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Apple's China reservation system again cuts down on lines, scalpers for iPhone 5

post #1 of 41
Thread Starter 
As the iPhone 5 went on sale Friday, lines at retail stores were again subdued compared to previous product launches, as Apple's new reservation system prevented excitement from turning into potentially dangerous crowds.

Reacting to concerns over relatively small lines at Apple's retail locations in China on Friday, Gene Munster of Piper Jaffray reminded investors that Apple's reservation system was designed to avoid crowds.

It's the same scenario as a week ago, when the iPad mini debuted in China to few crowds at Apple's stores. That product was also launched with Apple's reservation-only system, which also helps to prevent scalpers from getting their hands on the company's latest devices.

The system was instituted after the iPhone 4S launch in January of this year was disrupted by an unruly crowd in Beijing. The crowd prevented Apple from opening its store in Sanlitun, and the company decided to postpone the launch of the iPhone 4S in Beijing and Shanghai.

A scuffle also occurred in mid-2011 for the launch of the iPad 2 and white iPhone 4, where customers shook a glass door and shattered it at the Sanlitun Apple Store.

China


As of Monday, preorders for the iPhone 5 through carrier China Unicom were at more than 300,000 ahead of the product launch, suggesting that demand was strong. Munster noted Friday that China Unicom saw 200,000 preorders for the iPhone 4S, suggesting demand is even greater for Apple's latest model.

Munster also cited increased distribution as another potential cause for small lines for Friday's launch. He believes that Apple has about two times as many points of sale for the iPhone 5 as it did when the iPhone 4S debuted.

The iPhone 4S only launched on one carrier, while the iPhone 5 is available on two: China Telecom, in addition to China Unicom.

Munster estimates that Apple will sell 45 million iPhones in the December quarter, with between 4 million and 5 million of those coming from China. Piper Jaffray has reiterated its "overweight" rating for AAPL stock, with a price target of $900.
post #2 of 41
I'm confused. Will this raise or lower the stock price¿
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How to enter the Apple logo  on iOS:
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post #3 of 41
Quote:
Originally Posted by AppleInsider View Post

The iPhone 4S only launched on one career, while the iPhone 5 is available on two: China Telecom, in addition to China Unicom.

The Automated Slave needs an editor.  Don't you guys re-read your posts???

post #4 of 41
Originally Posted by antkm1 View Post
The Automated Slave needs an editor.  Don't you guys re-read your posts???

 

I can't seem to save my edits, otherwise I would have fixed that already… Hmm.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #5 of 41

They should create chaos because orderly sale will not hype up the product, and sales suffer.  People needs to feel that they own the one of the few phones around in order for them to get excited.  This was what Jobs understood, and Cook to learn about.  Another thing great about the Apple New Product introduction was that new products were spaced out a few months.  Even everyone wants to contribute their hard earned money to Apple, It is not smart for them to squeeze the last dollar too often from their loyal customer base.  You need them to replenish the piggy bank first before you introduce another new product.  Case in point: iPhone and shortly afterwards iPad mini. 

post #6 of 41
Listen to Munster, he'll tell you how it really is.
post #7 of 41
Why does Apple China store charge $850 for the iPhone? Is this price gouging?
http://store.apple.com/cn/browse/home/shop_iphone/family/iphone5?cid=aos-cn-iphone5-home-herobuy

RMB 5288 = $850

In US iPhone 4 costs $650
post #8 of 41
Quote:
Originally Posted by tzeshan View Post

Why does Apple China store charge $850 for the iPhone? Is this price gouging?
http://store.apple.com/cn/browse/home/shop_iphone/family/iphone5?cid=aos-cn-iphone5-home-herobuy
RMB 5288 = $850
In US iPhone 4 costs $650

it is an import, thus china gov will charge tariff on it. in US, there is sale tax on buying iphone. depending on where you are, for iPhone 5 16g, it is about $700 in US. but i am not sure whether the diff of $150 is solely by tariff. 

post #9 of 41
Quote:
Originally Posted by PhilBoogie View Post

I'm confused. Will this raise or lower the stock price¿

Lower, the analysts who are turning bearish expect long lines for their revenue forecasts.

post #10 of 41
Sell your AAPL now !!! Apple is doomed
post #11 of 41
Quote:
Originally Posted by rsdofny View Post

They should create chaos because orderly sale will not hype up the product, and sales suffer.

 

 

But in the case of China, the chaos was causing riots, fights and potential injury to buyers and store staff. Thus why they want to avoid such chaos anymore. That they are also screwing with the major reseller market in the area is the icing on the cake. 

 

Pity they won't use such a system in the US. NYC and LA in particular are a major area for similar resellers to try to get stock

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply
post #12 of 41
Doom, doom, doom....hear ye now....apple is doomed, only one Chinese lady turned up to buy an iphone5
post #13 of 41
Quote:
Originally Posted by rsdofny View Post

They should create chaos because orderly sale will not hype up the product, and sales suffer.

1) The riots and scalpers don't help the product image. I'm glad Apple finally did something that is working.

2) The iPhone 5 has been out for 3 months now. If you are Chinese and possibly wanted an iPhone you would have wanted it before getting pushed out of line, having to wait 5x as long due to scalpers, and without fear or getting sent to hospital. If you are outside of Chinese and weren't interested in buying it yet I doubt some riots in China will change your mind.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply
post #14 of 41
Quote:
Originally Posted by PhilBoogie View Post

I'm confused. Will this raise or lower the stock price¿

 

Yes.

Proud AAPL stock owner.

 

GOA

Reply

Proud AAPL stock owner.

 

GOA

Reply
post #15 of 41
Quote:
Originally Posted by rsdofny View Post

Another thing great about the Apple New Product introduction was that new products were spaced out a few months. 

This is part of where the reselling came in. When it was six months between the US launch and places like china, scores of folks would just smuggle in phones. Apple is shortening the window to stop that kind of nonsense. They don't want folks paying double and treble the legit cost for a phone etc

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

Reply
post #16 of 41
Quote:
Originally Posted by tzeshan View Post

Why does Apple China store charge $850 for the iPhone? Is this price gouging?
http://store.apple.com/cn/browse/home/shop_iphone/family/iphone5?cid=aos-cn-iphone5-home-herobuy
RMB 5288 = $850
In US iPhone 4 costs $650

I'm not sure you know the meaning of the phrase price gouging.  

post #17 of 41
Other pundits are pouncing on "line-gate" as THE cause of yesterday's sell off. Now I am seeing articles about "Apple's China problem" and what Apple must do to recover from this failure.

My question is do big investors like hedge and pension funds actually take action based upon this kinds of punditry? I hope not. Then there are the rumors that the trading computers are sitting there loaded up with buy transactions the second AAPL reaches $500.
post #18 of 41
Quote:
Originally Posted by lkrupp View Post

Other pundits are pouncing on "line-gate" as THE cause of yesterday's sell off. Now I am seeing articles about "Apple's China problem" and what Apple must do to recover from this failure.

Articles on Apple's struggle to become a market leader in China go back quite awhile. They've not yet been very successful there, relatively speaking, and it's not new news. If you've missed documentation about "Apple's China problem" from months and even years past then you weren't watching.

 

Simply Google "Apple struggles in China". You'll find market news outlining Apples issues there dating all the way back to 2008.


Edited by Gatorguy - 12/15/12 at 6:42am
melior diabolus quem scies
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melior diabolus quem scies
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post #19 of 41
Piper Jaffray has reiterated its "overweight" rating for AAPL stock, with a price target of $900.

I support those who says the truth about AAPL . I hate those who lower their AAPL target price based on nothing . Even a primary school students can say AAPL is bad when they see AAPL dropped that much . I praise those who say the truth that can't be guessed or tell from current situation .
post #20 of 41
Apple is down because all the wealthy investors, not pension and mutual funds, are selling off so they can buy gold due to the upcoming doom next week.
post #21 of 41
Originally Posted by Stourque View Post
Apple is down because all the wealthy investors, not pension and mutual funds, are selling off so they can buy gold due to the upcoming doom next week.

 

THE MAYANS SAW THE FISCAL CLIFF COMING A MILLENNIA AGO. IT IS NOT THE WORLD, BUT APPLE* ITSELF THAT IS DOOMED.

 

*"What about all the other effects of the fiscal cli—" NO JUST APPLE.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #22 of 41

China Mobile is the most popular and best carrier in China by far... China Unicom is a light year distant second...

 

and yet, Apple has yet to fully cooperate with them.

mmmmmmmmmmmm....

Reply

mmmmmmmmmmmm....

Reply
post #23 of 41
Originally Posted by Wok Toss View Post
…and yet, Apple has yet to fully cooperate with them.

 

The other way around.

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply

Originally Posted by Slurpy

There's just a TINY chance that Apple will also be able to figure out payments. Oh wait, they did already… …and you’re already f*ed.

 

Reply
post #24 of 41
Quote:
Originally Posted by Wok Toss View Post

China Mobile is the most popular and best carrier in China by far... China Unicom is a light year distant second...

 

and yet, Apple has yet to fully cooperate with them.

 

 

Quote:
Originally Posted by Tallest Skil View Post

 

The other way around.

 

And this pretty much sums up the challenge for Apple in China.  People are very price sensitive in China- the average household income is @$10,500 (if you consider their wealth distribution is among the worst in the world and their median income is @$5000 the problem is even worse).  China mobile refuses to subsidize the iPhone.  If they did they would have to increase their data plan rates to accomodate their higher costs of doing business.  A good example of this is the US and the EU.  Data plans in the US are astronomically higher in the US because they have to recoup their expenses of the hefty subsidies.  Apple gets around a $300 subsidy per phone, where android phones only cost the carriers around $100.  Because of those subsidies to a US consumer a high end android phone and iPhone appear to be 'more or less' the same price.  In that market Apple does pretty well- commanding about 36% overall market share compared to androids 55-60%  with some drift in either direction depending on if Apple is soon to release a new phone (Apples share plummets) or if they've just released a phone (Apples share exceeds android share).

 

Contrast that to Europe.  Since carriers don't subsidize phones, their rates are far lower than in the US.  European consumers, however, actually have to pay the full cost of their phones.  They can purchase the high end android phones for @$400, or buy an iPhone for @$600-700.  Apple is not doing well in Europe with Android enjoying 75-80% of the market.

 

Back to China.  China mobile won't budge on raising rates to all of its customers so it can subsidize Apple.  Apple can't give in and have the carriers not subsidize because they will do even worse than in Europe.  Look at the math.  Median income is @$5000.  Nobody is going to spend nearly 1/5th of their annual income to buy a phone.  (The equivalent would be apple trying to sell iPhones in the us for @$15,000 each).  If you say 'China' Wall Street starts salivating thinking 'HUGE market'  Without a subsidy, Apples potential market are the few (relative to the population)wealthy people that can afford them.

 

For the ones that do want to buy an Apple, there is probably going to be a large influx of smuggled phones, which could hamper their store sales.  No, not knock-offs (although there will be lots of those), but actual smuggled phones.  Already a lady was caught trying to buy large quantities of iPhones before her flight back to China (she had $16,000 in her purse).  She got irate at the Apple stores '2 phones per customer' limit and apparantly went ballistic to where security got called and eventually had to taze her lol (any bets on a lawsuit?).  Buy in the US for $600, fly home, sell for $800, ???, profit!

post #25 of 41
Quote:
Originally Posted by anakin1992 View Post

it is an import, thus china gov will charge tariff on it. in US, there is sale tax on buying iphone. depending on where you are, for iPhone 5 16g, it is about $700 in US. but i am not sure whether the diff of $150 is solely by tariff. 

According to FTA, I believe there is no tariff on electronic products.  The only reason I can think of this high price is Chinese RMB has appreciated a lot wrt the dollar and Apple China failed to adjust to this currency change. This price difference is the reason of the appearance of Chinese scalpers in Hong Kong and US.  I really think the chief of Apple China should be fired because of this inaction.  


Edited by tzeshan - 12/15/12 at 8:04pm
post #26 of 41
Quote:
Originally Posted by tzeshan View Post

According to FTA, I believe there is no tariff on electronic products.  The only reason I can think of this high price is Chinese RMB has appreciated a lot wrt the dollar and Apple China failed to adjust to this currency change. This price difference is the reason of the appearance of Chinese scalpers in Hong Kong and US.  I really think the chief of Apple China should be fired because of this inaction.  

here is an article from wsj on 18-20% border charge on iPhone or similar smartphone devices importing to china. i can not verify it.

http://blogs.wsj.com/chinarealtime/2010/10/20/have-an-ipad-china-customs-says-pony-up/

but if 20% is the ball mark, then it would account most of $150 difference between what i paid in us and what you have to pay in china. i don't think the appreciation of RMB would bring in 20% difference. if apple china is still using the old exchange rate of 1$ = 8RMB, apple is committing a tax fraud.

post #27 of 41
Quote:
Originally Posted by Frood View Post


And this pretty much sums up the challenge for Apple in China.  People are very price sensitive in China- the average household income is @$10,500 (if you consider their wealth distribution is among the worst in the world and their median income is @$5000 the problem is even worse).  China mobile refuses to subsidize the iPhone.  If they did they would have to increase their data plan rates to accomodate their higher costs of doing business.  A good example of this is the US and the EU.  Data plans in the US are astronomically higher in the US because they have to recoup their expenses of the hefty subsidies.  Apple gets around a $300 subsidy per phone, where android phones only cost the carriers around $100.  Because of those subsidies to a US consumer a high end android phone and iPhone appear to be 'more or less' the same price.  In that market Apple does pretty well- commanding about 36% overall market share compared to androids 55-60%  with some drift in either direction depending on if Apple is soon to release a new phone (Apples share plummets) or if they've just released a phone (Apples share exceeds android share).

Contrast that to Europe.  Since carriers don't subsidize phones, their rates are far lower than in the US.  European consumers, however, actually have to pay the full cost of their phones.  They can purchase the high end android phones for @$400, or buy an iPhone for @$600-700.  Apple is not doing well in Europe with Android enjoying 75-80% of the market.

Back to China.  China mobile won't budge on raising rates to all of its customers so it can subsidize Apple.  Apple can't give in and have the carriers not subsidize because they will do even worse than in Europe.  Look at the math.  Median income is @$5000.  Nobody is going to spend nearly 1/5th of their annual income to buy a phone.  (The equivalent would be apple trying to sell iPhones in the us for @$15,000 each).  If you say 'China' Wall Street starts salivating thinking 'HUGE market'  Without a subsidy, Apples potential market are the few (relative to the population)wealthy people that can afford them.

For the ones that do want to buy an Apple, there is probably going to be a large influx of smuggled phones, which could hamper their store sales.  No, not knock-offs (although there will be lots of those), but actual smuggled phones.  Already a lady was caught trying to buy large quantities of iPhones before her flight back to China (she had $16,000 in her purse).  She got irate at the Apple stores '2 phones per customer' limit and apparantly went ballistic to where security got called and eventually had to taze her lol (any bets on a lawsuit?).  Buy in the US for $600, fly home, sell for $800, ???, profit!

While the numbers you give may be true, the fact is there are still a lot of wealthy individuals in China, particularly in the major cities like Beijing, Shanghai and even shenzhen. Individuals who would pay more to be able to show others how much they paid for something.
post #28 of 41
Quote:
Originally Posted by Frood View Post

...

Back to China.  China mobile won't budge on raising rates to all of its customers so it can subsidize Apple.  Apple can't give in and have the carriers not subsidize because they will do even worse than in Europe.  Look at the math.  Median income is @$5000.  Nobody is going to spend nearly 1/5th of their annual income to buy a phone.  (The equivalent would be apple trying to sell iPhones in the us for @$15,000 each).  If you say 'China' Wall Street starts salivating thinking 'HUGE market'  Without a subsidy, Apples potential market are the few (relative to the population)wealthy people that can afford them.

 

For the ones that do want to buy an Apple, there is probably going to be a large influx of smuggled phones, which could hamper their store sales.  No, not knock-offs (although there will be lots of those), but actual smuggled phones.  Already a lady was caught trying to buy large quantities of iPhones before her flight back to China (she had $16,000 in her purse).  She got irate at the Apple stores '2 phones per customer' limit and apparantly went ballistic to where security got called and eventually had to taze her lol (any bets on a lawsuit?).  Buy in the US for $600, fly home, sell for $800, ???, profit!

china mobile's TD-SCDMA network is still in infancy and TD-LTE network just started. it would take time to do the inter-op between TD-SCDMA and TD-LTE. i do think neither china mobile nor apple is ready for partnership to mature yet. i do think they are working together to get technical aspects done before deal can be inked. meanwhile, both china unicom and china telecom network are ready for FDD-LTE and inter-op between their version of LTE and their existing 3G networks are pretty much a done deal. the equipment vendors can provide pretty much proven pieces to either of them. meanwhile, no many carriers are using TD-SCDMA and TD-LTE. so it would take time even for equipment vendors to sort out how to put all pieces into the final pie. 

 

as i said before, 90% of china mobile's 950million users are on 2g or basic gsm phone services. i don't know how much more data services those 90% want. as you said, those 90% are very price sensitive. so this might hinder china mobile marching to provide prenium services to its 10% premium customer users. this will tarnish their image and soon those 10% will take off and park somewhere else. i know it is not easy to transfer phone number across different carriers in china. but think about it, if the competitions from china unicom and telecom heat up, china mobile's premium customers will start to think to drive away. if that thought starts, you can not stop them.

 

china mobile's baggage is those 90% customers. to maintain the services to them, their capital expenditure annually would be on the old equipments and base stations. those old devices do not mean cheaper because vendors are migrating to newer equipments on LTE etc, supports for the old generation stuff will be taking longer. 

 

china mobile is the top brand in china while unicom and telecom are remote busboys. but to regular joes and janes, they do not give a shit the above reasons why china mobile is not having a deal with apple. all they know the best phone on this planet is not on china mobile. if soon some of them got a false impression that the reason that iphone is not on china mobile is that china mobile is not good enough. then it would be a PR issue.

 

apple never dreamed to supply 70% of smartphones in china. well, it might have dreamed it, but in reality, it can not work even if those 70% ppl only want iphone. where can apple get the enough manufacture capacity to do it? it would consume a series of industries: chip foundry, component companies, assembly line companies. so ppl, please drop that impression that apple has to conquer the whole world in order to be something. no, apple can not and should not. what apple can do is to have a fair great product, tight integration between hardware and software, and super processing at component and manufacture. then it would still make tons of money by driving down the build cost to the level no one else can match up while the quality is maintained at the top one.

 

samsung is using the similar parts as those on iphone. i am not sure anyone ever compares the failure rates on samsung's phone and iphones. the comparison is meaningful because the parts are shared on both. of course we are comparing on the parts being used on both platforms. if apple can prove that they can beat samsung in term of quality and mean-time-to-replacement in a large margin, it is winning. 

post #29 of 41
Quote:
Originally Posted by anakin1992 View Post

as i said before, 90% of china mobile's 950million users are on 2g or basic gsm phone services. i don't know how much more data services those 90% want. as you said, those 90% are very price sensitive. so this might hinder china mobile marching to provide premium services to its 10% premium customer users.

It seems like there is a strong trend that the iPhone tends to pull people from being dumb phone users to smartphones. I wouldn't be surprised to see China Mobile's 3G subscribers, smartphone subscribers, and average monthly rate per subscriber rise once the iPhone is introduced.

Note that over a year ago China Mobile claimed over 10 million iPhone users on China Mobile. That means they were only on GSM for voice and data for their expensive iPhone. If they launch the iPhone 5 in 2013 on China Mobile I think the numbers would be high enough to benefit both parties.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply
post #30 of 41
Quote:
Originally Posted by tzeshan View Post

Why does Apple China store charge $850 for the iPhone? Is this price gouging?
http://store.apple.com/cn/browse/home/shop_iphone/family/iphone5?cid=aos-cn-iphone5-home-herobuy
RMB 5288 = $850
In US iPhone 4 costs $650
You are looking at a US price without taxes and comparing it to a Chinese price with the tax built in as required by law. All Apple products include a government mandated 17 1/2 % tax as a foreign computer company even though the products are made there. Looking at total prices with all taxes, there is only about a $40 difference in price.
post #31 of 41
Quote:
Originally Posted by anakin1992 View Post

here is an article from wsj on 18-20% border charge on iPhone or similar smartphone devices importing to china. i can not verify it.

http://blogs.wsj.com/chinarealtime/2010/10/20/have-an-ipad-china-customs-says-pony-up/

but if 20% is the ball mark, then it would account most of $150 difference between what i paid in us and what you have to pay in china. i don't think the appreciation of RMB would bring in 20% difference. if apple china is still using the old exchange rate of 1$ = 8RMB, apple is committing a tax fraud.

A private person paying import tax is different from Apple exporting iPad to China.  The Chinese government collects various taxes when Apple sells an iPad in China.  Those private person are considered smugglers if they don't pay import tax since their purpose is making money reselling iPad in China.  

post #32 of 41
Quote:
Originally Posted by FreeRange View Post

You are looking at a US price without taxes and comparing it to a Chinese price with the tax built in as required by law. All Apple products include a government mandated 17 1/2 % tax as a foreign computer company even though the products are made there. Looking at total prices with all taxes, there is only about a $40 difference in price.

Where do you get the 17 1/2 % tax?  Do you have a link? 

post #33 of 41
Quote:
Originally Posted by Frood View Post


And this pretty much sums up the challenge for Apple in China.  People are very price sensitive in China- the average household income is @$10,500 (if you consider their wealth distribution is among the worst in the world and their median income is @$5000 the problem is even worse).  China mobile refuses to subsidize the iPhone.  If they did they would have to increase their data plan rates to accomodate their higher costs of doing business.  A good example of this is the US and the EU.  Data plans in the US are astronomically higher in the US because they have to recoup their expenses of the hefty subsidies.  Apple gets around a $300 subsidy per phone, where android phones only cost the carriers around $100.  Because of those subsidies to a US consumer a high end android phone and iPhone appear to be 'more or less' the same price.  In that market Apple does pretty well- commanding about 36% overall market share compared to androids 55-60%  with some drift in either direction depending on if Apple is soon to release a new phone (Apples share plummets) or if they've just released a phone (Apples share exceeds android share).

Contrast that to Europe.  Since carriers don't subsidize phones, their rates are far lower than in the US.  European consumers, however, actually have to pay the full cost of their phones.  They can purchase the high end android phones for @$400, or buy an iPhone for @$600-700.  Apple is not doing well in Europe with Android enjoying 75-80% of the market.

Back to China.  China mobile won't budge on raising rates to all of its customers so it can subsidize Apple.  Apple can't give in and have the carriers not subsidize because they will do even worse than in Europe.  Look at the math.  Median income is @$5000.  Nobody is going to spend nearly 1/5th of their annual income to buy a phone.  (The equivalent would be apple trying to sell iPhones in the us for @$15,000 each).  If you say 'China' Wall Street starts salivating thinking 'HUGE market'  Without a subsidy, Apples potential market are the few (relative to the population)wealthy people that can afford them.

For the ones that do want to buy an Apple, there is probably going to be a large influx of smuggled phones, which could hamper their store sales.  No, not knock-offs (although there will be lots of those), but actual smuggled phones.  Already a lady was caught trying to buy large quantities of iPhones before her flight back to China (she had $16,000 in her purse).  She got irate at the Apple stores '2 phones per customer' limit and apparantly went ballistic to where security got called and eventually had to taze her lol (any bets on a lawsuit?).  Buy in the US for $600, fly home, sell for $800, ???, profit!
Gee - where to start with this ridiculous rant? China is now the second largest luxury goods market in the world, and will be the largest within the next few years. Regardless of income, consumers with even modest means here still have one of the highest savings rates in the world and will save up for months to buy expensive goods. Further, China now has a larger middle class than the US. So your whole income position is totally bogus. Sure there are hundreds of millions in China that can't afford an iPhone, but there are over 1.3 BILLION people here!

Also, even without subsidies, and even though the 3G function isn't compatible with China Mobile's network, there are still millions of iPhones on their network. And not sure where you came up with an iPhone cost in the US of $600 when in fact it retails for $650 plus tax for a net price of about $700.
post #34 of 41
Quote:
Originally Posted by tzeshan View Post

Where do you get the 17 1/2 % tax?  Do you have a link? 
Here's an article that actually puts it at 20% so apparently it has gone up. I live in China and visit the Apple stores here and in Hong Kong in my travels so am well aware of this tax, as are the Chinese. Which is why they shop in Hong Kong, and also buy in the US to sell into China.

http://www.pcmag.com/article2/0,2817,2392446,00.asp
post #35 of 41
Quote:
Originally Posted by FreeRange View Post

Here's an article that actually puts it at 20% so apparently it has gone up. I live in China and visit the Apple stores here and in Hong Kong in my travels so am well aware of this tax, as are the Chinese. Which is why they shop in Hong Kong, and also buy in the US to sell into China.
http://www.pcmag.com/article2/0,2817,2392446,00.asp

This is sales tax.  It is paid by the buyers.  If this is true the Chinese buyers in China will pay $850 + $850 x 20% = $1020.  

post #36 of 41

So for the folks in China, what's the real deal with the "lack of interest" talk by the media... has the weather been partly responsible for the lack of crowds along with the reservations?  The reservations still have to be picked up though, right?  How busy are the apple stores for real over there and is there as much luck of interest and negativity in China as described the the mainstream media? 

 

Just wondering if the appetite for apple is still big in China or if it's waned at all.  Here in the US apple products have been flying off the shelves, the apple stores in my area and my buddies from other states are jam packed with lots of buying going on so not even the mm can twist their "info" to bash apple, at least in the US.

post #37 of 41
Quote:
Originally Posted by Frood View Post

Contrast that to Europe.  Since carriers don't subsidize phones, their rates are far lower than in the US.  European consumers, however, actually have to pay the full cost of their phones.  They can purchase the high end android phones for @$400, or buy an iPhone for @$600-700.  Apple is not doing well in Europe with Android enjoying 75-80% of the market.

You've already gotten your much needed share of feedback on your view of how things are in China, so I'll just respond to the 'Europe part'. They do sell subsidized phones, prices being similar to the US. As a matter of fact, many telcos require you to return the phone after your subscription ends. You can buy the phone afterwards, but they make you pay € 300 for a phone which has a Street Value of € 100 - or so.

You are correct on the lower rates compared to the US. Then again, many providers who charge little for your data bundle give you a 2Mb down, and **get this** a 0.1Mb up datarate (no typo there)
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post #38 of 41
Quote:
Originally Posted by FreeRange View Post

Gee - where to start with this ridiculous rant?... Further, China now has a larger middle class than the US. So your whole income position is totally bogus. Sure there are hundreds of millions in China that can't afford an iPhone, but there are over 1.3 BILLION people here!
 

 

Not really sure where to start with your counter rant.  I posted hard numbers about average and median income in China.  I compared that to a number on the price they are selling the iPhone for.  They are factual numbers (incomes were from Forbes, iPone price from this sites report).  If you dispute the numbers that is fair- state your numbers and provide the source.

 

You've taken those hard numbers provided and chosen to call them 'totally bogus'- and replaced them with the more subjective term 'middle class.'  You do realize the bar to qualify for 'middle class' in China is generally at or below the poverty line in the US?  But yes, I won't dispute that using that definition China does indeed have a larger middle class than the US.  That is a fact.  But *my belief* is that people in the US at or below the poverty line would not be a booming market for Apple to sell its iPhones to at $800+ a piece.  If they could sell the phone for $800 and have someone else choose to pay them $400 so the person actually getting the phone would only have to come up with the remaining $400- they would do quite a bit better.

 

At least on your last sentence above we agree, and that was my point- except you worded it backwards.   There are 1.3 BILLION people in China (yep, its a huge market!)- and hundreds of millions of them might be able to afford an iPhone.  So that is the real target of consumers Apple needs to hit.

 

I'm not anti Apple.  I'm really not- read my post again objectively.  My point is Apple has a challenge to maximize its chance to reach those people in China.  I guess I need to work on wording things on this site so they sound more Apple friendly. 

 

Another way of restating my entire original post is this:

If Apple can get China Mobile to subsidize the iPhone so it is comparably priced to Android phones, there is no reason Apple can't achieve 40% or higher market share of high end smartphones in China.  (And that is saying a lot since Android accounts for close to 90% of China's current market)

 

It would be a stunner and I'd be happy for Apple (and its investors!).


Edited by Frood - 12/16/12 at 6:47am
post #39 of 41
Quote:
Originally Posted by PhilBoogie View Post


 I'll just respond to the 'Europe part'. They do sell subsidized phones, prices being similar to the US. As a matter of fact,

 

So you are saying European carriers subsidize to the same extent as in the U.S. and phone prices are similar to the US...   That is news to me and contrary to just about everything I've read from the European posters.

 

I don't truly believe your statement but if someone has data/evidence I'll be a converted believer quickly.  (We're not talking one isolated incident/carrier here, we're talking market wide)

 

But if you are right, what is the reason for Apple's poor market share in Europe if it is not price related?

post #40 of 41
Quote:
Originally Posted by Frood View Post

Quote:
Originally Posted by PhilBoogie View Post

 I'll just respond to the 'Europe part'. They do sell subsidized phones, prices being similar to the US. As a matter of fact,

So you are saying European carriers subsidize to the same extent as in the U.S. and phone prices are similar to the US...   That is news to me and contrary to just about everything I've read from the European posters.

I don't truly believe your statement but if someone has data/evidence I'll be a converted believer quickly.  (We're not talking one isolated incident/carrier here, we're talking market wide)

But if you are right, what is the reason for Apple's poor market share in Europe if it is not price related?

Well, Europe is vastly different. From the US, too. They don't use Credit/Debit Cards much - that's one reason. 2nd is that the US makes up for half of Apples' profit, so that's also something to keep in mind. On the subsidies, I guess you could take a spin around the 'European Telco Internet', but it's mostly / all in their local language. Don't know if you speak / read so many, so perhaps just check out the ones in the UK.
http://www.vodafone.co.uk/iphone/
http://www.virginmobile.com/vm/home.do
http://phone-shop.tesco.com/tesco-mobile/
https://www.o2.co.uk/browsing/phones/apple/iphone-5-16gb-black/

As for my statement, I'm just someone with an opinion on the internet. If I'm asked for (telco) evidence I'm usually out like the wolves, as there is no truth. Only your own interpretation of what these telcos are trying to make you believe. The truth is often to be found in the disclaimers, small print and your incontrovertible invoice.
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