China iPhone 4 Launch Leads to Quick Sellout

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Apple’s iPhone 4 launch in China was met with long lines and massive crowds, leading to a quick sellout of the country’s inventory. China’s iPhone 4 launch stands in stark contrast to the country’s iPhone 3GS rollout where it took several days to sell only 5,000 units.

Some shoppers lined up two days ahead of the launch, according to Computerworld. When Beijing’s new Xidan Joy City Apple Store opened its doors, over 1,000 people were lined up with hopes of being among the first to get their hands on Apple’s latest combination iPod and smartphone.

Excited crowds at China’s iPhone 4 Launch

“It’s like waiting in line to see a movie star,” commented Sun Jian Kuan, who was waiting in line for his iPhone 4.

China Unicom was hit with more than 200,000 iPhone 4 pre-orders by the time the handset went on sale, and the carrier said it processed over 40,000 activations on launch day.

The country’s inventory didn’t, however, last for long. Demand quickly outpaced supply, leaving Apple and China Unicom promising to get more units on store shelves as quickly as possible, according to the Wall Street Journal.

Apple isn’t saying how quickly it can get more iPhones into its China stores.

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Google’s attempt to force installation its search and other services on Android devices in China by both restricting Android with contractual and licensing provisions, while open-sourcing its code, as was probably mandated as a result of Android’s Linux kernel, has utterly failed in China, as Chinese Telcos and OEMs have branched Android and are making their own devices and installing Chinese services.  A variant of Android may be thriving in China, but Google isn’t.

Apple, on the other hand, is faced with another country, now China, were its iOS devices are selling so fast that it can’t make enough of them to keep up with demand.

What will Google do, if the European telcos follow China and now Verizon’s example?  Baidu and Bing on Android is a bitter and poisonous pill for Google to swallow.

Constable Odo

Google doesn’t seem to be making much money from Android, so far.  So why are the analysts and pundits always crowing about Android market share.  The smartphone sector is a business and it should be making money for Google, but isn’t.  Android is a broken business model, so why are analysts so generous about Android being such a great thing for Google.

These consumers in China are buying genuine iPhones and the revenue is going directly into Apple’s pockets which seems like an excellent business model.  This doesn’t happen to even one Android smartphone that is sold.  If the carriers and vendors of Android devices in China have their own way, they’ll be almost nothing left of the original Android OS that has something to do with Google.  They may even opt out of the Android Market completely.  How will that work out for U.S. Android app developers?

Bryan Chaffin

I wonder just how much the new flagship Apple Stores have helped raise Apple’s profile in China.


Well, Bryan, Phil Schiller and Steve Jobs know what effect Apple’s new stores in China are having on Apple’s brand, but I doubt that we will be told anything until some press event or product introduction or until some stock analyst graces us with his data.  Or you could send Jeff to Shanghai and/or Beijing to have a look.


Constable Odo:  The idea was never to make money on the licensing of Android but to make money from the ad revenue derived from Google’s services, such as search, and to collect valuable information from users, as Google does now in the U.S.  But where, as in China, there are no Google services on an Android phone, Google makes nothing on its marginal investment in Android for that particular phone.  Since, in China, Android phone are sold pretty much without any of Google’s services, Android is a complete loss for Google in China. 

But even more worrisome is that other are emulating the Chinese.  The new Samsung/Verizon fascinate is an Android phone but you would never know that from Verizon’s commercials for the Fascinate, and the Fascinate uses Bing as its default search engine in lieu of Google.  The European telcos have had or will have a meeting to discuss developing a proprietary OS from a phone that they would all share.  Though they have other options, the most likely option is to branch Android, as the Chinese have done, and either place third party services on those phones from which they will earn revenue or make Google pay through the nose to place its services on them. 

Things are getting out of hand for Google with Android.  Neither telcos or government can be bound by the methods that Google uses in an attempt to force OEMs to place Google’s services on Android phone, and for that matter, neither can certain OEMs be so bound, provided that they, like the telcos, have the financial and technical resources to forgo Goolge’s Android road map and updates, the MarketPlace, Google’s services, and the Android trademarks.  And many telcos and OEMs are choosing to do exactly that, because they benefit from having their own proprietary and differentiated Android device and are disadvantaged by selling a fungible device with a vanilla version of Android.

Bryan Chaffin

? Or you could send Jeff to Shanghai and/or Beijing to have a look.

Or me. I had Chinese food today for lunch. It should clearly be me I send…


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