPRS) on its network. This led to China Unicom running TV ads saying you should buy the iPhone on the network that can offer you 3G speeds.
    And with the government further pushing for unilateral number porting (China Mobile subs can take their numbers and go to China Unicom / Telecom, but not vice versa), China Mobile is in serious pressure to protect its premium subscribers.

    I have to disagree.  Tim Cook at the last CC said China was highest priority of the BRIC, and you can bet they will enter the market.  The question becomes when.  To date Apple relied on a single vendor for baseband chipsets, Infineon which was recently bought by Intel, they now most likely added Qualcomm, since Infineon doesn’t sell CDMA base bands.  I would bet China Mobile TD LTE will be supported in the 2012 baseband.

    I don’t think we are actually in disagreement, I’m sure Apple will eventually support China Mobile, but like you said it’s a matter of when. The thing to note about China is that 3G adoption is still very low (3G networks only launched a couple of years ago) - like I said in my original post, China Mobile is pushing iPhone on its 2g network, and I know quite a few people who use the iPhone on China Mobile. So therefore as long as 3G penetration is low, Apple is not in a big hurry to launch a dedicated China Mobile 3g version.
    Also, overall the Chinese market is a developing one and consumers are unsophisticated. That’s a big generalization, but the iPhone is definitely a luxury item / status symbol in China still, and many people who use it may never install apps or whatsoever. On the ecosystem front there’s still a lot other things Apple need to crack in China first.
    For example I read a post today about some Chinese consumer complaining how the Chinese app store demands a dual-currency (RMB / dollar) credit card, and many people don’t have that. And let’s not forget credit card adoption overall is still low etc. So can Apple allow people to register without a credit card, and charge up their accounts using cash (purchase charging cards at newspaper stands etc.)?
    I think Apple need to fix these user experience issues first, really localize their service. If Apple has enough local management attention to do this as well as launch a new phone with a new carrier, so much the better, but I’d much rather they take it step by step.

         
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    Posted: 26 January 2011 07:44 PM #6

    Definitely agree.

    Many folks over think pace.  if you look at the rate of growth in China, you realize that for this large market keeping your brand identity is key to long term sustained growth.  Apple the brand will grow in China with the population wealth, providing affordable luxury. As a centrally controlled Govt.  I doubt Apple wants to be excluded by Govt decree, and since China Mobile is basically a Govt own telecom, Apple will deliver a solution to gain access to the rest of the market.  Don’t follow the baseband makers for China, but I’m sure Apple can package a suitable chipset to support the mainland Chinese Govt agenda of promoting their own 3G standard, but Apple is also large enough to try and sway their opinion back to the mainstream standard 3G.

         
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    Posted: 26 January 2011 11:45 PM #7

    Not sure about getting China Mobile to standardize, but I’m just fine with Apple having a perfectly cozy GSM relationship with China Unicom.  Supposedly the subscriber base is considerably bigger than AT&T’s (140 million or so?), so for now, not a bad place to start.

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    Posted: 27 January 2011 12:07 AM #8

    I’d sure like to know!

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    Posted: 28 January 2011 12:12 AM #9

    Apple Retail Stores http://www.ifoapplestore.com/db/2011/01/11/grand-opening-season-kicks-off-several-stores-confirmed/

    The 2011 Apple store grand opening season has officially kicked off with the confirmation of several future international stores, including several in Italy that will open by mid-year. The first quarter of each year is traditionally quiet for new store openings, but tips and other sources provide hints of a busy second half of the year. A previously-unknown new store in Florence (Italy) has been confirmed, along with a second store in Milan (Italy). As first reported by the Apple Lounge, the exact location of both stores is unknown, leading to speculation they?ll be located along a city street and not within a shopping mall. A tipster previously said a store will also open in Bologna (Italy), but again the location isn?t known. In France, a Strasbourg store should open soon (unknown location), while a Lyon store was expected to open by last September. In Germany, a new store in Dresden is on schedule for a May opening. Spain will see its first store in Valencia and a second in Barcelona. A confirmed store in Quebec City (Canada) is also scheduled to open soon (unknown location). The first store in Hong Kong and the third in Shanghai (China) is confirmed, but progress on construction and hiring on both isn?t known. In the world of rumors, Edinburgh (Scotland) and Amsterdam (Netherlands) top the list. Lastly, U.S. stores are confirmed for Berkeley (N. Calif.), and hinted for downtown Seattle (Wash.), Brooklyn (NY), Murray (Utah) and Houston (Tex.).

         
  • Posted: 24 February 2011 06:28 PM #10

    Exchange rate HK$7.75 = US$1

    The article is from the scmp.com’s Business Section.


    Apple not put off store plan by rising rents
    Sandy Li
    Feb 25, 2011  
     
    Hong Kong’s soaring rents have not deterred Apple, the maker of the best selling iPhone and iPad, from plans to open two large stores in the city’s priciest locations at an estimated cost of at least US$40 million.

    The world’s number-one technology company will open its first 15,000sq ft Apple Store at IFC Mall, in Central, by the end of this year, people familiar with the plan said. In the third quarter of next year Apple plans to open a 20,000 sq ft store at Hysan Place, which is under construction.

    Hysan Place, the former Hennessy Centre, is owned by Hysan Development , the largest landlord in Causeway Bay.

    After negotiating for more than a year, Apple signed a 10-year lease with the landlord of upmarket IFC Mall, which has achieved an average rental of HK$250 to HK$300 per sq ft per month.

    IFC Mall was jointly built by Sun Hung Kai Properties, Hong Kong’s largest developer by market value, and Henderson Land Development.

    “Such a long lease is on non-negotiable terms by Apple as it will spend at least US$20 million in decorating its first store in Hong Kong. It needs time to recoup the investment,” people familiar with the plan said.

    Apple’s investment in the second store would probably be higher because it was bigger, they said.

    An Apple spokeswoman confirmed its first Hong Kong store would open later this year, but declined to identify the location.

    “The first Apple Store in Hong Kong will be similar to those in London, Paris and Shanghai,” she said, declining to comment on whether the company planned a second store in the city.

    Hysan and International Finance Centre Management, which handles the management and leasing of the IFC Mall, said they did not comment on individual cases.

    Livian Har, director of retail services at Knight Frank, said there was no shortage of international brands coming to Hong Kong undeterred by rising rents. “A rebound in retail sales has lured more global brands to expand in the city and driven up demand and rental,” she said.

    One example was Gap, the American fashion retailer, which paid HK$5 million to lease 15,000 sq ft at Luk Hoi Tong Building, on Queen’s Road Central, last year.

    In China, Apple’s spokeswoman said the company would open its fifth store in Nanjing Road, Shanghai’s busiest shopping location, this year. Apple has two stores in Beijing and two in Shanghai.

    China has Apple’s highest-grossing stores worldwide less than three years after the company opened its first one in Beijing.

    The company said early last year that it planned to open as many as 25 stores up to the end of 2012 in the world’s most populous nation - a market that Tim Cook, the chief operating officer, called a “top priority”.

    Apple had 323 stores worldwide at the end of the first quarter - 87 of them outside the United States.

         
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    Posted: 25 February 2011 10:51 AM #11

    Artwork and/or photos of Hong Kong buildings http://www.ifoapplestore.com/db/2011/02/25/newspaper-ids-two-hong-kong-store-locations/#more-8347

    Here’s one of the images

    Hong Kong is long overdue.  It has the pizza and skyscrapers that we apes could like to climb.  I sense a movie in the making.

    http://en.wikipedia.org/wiki/List_of_cities_in_China

    The biggest mainland China cities with populations over 1,000,000 as listed by Wikipedia (= does not include Taiwan) :

    Shanghai
    Beijing
    Hong Kong
    Tianjin
    Wuhan
    Guangzhou
    Shenzhen
    Chongqing
    Nanjing
    Harbin
    Chengdu
    Changchun
    Hangzhou
    Jinan
    Dalian
    Taiyuan
    Wuxi
    Jilin
    Fushun
    Fuzhou
    Hefei
    Xuzhou
    Handan
    Luoyang
    Nanning
    Datong
    Hohhot
    Ningbo
    Liuzhou
    Baotou
    Nanchang
    Guiyang
    Urumqi (various spellings)
    Changsha
    Kunming
    Shijazhuang
    Lanzhou
    Xiamen
    Zhengshou
    Qingdao


    Taiwan’s largest cities and districts:
    Taipei
    Kaoshiung
    Taichung
    Tainan
    Chia-yi
    Taoyuan County
    Changhua County
    Hsinchu County

         
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    Posted: 31 March 2011 10:27 PM #12

    adamthompson3232 - 31 March 2011 06:42 PM

    http://blogs.forbes.com/ericjackson/2011/03/31/how-big-could-china-be-for-apple/?partner=yahootix

    I remember Apple cutting this deal to increase it’s retail presence in China.    I’d be curious to see what these stores look like.

    And, remember, Cybermart ? the third party vendor in China has only 34 outlets today in Tier 2 and 3 cities.  Cybermart has committed to building out 500 stores (over an unspecified time period) and they are giving Apple special selling locations within them.

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  • Posted: 01 April 2011 12:00 AM #13

    adamthompson3232 - 31 March 2011 06:42 PM

    http://blogs.forbes.com/ericjackson/2011/03/31/how-big-could-china-be-for-apple/?partner=yahootix

    Nice catch, Adam. 

    I recommend Jackson to anyone who is long AAPL.  His twitter feed contains quite a bit of noise, but his blog posts are usually high quality.

         
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    Posted: 01 April 2011 04:30 AM #14

    I think the the author isn’t giving nearly enough credit to the Apple Online Store for China, and resellers, but otherwise he’s basically on the mark.

    China is a HUGE market for Apple and Steve, Tim and the gang will make the most of their chance.  iPad 2 and iPhone 4/5 coming to China/more carriers will drive up regional growth like no one has ever seen.

    [ Edited: 01 April 2011 04:34 AM by Mav ]

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    Posted: 01 April 2011 11:21 AM #15

    capablanca - 01 April 2011 03:00 AM
    adamthompson3232 - 31 March 2011 06:42 PM

    http://blogs.forbes.com/ericjackson/2011/03/31/how-big-could-china-be-for-apple/?partner=yahootix

    Nice catch, Adam. 

    I recommend Jackson to anyone who is long AAPL.  His twitter feed contains quite a bit of noise, but his blog posts are usually high quality.

    +1