Comments on: Apple Has Sold 30,000 iPhones So Far in China

By: iPhone to Be China’s Top-Selling Smartphone? Really?

iPhone to Be China’s Top-Selling Smartphone? Really? — Tue, 17 Nov 2009 01:01:38 +0000

[...] prospects in China — despite widespread conviction that it’s too expensive there. As Stacey recently noted, Daniel Amir, director and senior research analyst of semiconductors at Lazard Capital Markets, has [...]

By: Brian McTavish

Brian McTavish — Sat, 14 Nov 2009 21:21:09 +0000

Of course, Apple is going to sit back and ignore poor sales in the BRIC countries. Not. It’s a much more sharply managed company now than in the past, and while I’m not claiming it will definitely succeed, I reckon they are working at their sweet own pace to a well-thought-through strategy.
It’s obvious they’ll follow the iPod model: progressive price reductions in line with falling component prices, sunken development costs and increasing economies of scale; and timely bifurcation of the product line when it makes sense, to defend against the cheaper copyists.
The strategy hinges on first establishing and maintaining technological (that’s principally best-of-breed usability, not ‘fastest graphics chip’or whatever the nerds latest lust is) leadership, and sustaining that through consistently above-sector-average R&D investment, which itself requires and is reinforced by the bigger returns available for top-end devices. If they consequently come to dominate any given market (e.g. the iPod) all well and good, but they are not seeking market share at any price; they’re happy to leave the suicidal race-to-the-bottom price wars to others. Hence, because they are less affluent places, Apple well not end up with the majority of the Chinese or Indian smartphone market: but that won’t trouble them, since they’ll end up with a significant slice, *making the healthiest margins* in those markets.
Think about it – despite selling way less phones (which they may always do), Apple just overtook Nokia as the most profitable mobile phone vendor.

By: Martin Hill

Martin Hill — Sat, 14 Nov 2009 03:43:56 +0000

@Tk
The meme that the iPhone is not doing well in Japan was proved to be a myth back in July when two iPhone models topped the list of most popular cellphones (not just smartphones) in Japan:

“the iPhone 3G 8GB, sold by Softbank, easily came in at number one. Second in line was the 16GB iPhone, while the NTT CoCoMo Aquos SH-04A came in at number three.” The iPhone’s popularity has continued at a similar level since then.

The iPhone hate in Japan story was promulgated by Brian X Chen in a Wired story based on mis-reporting Nobi Hayashi, a journalist in Japan who has frequently written on the smartphone market.

http://www.appleinsider.com/articles/09/02/28/japanese_hate_for_iphone_all_a_big_mistake.html

-Mart

By: Tk

Tk — Fri, 13 Nov 2009 18:35:56 +0000

The iPhone seems to have done poorly in the BRIC countries. Not sure about Brazil, but at least in India and Russia sales were far below expectations. Sales have been somewhat lukewarm in Japan too. That doesn’t bode well for future growth. The iPhone seems to do well in countries with a western culture/mindset. Perhaps the way the UI is designed appeals particularly to that demographic.

By: KenC

KenC — Fri, 13 Nov 2009 18:05:48 +0000

Why did Apple wait? One, they have to negotiate an agreement with one of the Chinese mobile carriers. Two, those carriers, all quasi-state-owned, were reorganized from 5 down to 3 over the past Summer. Three, those carriers were given official 3G licenses only after the reorganization this Summer. Four, until those licenses were issued, noone knew which carrier would get which 3G technology. For example, China Mobile got China’s homegrown standard of TD-SCDMA, while China Unicom got GSM the one the iPhone uses. Fifth, there was movement afoot that the ban on WIFI in a cellphone was to be lifted.

For all of these reasons, and plenty of others, the deal to launch the iPhone in China was delayed. All pretty much structural reasons not related to Apple at all. It’d be all well and good to sign a deal with China Mobile, only to find that China Mobile got the license to use a 3G tech incompatible with the iPhone, right?

By: Constable Odo

Constable Odo — Fri, 13 Nov 2009 16:45:18 +0000

30,000 on top of the possible 2 million gray-market iPhones isn’t terrible. Maybe the iPhone will just take time to gain traction as it has in Japan. I think it’s too early to write off the iPhone as a failure like India and Russia. No doubt Android-powered handsets will take China by storm due to their lower cost and varied suppliers. That new Dell smartphone looks like an easy winner for China Mobile It seems ideal for the low-salaried Chinese user.

By: Jason Lackey

Jason Lackey — Fri, 13 Nov 2009 16:41:59 +0000

While sales through official channels have been somewhat lackluster, it is likely that there are up to 3.5 million grey market iPhones floating around the Middle Kingdom.

As to why Apple would have decided to wait this long to do an official launch in such a growing market is a bit of a mystery to me, but I suppose they found the Chinese operators to be onerous to deal with and decided to let the grey market cope with demand for the first couple years.

So, while some will be happy to hold forth on how the iPhone launch was a failure in China, I think that it has actually already been a success, but, like many other things, the official and the reality on the ground are sometimes different.