China Unicom gains 5,000 iPhone subscribers from launch
China Unicom announced Tuesday that its brand new 3G network had already signed up more than a million subscribers, but only 5,000 iPhone customers since the device launched last week.
China's second-largest wireless operator said that it is satisfied with iPhone sales thus far. Unicom Chairman Chang Xiaobing said his company expects to add a million new 3G subscribers each month, and that the iPhone will boost its fourth-quarter revenues, though further details were not provided, according to Reuters.
Chinese investment group CLSA Ltd. has estimated that Apple could sell 460,000 iPhones through China Unicom each year, according to Bloomberg. But that number, if accurate, would be less than the number sold on nation's gray market.
On Friday, the iPhone debuted with a relatively high price of 6,999 yuan, or $1,024, for the high-end iPhone 3GS without a service contract. The same handset can be purchased on the gray market in Hong Kong for about $800.
Following the launch, reports suggested the level of enthusiasm for the iPhone launch was muted. High prices and a lack of sellouts at local stores gave the first indications that the launch may not have been a huge success.
In August, China Unicom and Apple reached a three-year non-exclusive agreement to sell the iPhone. Apple has since turned its attention to China Mobile, the nation's largest wireless carrier, which plans to launch its own 3G network this year.
A sticking point for some potential iPhone buyers has been the handset's lack of Wi-Fi. The capability was left out because the Chinese government temporarily banned it in favor of a rival native offering. The ban, however, was relaxed in May, after manufacturing of the new phone began, and China Unicom hopes to have Wi-Fi in the next line of phones released before the end of the year.
China's second-largest wireless operator said that it is satisfied with iPhone sales thus far. Unicom Chairman Chang Xiaobing said his company expects to add a million new 3G subscribers each month, and that the iPhone will boost its fourth-quarter revenues, though further details were not provided, according to Reuters.
Chinese investment group CLSA Ltd. has estimated that Apple could sell 460,000 iPhones through China Unicom each year, according to Bloomberg. But that number, if accurate, would be less than the number sold on nation's gray market.
On Friday, the iPhone debuted with a relatively high price of 6,999 yuan, or $1,024, for the high-end iPhone 3GS without a service contract. The same handset can be purchased on the gray market in Hong Kong for about $800.
Following the launch, reports suggested the level of enthusiasm for the iPhone launch was muted. High prices and a lack of sellouts at local stores gave the first indications that the launch may not have been a huge success.
In August, China Unicom and Apple reached a three-year non-exclusive agreement to sell the iPhone. Apple has since turned its attention to China Mobile, the nation's largest wireless carrier, which plans to launch its own 3G network this year.
A sticking point for some potential iPhone buyers has been the handset's lack of Wi-Fi. The capability was left out because the Chinese government temporarily banned it in favor of a rival native offering. The ban, however, was relaxed in May, after manufacturing of the new phone began, and China Unicom hopes to have Wi-Fi in the next line of phones released before the end of the year.
Comments
Or should I say...
I guess they didn't give the people's what they wanted!
(a take from the name The People's Republic of China)
They (the Cinese) make the iPhone for less than $300, and Apple tries to sell it to them again for more than $1,000? That's how many months of salary for the average Chinese? Hmm...
I've always wondered about this.
They (the Cinese) make the iPhone for less than $300, and Apple tries to sell it to them again for more than $1,000? That's how many months of salary for the average Chinese? Hmm...
Well that's an age old calculation, how many Model Ts did a Ford worker have to make before they could afford to buy one? It's not the average Chinese worker who's going to be buying these, it's the rich folks.
Besides, the enthusiasm has already subsided, it's been over two years.
Is that really a surprise? A thousand dollars for an iPhone?! and without WiFi?! People could easily buy an iPhone from eBay or any gray market for a lot less.
Besides, the enthusiasm has already subsided, it's been over two years.
Totally agree with you here, we have all seen the really good knock offs coming out of china, granted they were not iPhone, but for someone who had to wait for two years, gets no wifi, and has to pay 2 or three times more, the knockoffs start to look pretty good. Besides if they have any of the android devices there it would be good enough for most at this time. Iphone's success here was mostly due to higher spending power (we can say for only $100 more I could get this) and the device being revolutionary at the time of launch.
Well that's an age old calculation, how many Model Ts did a Ford worker have to make before they could afford to buy one? It's not the average Chinese worker who's going to be buying these, it's the rich folks.
Just to be picky: Ford paid his employees about twice the standard wage at the time and the model-T was made to be affordable. So, while I agree with your above statement, the analogy does not hold. Cheers.
Just to be picky: Ford paid his employees about twice the standard wage at the time and the model-T was made to be affordable. So, while I agree with your above statement, the analogy does not hold. Cheers.
I probably mixed 2 points up a bit there. A Ford worker could afford a car, but would have to work 4 months to buy one, making many more cars in this time. The number of iPhones a factory worker would have to make to afford one is a lot more (an impossibly big number probably) than 4 months worth.
The number of people willing to pay $1000+ for a more limited version of the iPhone is probably pretty limited. Especially when China Unicom is publicly saying that they hope to offer a version *with* WiFi in a few months.
If you have to have an iPhone today, you get it via Hong Kong. If you're willing to wait another few months, you can get it direct from China Unicom fully featured.
If Apple and China Unicom had said that a software update would enable WiFi in a few months, that might have helped a little. But I'm not sure whether Apple removed the hardware or simply disabled it...
reinharden
Why would anybody go to Unicom here and get locked in for three years at crazy costs? As an Apple stockholder, I'm concerned they've missed the boat and losing potential customers everyday like my friend. Just sell the phone and drop the contracts then let the phone sell the Apps as Unicom has a weak story to market here as long as the gray market dominates everyday life.
SMKinChina
PS My 3G 16G V3.0.1 jailbroken phone from the UK works fine here.
It is the same as software piracy in many Asian regions. Software is priced at levels which no person would consider buying it given the easy access to pirated copies on the grey market.
At the end of the day, Apple will not be too concerned. They still make profit on the grey imports from HK, so don't have much to gain.
Finally, you'd think that as the devices are made in China, that there would be substantially less costs as non shipping is required. Why not use these savings to bring the price down in that region?
Guess they didn't give what the people wanted!
Or should I say...
I guess they didn't give the people's what they wanted!
(a take from the name The People's Republic of China)
Do we know how many Mandarin apps there are? Maybe that's the problem.
Finally, you'd think that as the devices are made in China, that there would be substantially less costs as non shipping is required. Why not use these savings to bring the price down in that region?
And compromise profits? Apple?
They (the Cinese) make the iPhone for less than $300, and Apple tries to sell it to them again for more than $1,000? That's how many months of salary for the average Chinese? Hmm...
After being here for 5 years, Apple has truly misunderstood the potential of just selling the phone. Yesterday, my friend went and got an 8Gig Apple 3G jailbroken to V3.0. Works fine with China Mobile or Unicom. Cost $353 USD includes lots of Apps from "Icy" and to jailbreak.
I have no idea why Apple totally screws over Chinese consumers. It isn't just the iPhone either, all Apple products in China are 50-100% more expensive than in the USA even though they're all MADE in China. I know the sales taxes are high and that plays some role, but after you subtract that, there's still a big gap that doesn't make sense.
The Apple authorized dealer network there is a complete joke. Most of the retailers are con artists who pass off refurbished stuff as new. Don't bother going to them for warranty or repair work, very few outside of Beijing or Shanghai will have technicians or people who even use/own the computers they sell.
The big question is....how many of these nerfed iPhones did Apple already manufacture before of the government gave it's seal of approval on regular WiFi?
They (the Cinese) make the iPhone for less than $300, and Apple tries to sell it to them again for more than $1,000?
Its not Apple that is chargin $1024. They only want $600 for it. They didnt want to neuter the wifi out of it...This is all Unicoms crap. They will have to drop the price and add wifi if they want to make a success out of it.
I can see why the negotiations took as long as they did. Unicom are a buncha idiots. The iPhone is a proven winner, and they still managed to screw it up. They could have had this done over a year ago, gone with a somewhat standard pricing model and been riding the wave of profits, now they got probably 12 months of inventory on their hands and Apple will not likely sell more than is in the channel there unless prices and policies change rapidly.l
Its not Apple that is chargin $1024. They only want $600 for it. They didnt want to neuter the wifi out of it...This is all Unicoms crap. They will have to drop the price and add wifi if they want to make a success out of it.
I can see why the negotiations took as long as they did. Unicom are a buncha idiots. The iPhone is a proven winner, and they still managed to screw it up. They could have had this done over a year ago, gone with a somewhat standard pricing model and been riding the wave of profits, now they got probably 12 months of inventory on their hands and Apple will not likely sell more than is in the channel there unless prices and policies change rapidly.l
This. Well-stated.
Fighting a well developed grey market is near impossible. Apple and the carriers would need to seriously reduce their profit targets to get a sensible price that would lure people away from the grey market, and they need to include all features.
It is the same as software piracy in many Asian regions. Software is priced at levels which no person would consider buying it given the easy access to pirated copies on the grey market.
At the end of the day, Apple will not be too concerned. They still make profit on the grey imports from HK, so don't have much to gain.
Finally, you'd think that as the devices are made in China, that there would be substantially less costs as non shipping is required. Why not use these savings to bring the price down in that region?
Does Apple have to fight the grey market? If the grey market is what it is, then that covers the middle and low end in China for Apple. Now, they're also addressing the high-end with the officially sanctioned release. So what's not to like? Apple makes money in both markets.
Its not Apple that is chargin $1024. They only want $600 for it. They didnt want to neuter the wifi out of it...This is all Unicoms crap. They will have to drop the price and add wifi if they want to make a success out of it.
.l
Why is Apple allowing Unicom to make an additional $424 off the iPhone (71% more?)? Apple surely has some say as to what they allow them to charge- it's not exactly as if this is poor Apple- their hands are tied.
Its not Apple that is chargin $1024. They only want $600 for it. They didnt want to neuter the wifi out of it...This is all Unicoms crap. They will have to drop the price and add wifi if they want to make a success out of it.
I can see why the negotiations took as long as they did. Unicom are a buncha idiots. The iPhone is a proven winner, and they still managed to screw it up. They could have had this done over a year ago, gone with a somewhat standard pricing model and been riding the wave of profits, now they got probably 12 months of inventory on their hands and Apple will not likely sell more than is in the channel there unless prices and policies change rapidly.l
Then Apple should have never agreed to deal with them. I blame Apple just as much as I do China Unicom. In an effort to grab more marketshare and $$$, they've sold out their principals and their position as being FIRMLY in the driver's seat when it comes to matters with the iPhone and its other products.
You sleep with dogs, you wake up with fleas
Totally agree with you here, we have all seen the really good knock offs coming out of china, granted they were not iPhone, but for someone who had to wait for two years, gets no wifi, and has to pay 2 or three times more, the knockoffs start to look pretty good. Besides if they have any of the android devices there it would be good enough for most at this time. Iphone's success here was mostly due to higher spending power (we can say for only $100 more I could get this) and the device being revolutionary at the time of launch.
What do the Android smartphones cost in China?