Apple focuses more on brand quality, less on sales in China
While initial iPhone sales have not had a blockbuster start in China, Apple executives said this week they don't mind -- for them, it's all about building the Apple brand for the long haul.
Apple's chief operating officer, Tim Cook, was asked by analyst Benjamin Reitzes of Barclays Capital about iPhone sales in China during Monday's earnings report conference call. Cook said that while Apple typically does not reveal sales figures by country, he was willing to talk about China due to the publicity the iPhone's debut has garnered.
Cook revealed that Apple has activated more than 200,000 iPhones in China as of early January. The handset debuted in late October to a slow start, selling just 5,000 phones at launch.
"We are very, very focused on the quality of the point of sale and consumer experience," Cook said. "We would prefer to move slow because we are building the brand for the long-term and we are very much focused on the long-term in that market, because we think there is significant potential there."
Apple executives have long spoke of their desire to launch the iPhone in the nation of over one billion, well before a three-year deal was reached with carrier China Unicom last August. The company has also been in negotiations with competing carrier China Mobile to offer the iPhone, though Cook said Monday he wouldn't comment on other carriers or potential future sales figures.
"We are very happy working with China Unicom," he said. "They are an excellent partner for us, and I am thrilled we are underway and have got about 2.5 months experience under our belt."
Later in the call, Cook was asked again about the China market, and how Apple, as a premium brand, would overcome the nation's lower average income. Cook noted that while people there are not as rich as they are in the U.S. or Western Europe, there is a "significant size" middle class where Apple can make inroads.
"If you look at greater China last quarter -- which is China, Hong Kong and Taiwan -- our revenues tripled year-over-year in that geography, which I think is phenomenal by any measure," Cook said. "We had a tremendous focus on it."
The company also revealed Monday that Mac sales in China increased nearly 100 percent year over year in the first financial quarter of 2010. In all, 58 percent of Apple's revenue in the quarter came from international sales. Cook said for the Mac maker to continue its success, it must push hard into markets like China.
"It is clear as you look at our numbers our growth rates are much higher outside the U.S.," he said. "We realize we must do well in these markets to continue to grow."
Apple's chief operating officer, Tim Cook, was asked by analyst Benjamin Reitzes of Barclays Capital about iPhone sales in China during Monday's earnings report conference call. Cook said that while Apple typically does not reveal sales figures by country, he was willing to talk about China due to the publicity the iPhone's debut has garnered.
Cook revealed that Apple has activated more than 200,000 iPhones in China as of early January. The handset debuted in late October to a slow start, selling just 5,000 phones at launch.
"We are very, very focused on the quality of the point of sale and consumer experience," Cook said. "We would prefer to move slow because we are building the brand for the long-term and we are very much focused on the long-term in that market, because we think there is significant potential there."
Apple executives have long spoke of their desire to launch the iPhone in the nation of over one billion, well before a three-year deal was reached with carrier China Unicom last August. The company has also been in negotiations with competing carrier China Mobile to offer the iPhone, though Cook said Monday he wouldn't comment on other carriers or potential future sales figures.
"We are very happy working with China Unicom," he said. "They are an excellent partner for us, and I am thrilled we are underway and have got about 2.5 months experience under our belt."
Later in the call, Cook was asked again about the China market, and how Apple, as a premium brand, would overcome the nation's lower average income. Cook noted that while people there are not as rich as they are in the U.S. or Western Europe, there is a "significant size" middle class where Apple can make inroads.
"If you look at greater China last quarter -- which is China, Hong Kong and Taiwan -- our revenues tripled year-over-year in that geography, which I think is phenomenal by any measure," Cook said. "We had a tremendous focus on it."
The company also revealed Monday that Mac sales in China increased nearly 100 percent year over year in the first financial quarter of 2010. In all, 58 percent of Apple's revenue in the quarter came from international sales. Cook said for the Mac maker to continue its success, it must push hard into markets like China.
"It is clear as you look at our numbers our growth rates are much higher outside the U.S.," he said. "We realize we must do well in these markets to continue to grow."
Comments
Cook said for the Mac maker to continue its success, it must push hard into markets like China.
They got our jobs for a lousy sales of 200,000 overpriced Wifi-less iPhones made 95% by machine anyway!!
Of course the grey market has sold millions in China I'm sure. Can we get a iPhone breakdown what Asian country nearby China has sold the most.
How about how many iPhones are on China's networks, then we can minus 200,000 to get a idea?
I wonder if the 100% YoY Mac sales increased is directly due to an iPhone “halo effect”.
PS: You kids are unreal. Name one company that brags about the faults and hides their merits? It’s a fraken publicly traded company. Besides that, how much success do you expect in China? It’s an American company selling a premium item that was required bylaw to have less functionally than a cheaper grey market item. Seriously people, learn to be a little objective.
Apple can do no wrong...
Newton? Hi-Fi? G4 Cube? Hockey puck mouse? Those were all things Apple did wrong...
They got our jobs for a lousy sales of 200,000 overpriced Wifi-less iPhones made 95% by machine anyway!!
Of course the grey market has sold millions in China I'm sure. Can we get a iPhone breakdown what Asian country nearby China has sold the most.
How about how many iPhones are on China's networks, then we can minus 200,000 to get a idea?
This post
Newton? Hi-Fi? G4 Cube? Hockey puck mouse? Those were all things Apple did wrong...
And so have some parents.
They got our jobs for a lousy sales of 200,000 overpriced Wifi-less iPhones made 95% by machine anyway!!
Of course the grey market has sold millions in China I'm sure. Can we get a iPhone breakdown what Asian country nearby China has sold the most.
How about how many iPhones are on China's networks, then we can minus 200,000 to get a idea?
Fully agreed. I it obvious that the grey market is huge in china, so there is really no need for apple to pick fights with China to get a full featured iPhone through. All they need is people buying these phones in US and then shipping them over there through ebay. Apple still makes money. (Though I heard somewhere that ATT does not give up the subsidy unless the phone is activated on its network.)
PS: You kids are unreal. Name one company that brags about the faults and hides their merits? It?s a fraken publicly traded company. Besides that, how much success do you expect in China? It?s an American company selling a premium item that was required bylaw to have less functionally than a cheaper grey market item. Seriously people, learn to be a little objective.
You have to be kidding, right?
As long as we allow lying, cheating and posting drivel from obvious trollers to continue, there will be no objectivity. It isn't in their DNA.
Newton? Hi-Fi? G4 Cube? Hockey puck mouse? Those were all things Apple did wrong...
I don't agree with your categorization of "Things that Apple did wrong...". The products you mention may not have been big sellers but what was wrong with them?
The Newton was way ahead of its time, it failed to attract some crucial applications but the Newton was a very useful item (my Newton 110 still works fine).
The Hi-Fi speaker was a good product. I have two of them and they sound great; nothing wrong with them.
I also still have a G4 cube, used it for four years without one single problem.
The hockey-puck mouse did what it was supposed to do, if not a bit awkwardly.
What do you mean with your assertion that Apple did things wrong here?
"This report leads to one possible interpretation of the Apple invitation with colors lining up with the brands of major carriers"
Ouch, and further proof:
Apple executives have long spoke of their desire to launch the iPhone .......
Spoken.
PS: You kids are unreal. Name one company that brags about the faults and hides their merits? It?s a fraken publicly traded company. Besides that, how much success do you expect in China? It?s an American company selling a premium item that was required bylaw to have less functionally than a cheaper grey market item. Seriously people, learn to be a little objective.
I agree! I also read somewhere that WiFi has been allowed for the next batch of official iPhones in China, so that should help sales.
I agree! I also read somewhere that WiFi has been allowed for the next batch of official iPhones in China, so that should help sales.
I read the the law requiring the lack of WiFI in phones was set to be dropped before the official iPhone was launched. If so, why even release an iPhone without it when they had only wait a few months. Also, the WiFi chip in the iPhone is integrated with the Bluetooth radio and tied to other chips.
Did they use a different chip, just restrict the functionality of that chip without changing the design, remove the WiFi antenna, or simply remove the firmware and UI elements that allow its use, but will re-add it with an update at a later time?
I read the the law requiring the lack of WiFI in phones was set to be dropped before the official iPhone was launched. If so, why even release an iPhone without it when they had only wait a few months. Also, the WiFi chip in the iPhone is integrated with the Bluetooth radio and tied to other chips.
Did they use a different chip, just restrict the functionality of that chip without changing the design, remove the WiFi antenna, or simply remove the firmware and UI elements that allow its use, but will re-add it with an update at a later time?
hopefully someone has done the hack to load non-chinese version iphone firmware/UI etc. it would be interesting to see whether wifi will come back.
Fully agreed. I it obvious that the grey market is huge in china, so there is really no need for apple to pick fights with China to get a full featured iPhone through. All they need is people buying these phones in US and then shipping them over there through ebay. Apple still makes money. (Though I heard somewhere that ATT does not give up the subsidy unless the phone is activated on its network.)
Many of the grey market iPhones China are probably bought in nearby Hong Kong where iPhones are sold officially unlocked. I don't know if there is any changes now, but there is really no need to buy in US and ship all the way to China. Maybe some iPhones are bought in nearby Asian countries and shipped to China that way.