iPhone sales flop in China?
Quote:
IPhone Gets Lukewarm Reception in China
By LORETTA CHAO
BEIJING—Apple Inc.'s iPhone got a lukewarm welcome in its official Chinese debut, with a boisterous crowd turning out for a launch party in the capital but no sign of the sort of sellout reception that greeted the smart phone at its introduction in other countries.
Hundreds of people braved cold and rain to attend a Friday night party thrown by China Unicom (Hong Kong) Ltd., the state-owned carrier selling the iPhone, at a Beijing shopping center. Still, the crowd seemed subdued compared with the thousands who turned up at stores when the iPhone was introduced in markets such as the U.S. and Japan, where it quickly sold out in many locations. As of Sunday night, stores around Beijing still had the iPhone in stock.
Apple and China Unicom, which is the only authorized Chinese carrier selling the iPhone, declined to disclose sales figures.
The iPhone's performance in China, where the 710 million mobile-phone subscribers are the most in any nation, is potentially important for Apple, which has a relatively meager presence in the fast-growing market.
Analysts have said that the Unicom iPhone's debut in China faces several challenges. Many potential customers have already bought iPhones from unauthorized sellers or brought in the phone from Hong Kong or other countries, putting an estimated two million iPhones already in use in China, according to research firm BDA China Ltd. Apple and Unicom charge $730 to $1,020 for the iPhone, not including discounts on service, making it more expensive than gray-market iPhones in China and legitimate iPhones in many other markets. And an important feature, Wi-Fi Internet service, has been disabled on Unicom's iPhones to comply with Chinese government rules.
Some people in the crowd at the Unicom party Friday night were unfazed by those issues. "The price is a little high, but we don't care," said a woman who stood in line for more than an hour to buy a 16-gigabyte iPhone. Her boyfriend stood next to her shivering from the cold. Other people said they were buying Unicom's iPhone in spite of its price because they worried that less-expensive, gray-market iPhones would have quality problems.
At the Apple store in Beijing, the company's only location in China, the crowd seemed less enthusiastic. Employees cheered anyone who came in with chants of "iPhone! iPhone!" But there were no lines for the stacks of new iPhones.
"There's no reason to be charging these prices if it doesn't have Wi-Fi," said Peter Yu, who bought his black iPhone in Australia and uses Unicom's high-speed third-generation service.
A manager at a China Unicom store in Beijing said Sunday that his store sold ten iPhones on Saturday but only one on Sunday. He said he expects sales to pick up during the week.
Li Haiwei, owner of a mobile-phone store in Beijing that resells iPhones from outside China for $440 to $840 on the gray market, said he thinks the iPhone's official launch will help his business as consumers attracted to the phone by the publicity but repelled by the high price will come to stores like his. "I think gray-market iPhones will sell even better in the future," said Mr. Li, who sells four to five iPhones a day and expects to continue selling at least that many.
—Kersten Zhang contributed to this article.
IPhone Gets Lukewarm Reception in China
By LORETTA CHAO
BEIJING—Apple Inc.'s iPhone got a lukewarm welcome in its official Chinese debut, with a boisterous crowd turning out for a launch party in the capital but no sign of the sort of sellout reception that greeted the smart phone at its introduction in other countries.
Hundreds of people braved cold and rain to attend a Friday night party thrown by China Unicom (Hong Kong) Ltd., the state-owned carrier selling the iPhone, at a Beijing shopping center. Still, the crowd seemed subdued compared with the thousands who turned up at stores when the iPhone was introduced in markets such as the U.S. and Japan, where it quickly sold out in many locations. As of Sunday night, stores around Beijing still had the iPhone in stock.
Apple and China Unicom, which is the only authorized Chinese carrier selling the iPhone, declined to disclose sales figures.
The iPhone's performance in China, where the 710 million mobile-phone subscribers are the most in any nation, is potentially important for Apple, which has a relatively meager presence in the fast-growing market.
Analysts have said that the Unicom iPhone's debut in China faces several challenges. Many potential customers have already bought iPhones from unauthorized sellers or brought in the phone from Hong Kong or other countries, putting an estimated two million iPhones already in use in China, according to research firm BDA China Ltd. Apple and Unicom charge $730 to $1,020 for the iPhone, not including discounts on service, making it more expensive than gray-market iPhones in China and legitimate iPhones in many other markets. And an important feature, Wi-Fi Internet service, has been disabled on Unicom's iPhones to comply with Chinese government rules.
Some people in the crowd at the Unicom party Friday night were unfazed by those issues. "The price is a little high, but we don't care," said a woman who stood in line for more than an hour to buy a 16-gigabyte iPhone. Her boyfriend stood next to her shivering from the cold. Other people said they were buying Unicom's iPhone in spite of its price because they worried that less-expensive, gray-market iPhones would have quality problems.
At the Apple store in Beijing, the company's only location in China, the crowd seemed less enthusiastic. Employees cheered anyone who came in with chants of "iPhone! iPhone!" But there were no lines for the stacks of new iPhones.
"There's no reason to be charging these prices if it doesn't have Wi-Fi," said Peter Yu, who bought his black iPhone in Australia and uses Unicom's high-speed third-generation service.
A manager at a China Unicom store in Beijing said Sunday that his store sold ten iPhones on Saturday but only one on Sunday. He said he expects sales to pick up during the week.
Li Haiwei, owner of a mobile-phone store in Beijing that resells iPhones from outside China for $440 to $840 on the gray market, said he thinks the iPhone's official launch will help his business as consumers attracted to the phone by the publicity but repelled by the high price will come to stores like his. "I think gray-market iPhones will sell even better in the future," said Mr. Li, who sells four to five iPhones a day and expects to continue selling at least that many.
—Kersten Zhang contributed to this article.
http://online.wsj.com/article/SB1000...googlenews_wsj
Here's to more government control in free markets!
Comments
I'll believe the reports on iPhone and China Unicom after it's had a chance to find some kind of equilibrium in the Chinese market. For now, I believe this is the kind of story pushed by stock market manipulators to knock AAPL down (so "they" can buy more, of course!).
The iPhone is off to a really bad start when Apple/Unicom charge $730 to $1,020 (no wifi) vs $440 to $840 with wifi on the grey imports. The Wall Street Journal would lose a lot of reputation if they did this story deliberately to manipulate the stock.
Good to be a skeptic though
I don't think Apple wants a lot sales of the hobbled iPhone, they have enough problems with the carriers they have, not to have one that is manipulated by the government and could force Apple to comply with some new control scheme.
So now that Apple has iPhone it can sell, it can advertise and people who know can get it through their local business person for a better price, like much everything else in China is done.
I wonder if the Chinese government will force Apple to control or hobble the grey market phones?