Apple in China
Its obvious that in the coming years, China will become one of the most important markets in the world as the transition to a mixed economy continues. Many Chinese citizens (and presumable small businesses) are purchasing computers for the first time. My question is what are they buying? How is Mac OS X support for Chinese? If it is not as equally good as its support for English, it should be a number one priority for Apple. Is Apply actively and aggressively trying to push the Macintosh as a viable option in China? I have no doubt that Michael Dell and other more likeable PC tycoons are doing this and Apple would be foolish to do otherwise. I am also wondering if it would be advisable for Apple to seriously cut their margins for products sold by Apple China. In the US they are on average about 20-25%? The potential gains are worth Apple reducing their margins to 5% in the Chinese market and perhaps other high-growth areas to ensure a healthy future for the Macintosh.
Comments
What Chinese are buying? People want Intel 'course, since it's a brand name...and if you don't know chinese, they literally live and die by brand names...(anything and everything have to be brand-name, even if it's fake...) However, I think the C3/C4 chips are in a good position to dominate the market. Designed by Taiwanese company, it's cheaper, and somewhat comparable to P3/P4. (C4 is between P3 and P4) Of course the Chinese government is developing it's own chip and a Win3.2 usability equivalent Linux...so I guess the government wants a big piece of the pie too...Oh yeah, before I forget, Intel is investing in a headquarter in Beijing and a fab in Shanghai to be in production by 2005 hopefully...
Dell and everyone else have been eyeing China since WTO, and competition will be stiff...Apple is not pushing the Mac too much...a few small offices here and there, and last I heard, tech support is sh!t...(almost makes me wanna work there, if it wasn't for the poor pay...I'd much rather work for Intel-China unfortunately, unless Apple can pay me something like US$50k/yr to work there
Is it worth gaining market share in China? definitely. However, the Chinese haven't gotten to a point where asthetics can justify the high cost of Apple...so it won't do too well except in yet another nitch market. If I recall correctly, in the early 90s, Apple-Japan use to have like a 80-90% market share compare to like 10% now...don't count on Apple making "good" decisions in this aspect...
Aside from this, it seems they've also been busy making Mac OS X a viable operating system there. OS X is already an international operating system, able to switch languages on the fly. In addition, Jaguar will include Chinese GB18030 fonts, which the Chinese government requires in language-related products.
Unfortunately, as the above poster mentioned, I don't believe Apple can do well in China beyond doing their best to sell what systems they can to the population rich enough to afford Mac systems. Most people in China don't own computers, but as the demand for them rises, the cheaper boxes will be the first off the shelves. Pretty is not a priority, nor does it justify the extra expense. While Apple is a strong international brand, it's simply not a very resonant one in China at this time for the above reasons.
I think for Apple to be successful in China, one of two things has to happen: 1) China's consumer buying power (and buying culture) has to rise to the level of U.S./Japan/etc. or 2) Apple has to cater to the bulk of the Chinese market by making dirt cheap boxes. Which do you think will happen first?
<strong>...and if you don't know chinese, they literally live and die by brand names...(anything and everything have to be brand-name, even if it's fake...)</strong><hr></blockquote>
Well, true. We are also extremely cheap people. (yes, i'm chinese, from taiwan, tho). don't get me wrong, I love macs. But i'm not the same as people that are attempt to climb out of third-world status. They can barely afford quality goods. My aunt has a business in China, and she remarks that all the goods in china are not quality. Stuff like washing machines are not able to last more than a few years. Appearently, the people has gotten used to buying goods like that. The goods are cheap, provide status among their neighborhood, but the goods don't last very long.
So, with mentality like that, why would you think they're connasseurs of computers? Here in the US we can get a eMachine for 300 bucks. Now, if we skimp on the quality a bit, i think we can get the price down to 150 to 200 bucks. Certainly, no one among us would buy a 200 dollar eMachine, even if we're into wintel boxes. For a Mac to compete with cheap wintel boxes, that will no doubt be the first computer of average china-chinese household, Apple must make a computer at that price range. Sub-300 dollar range.
Now, i just saw some pics of cyclists in china using Campy 10 components (i know there are some cyclists here), which are sorta like the Dual Gig equivalent in the bicycle world, but this level of set up is extremely rare.
So, from a nation that ride 20 dollar bicycles, and are not upset with their 20 dollar cycle when it falls apart in 2 years. It's hard to sell them a 1500 dollar computer that will last at least 5 years (mechanically).
Now, if i can make every kid in china wanting a pet rock, i'd be rich
I recall the first and the only washing machine we had in my house in China lasted 'til we left...(5 years or so) and our Fridge, TV 'n stuff didn't have problems...but yeah, the quality of Chinese assembled electronics was rather infamous (which is why the stuff we bought were all Japanese...) It's much better now, but the quality of general products are still not at a level where people here expect...
[quote]So, from a nation that ride 20 dollar bicycles, and are not upset with their 20 dollar cycle when it falls apart in 2 years. It's hard to sell them a 1500 dollar computer that will last at least 5 years (mechanically).[/QB]<hr></blockquote>
20 dollar bike!!?! That's SOOOO expensive! Make sense that prices went up since a decade ago, considering the growth rate of the chinese economy 'n all...(averaged like 10+% a year since the world invested in China again after 1989 incident) I remember my first bike was like $10 (using exchange rates from back then too), and it was as durable as a 7-yr-old boy's bike can be
[quote]I think for Apple to be successful in China, one of two things has to happen: 1) China's consumer buying power (and buying culture) has to rise to the level of U.S./Japan/etc. or 2) Apple has to cater to the bulk of the Chinese market by making dirt cheap boxes. Which do you think will happen first?<hr></blockquote>
I pick 1. The Chinese buying culture is quite interesting...in big cities, you have a small portition (still big in absolute numbers) who make equivalent of $20k/yr or more. Considering that you don't need to pay taxes, SS, etc, life is good. 'Real' brand name products are mroe expensive then here, but they still fly off the shelves. My mom has a friend who goes to stores whith prices equivalent to say Macy's, and think everything's cheap @_@
As for the general population, major cities, salaries aver like $1.5k/yr last I heard...5x increase in a decade...It'll be a LONG time for general urban population to make $10k/yr, but I'm still willing to bet that by then, Apple still won't have sub $1k machines that are comparable to similarly priced Wintel ones to compete in the Asian market...
They won't have to worry about spelling Apple wrong because it's never on any of the machines anyway..
<strong>So how long till we see counterfeit Apples flooding black market alleys?
They won't have to worry about spelling Apple wrong because it's never on any of the machines anyway..</strong><hr></blockquote>
Maybe they'll get confused an put a logo of an orange instead of an apple
Apple needs to do whatever they can to get their product sellings in China. At least they have to get their brand as well known as possible so when the purchasing power of the average consumer climbes a lot higher Apple will be in a great position because they will be well known.
[ 08-09-2002: Message edited by: MacsKickAss ]</p>
<strong>Apple needs to do whatever they can to get their product sellings in China. At least they have to get their brand as well known as possible so when the purchasing power of the average consumer climbes a lot higher Apple will be in a great position because they will be well known.</strong><hr></blockquote>
Generous donations to schools, perhaps?
[ 08-13-2002: Message edited by: soulcrusher ]</p>