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 |  Wall Street Journal -
Nov-03-2009IPhone Gets Tepid Reception in China(topic overview)
CONTENTS:
- Priced on a somewhat higher side, the Wi-Fi-less China-specific iPhone, on the China Unicom carrier, will be available at a starting cost of 4,999 yuan, or $730 for the 8GB model. (More...)
- The company declined to confirm that. (More...)
- I've seen more knock-offs in all kinds of sizes for the past year during my travels to China. (More...)
- For the full story, see Wi-Fi-free iPhone officially lands in China on CNET News. (More...)
- Between gray market resellers, unauthorized carriers who sell devices brought in from Hong Kong and other countries, and individuals who bring the iPhone back from other countries themselves, it is estimated that there are already two-million devices already in use. (More...)
- There are gray-market iPhones that cost less, come unlocked and actually support WiFi. (More...)
- The site offers quick insight and sharp analysis from the wide network of Dow Jones reporters across Greater China, including Dow Jones Newswires' specialists and The Wall Street Journal's award-winning team. (More...)
- Drop us a line here, or on Twitter, @CSMHorizonsBlog. (More...)
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Priced on a somewhat higher side, the Wi-Fi-less China-specific iPhone, on the China Unicom carrier, will be available at a starting cost of 4,999 yuan, or $730 for the 8GB model. The price of the high-end iPhone 3GS for China will be 6,999 yuan or $1,024, without a service contract - that's how most Chinese buy their phones; as against the device's $800 cost in Hong Kong. In its report on the China debut of the iPhone, The Wall Street Journal (WSJ) said that the high price of the handset might be a "buzz-killer." Other than the cost of the handset, another drawback in the Unicom's iPhone for China is its lack of Wi-Fi capability which, in a country that has an exceedingly high demand for Wi-Fi devices, might dent the device's sale in the country. [1] Apple removed Wi-Fi from the iPhone for China to comply with the country's regulatory demands, another strike against the phone compared to gray-market versions. "It's unfair that the phone has no Wi-Fi," said a 30-year-old male surnamed Fan as he looked at an iPhone in the Beijing Apple Store, where sales also launched Friday night. China Unicom has said any handset that supports its 3G mobile standard will be able to use its network, so gray-market iPhone users will be able to buy service contracts just like users of the official handset.[2] Apple first held talks with China Mobile in 2007 to introduce iPhone on the mainland. It later turned to China Unicom, which adopted the 3G standard that Apple's iPhone 3G and iPhone 3GS are compatible with. Experts said China's ban on the WiFi function in cellphones, the amount of handset subsidy, and Apple's insistence on running its store in China were the major obstacles that had kept iPhones out until Friday. China Unicom wished the stylish handset to boost its 3G service, launched earlier this year, and help attract elite users from rival China Mobile.[3]
Apple signed a three-year deal with China Unicom on Aug. 28 to sell the iPhone in China, hoping to tap into China's 710 million mobile phone users. At that time, the carrier said it planned to grow through more services and place more emphasis on 3G business. Last week, the company said its profit fell in the third quarter as it looks to build the expensive 3G networks using the WCDMA standard to support the iPhone.[4] Signing a three-year non-exclusive deal to sell Apple's ( AAPL.O ) popular iPhone will help the company's 3G launch, but the iconic handset is expensively priced and may eventually require more subsidies to achieve wider acceptance. Unicom said on Friday that its third quarter net profit fell to 2.72 billion yuan ($398 million) based on Reuters calculations using data from the company's website. That performance comes with Unicom a different company from what it was last year when Beijing restructured the industry, aiming to increase competition and nurture a domestic 3G standard. Unicom is integrating a fixed-line network it absorbed in the revamp, while also building a 3G network after selling its CDMA mobile network to China Telecom.[5]
Specifically, while a special retail launch event held on Friday night saw around a hundred expectant Apple fans eager to welcome the iconic touch-screen handset, the smartphone's reception was considerably tame when compared to the thousands of buyers that have turned out to meet it in other territories. By bringing its iPhone to the Chinese market through telecommunications giant China Unicom, Cupertino-based gadget maker Apple is clearly hoping to tap into the 700 million handset users spread across the world's biggest mobile phone market. In terms of expectation, China Unicom has indicated that its three-year carriage deal with Apple should result in handset sales of around five million. A recent Sina online poll of 70,000 consumers in China revealed that only 11.7 percent were weighing up an iPhone purchase, while a whopping 90 percent thought the smartphone lay beyond their means.[6] Neither Apple nor China Unicom is saying how many iPhones were sold during the first few days of availability in China, according to a Wall Street Journal story. It is known, however, that there are 710 million mobile phone users in China, each of which can be seen as a potential iPhone user. That makes the Chinese market important to the continued growth of Apple's smartphone platform. If the iPhone does not take off in China, Apple may have a harder time hitting their sales numbers in 2010.[7]
Apple COO Tim Cook and CFO Peter Oppenheimer gave a preview of the deal in last month???s quarterly financials conference call, saying that plans would range between $18 per month and $85 to $100 a month with the phone itself becoming cheaper with more expensive plans. Of course, this isn'''t really the first time the iPhone has appeared in China. The device has been available in Hong Kong and Macau, two of China'''s special administrative regions, since 2008, and both those areas and shipments from abroad have contributed to a burgeoning gray market for iPhones. The Wall Street Journal on Friday called the iPhone'''s reception '''lukewarm''' due in part to these reasons, reporting that the meager crowd at Apple'''s Beijing store seemed less than enthusiastic and that retail locations had plenty of the phone in stock. Another possible reason for the iPhone'''s underwhelming debut is a thorny issue that goes by the apparently innocuous acronym WAPI. The Chinese government has been promulgating its own wireless networking standard, which critics suggest can be used to track users''' network usage as well as enforce China'''s notorious censorship practices.[8] No Wi-Fi The Inquirer's Nick Farrell blames the Chinese government's temporary ban on Wi-Fi wireless Internet connections and Apple's submission to it, which left the company with thousands of first-run models lacking Wi-Fi. The alternative state-sponsored Chinese wireless network costs users much more, as Farrell explains: "An Iphone without WiFi is one where you have to use the phone company for all functions and therefore incur a higher phone bill'''The feeling will be that if Americian capitalists provide things for Californians they should also provide them for the Chinese. With China such a big market tinkering with the WiFi should have been no big deal."[9] The Gray Market Many bloggers, including ComputerWorld's Seth Weintraub, point to the fact that the iPhone has already been available in China since early 2008 in a quasi-legal state. That's when Hutchison Telecom partnered with Apple to sell the iPhone in the special administrative regions of Hong Kong and Macau. Even before that deal was struck, wholly illegal, "unlocked" iPhones (i.e. those hacked to accommodate other mobile networks besides the officially licensed ones) proliferated throughout the country's robust electronics black market. As Weintraub notes, possessing Wi-Fi capabilities and available at a lower cost than their legal counterparts, the gray market iphones are simply the better bargain: "So Apple might have already finally met its match in when it comes to Chinese competition. from other iPhones."[9]
Grey market iPhones with Wi-Fi have been spotted in China's shops at prices as low as $587. China Unicom is allowing all iPhones that support its network to buy a service plan. The deal with China Unicom is not exclusive to its 143 million customers. China Mobile is still in talks with Apple to bring the iPhone to its network of 580 million subscribers.[10] Apple's deal with China Unicom is non-exclusive and China Mobile, another local carrier, has said it is in ongoing talks with Apple about offering the iPhone.[2] As expected, China Unicom, the country's second largest telecom operator after China Mobile, is selling two versions of the iPhone in China under a three-year deal with Apple.[11]
"Ever since we first launched the iPhone, we greatly anticipated bringing it to China," said Greg Joswiak, Apple's vice president of iPod and iPhone Product Marketing at the Beijing launch ceremony. China Unicom will stock the iPhone, hoping it will boost its profile against telecom rival China Mobile.[12] As the first handset to support China Mobile's 3G network, Lenovo Mobile O1, dubbed the iPhone killer, is expected to be one of the most important products that would help China Mobile fend off competition from China Unicom. Although China Mobile has a dominant position in China's 2G market, its advantage has been challenged in the 3G segment.[13]
The world's largest cellphone operator now seems likely to lose the numero uno status for launching the first 3G handsets. Even as the second largest carrier China Unicom plans to launch the much talked about iPhone today, China Mobile has delayed the launch of its first 3G Ophone, the Lenovo Mobile O1.[13] The acquisition of the iPhone will help in China Unicom'''s 3G launch, but the iconic handset is priced expensively and may need further subsidising. China Mobile, China'''s number one carrier along with China Telecom have both reported disappointing earnings.[14]
China Mobile's TD-SCDMA standard has got less support from handset vendors than the WCDMA standard that China Unicom has adopted. During the past few months, China Unicom has aggressively pushed its 3G service and introduced Apple's popular iPhone, which has a huge fan base in the world's largest mobile population.[13] Apple's local service provider, China Unicom, hopes the iPhone will give it an edge against rival network, China Mobile. Liu Xinling, Iphone Customer, said, "I've always liked this mobile phone and I've always thought of buying it. I think this phone is very good and it is definitely worth the wait."[15] Although China Unicom is much smaller than China Mobile, Unicom actually has some 3G networks up and running while China Mobile is behind in that regard. As far as lacking wi-fi, no one has really gave an explanation for the handicap, but with all the iPhones available on the gray market, the people who want wi-fi will get their phone there.[16]
The phones are more expensive than in neighboring Hong Kong, and depending on the monthly price plan and China Unicom'''s complex subsidy rules more expensive that the U.S. versions. They are also more expensive than their grey market versions'''that is, iPhones (with Wi-Fi intact) brought into the country and sold unlocked'''and run anywhere from $440-$840. If anyone is happy with the price its Li Haiwei, who owns a Beijing store that unofficially sells the devices. Li told the WSJ that he sells four to five grey market iPhones a day, and expects to sell more to consumers fleeing the sticker shock of Unicom'''s prices.[17] Adding insult to injury is the fact that the iPhone is manufactured in China." Too Pricey Alex Wilhelm acknowledges that the absence of Wi-Fi on the first line of iPhones released certainly is a mitigating factor in their comparatively low-sales thus far, but says that the real issue Chinese consumers have with the device is its indefensibly inflated cost: "It would seem that the largest and most constant miff with the device is its high price. The phone costs a stunning $1000 dollars without a contract in China, a stiff price increase over the $600 that the phone costs in the United States unsubsidized'''That high price combined with the current economic state of the world, and crippled connectivity have turned what could have been the biggest launch of the iPhone so far, into a flop."[9] The phone costs a stunning $1000 dollars without a contract in China, a stiff price increase over the $600 that the phone costs in the United States unsubsidized. That high price combined with the current economic state of the world, and crippled connectivity have turned what could have been the biggest launch of the iPhone so far, into a flop. Of course, Apple could turn this around by cutting prices, and promising to get the WiFi''working, but those measures would take time.[18]
One likely problem is that Apple is competing with themselves in China. It is estimated that there are already a couple of million iPhones in use in China, all of which were purchased on the black or gray markets, unlocked, jailbroken, and brought in from Hong Kong or elsewhere. It is possible, therefore, that the Chinese citizens that wanted an iPhone the most already have one. There is also the fact that the '''official''' Chinese iPhone does not have WiFi, a difference negotiated by the Chinese government to help them control Web access inside China. Perhaps consumers in China are not happy with paying high prices for a hamstrung iPhone, missing one important capability that their black market counterparts offer. It will be interesting to see if sales pick up now that the official version of the phone is readily available, or if they remain flat.[7] There are a couple of grave obstacles in the way: high prices and the lack of crucial features like Wi-Fi capability on the Unicom'''s iPhone in China. Blame it on the Chinese government regulations that put a ban on Wi-Fi earlier this year. China did relax its ban last spring, but unfortunately till then Unicom'''s iPhone had already gone into the production stage in accordance with the previous laws of the country. This, no doubt, is bad news for the lovers of smartphones who would love to get their hands on the Apple'''s iPhone.[19] The Chinese government had initially insisted Apple remove Wi-Fi functionality from the device. By the time the government changed its mind earlier this year, the iPhone had already gone into production, as MacRumors reports. The iPhone doesn't have it on its introduction. It also comes in at a high price of $730 to $1025 (when converted from yuan to U.S. dollars), which is 20 percent higher than what unlocked iPhone 3GS models with Wi-Fi are selling for in Chinese street markets.[20]
The first being that the iPhone in China doesn't have Wi-Fi, and the second would be the pricing scheme, as the 8GB iPhone 3G would set you back about $732, and the 32GB 3GS will set you back about $1,025, certainly not lunch money. Of course, for those prices, folks could always go source for gray-market iPhone models, so it will be interesting to see how things work out for Apple and China Unicom.[21] Apple and China Unicom also face the challenge of cost for the iPhone, reportedly $750 to $1,000 through the companies, while more than 2 million iPhones have been brought into China for much less from other countries, according to the Journal. Hampering Apple's efforts in China is the fact that its initial offering won't include Wi-Fi features, according to the Shanghai Daily. China Unicom last week released a survey of its WCDMA signal quality, which showed that only 30 cities now meet the company's ideal standards.[4] China Unicom is expecting to sell 5 million official iPhones over the next three years. The company expects that its next generation iPhone models will include Wi-Fi.[10] The sale of the iPhone officially kicks off in 285 cities and China Unicom expects to sell at least 5 million devices in the next three years - a figure the company is not willing to confirm yet.[22] The device itself is as awesome as ever. It's the disabled Wi-Fi and the ridiculous pricing that will drive people away.'' According to reports, China Unicom is hoping to offer Wi-Fi enabled iPhones by early next year - I would think so! It can't have been cheap to get those iPhones onto shelves, and Unicom could easily find itself scuppered by the extremely consumer-unfriendly conditions it is being forced to sell the iPhone under.[23]
In Hong Kong, people pay about $1,300 through Hutchison Telecom for a similar package. IPhone users in the U.S. and Hong Kong pay less for iPhones ''' and their devices include Wi-Fi wireless Internet capability, which Unicom said its iPhone won'''t have. Unicom is subsidizing its iPhones for users who commit to service packages. How valuable those subsidies are depends on how you value 3G service vs. Wi-Fi, and how you spread the costs. Cynthia Meng, an analyst at Bank of America Merrill Lynch, says the Unicom iPhones will cost between 32% and 59% more than their gray-market counterparts. If you wrap in the cost of the service packages over two years and the subsidies that come with that, she says, buyers of a Unicom iPhone can pay 10% to 27% less over those 24 months than consumers who buy gray-market 3G iPhones and subscribe to Unicom'''s monthly service (the difference in discount depends on the model and the level of service package).[24] The lack of Wi-Fi could have a big impact on the cost equation. Users who buy gray-market iPhones with Wi-Fi, and subscribe to China Mobile'''s slower-but-cheaper GSM service (the iPhone isn't compatible with China Mobile's 3G network), won'''t have high-speed service when they'''re in a taxi or sitting outside. They would have it a lot of the time ''' when they'''re in a Wi-Fi equipped home, office, coffee shop, etc., where it'''s generally free.[24]
The 8GB iPhone 3G will cost $732, with the 32GB iPhone 3GS commanding a $1,025 price tag. Now, considering how all that hard-earned cash will only buy a China Unicom iPhone that lacks WiFi support, it's hard to see the handset making it big in China.[25] Ars Technica reports that the average selling price of smartphone devices in China is around 2,250 Chinese yuan (approx. $330 USD), while China Unicom is offering the iPhone (without a contract) for between 6,000 CNY ($878 USD) and 8,000 CNY ($1,170 USD).[6] Chinese shoppers can find cracked gray-market iPhones for around 4,000 yuan (US$587) at many local electronics markets, while the cheapest iPhone being sold by China Unicom costs 4,999 yuan with no service contract. Nokia has finally decided to kill off its N-Gage gaming platform after years of shifting the strategy behind it with little success.[26]
The 8-gig Unicom iPhone 3G will be sold for 5,880 yuan, or $861; the 32-gig model will go for the equivalent of more than $1,000. Why are the prices so high? Well, those figures apply to handsets sold without any sort of contract, which is the way many Chinese citizens purchase their phones.[27] Unicom'''s price for a the 8GB model starts from 4,999 Yuan ($730) and the price of the high-end iPhone 3GS will be 6,999 Yuan ($1,024), without a service contract.[19]
China Unicom is selling the 32GB iPhone 3GS with no contract for the equivalent of $1,026, compared to about $800 in nearby Hong Kong.[2] China Unicom, the second largest carrier in the nation began selling the phone on Friday, and has two models available, 8GB and 32GB. Each model can be purchased with 3-year contract but the prices are very expensive, even for an Apple device.[28] There were hundreds of people in attendance at an unveiling party hosted by by China Unicom, the only current seller of the iPhone in China. That reception, however, seemed distinctly lukewarm when compared to the introduction of the iPhone in other markets or even to the introduction of a new iPhone model in the United States. Given the gigantic size of the Chinese cell phone marketplace, surely the largest in the world, this lack of enthusiasm could be seen as surprising.[7] We wrote about the price issue in today'''s Journal, but here'''s a more detailed breakdown of what prospective Chinese iPhone buyers are looking at: China Unicom is offering three models of the iPhone.[24]
One can observe a booming market for WiFi friendly Iphones in the local Chinese markets. Moreover a huge part of the things are taken from foreign countries as they are cheaper and there are second-hand models that are half of the price. It has always been a problem for Apple to sell its gadgets in such countries as China. There is no difference in prices for its techno-toys if compare them in Russia and the U.S. that is considered to be the technology press for Russia. It became known about the delay of the Iphone release because the Chinese were not ready to give huge wages of cash to Apple as it was with the Western telecoms.[29] Chinese telecom operator China Unicom has announced that it will formally start to sell Apple's iPhone 3G and iPhone 3GS handsets in mainland China starting today.[27] China Unicom rolled out Chinese editions of the iPhone 3G and iPhone 3GS ''' the first of Apple's best-selling devices to hit the world's most populous country.[27] At long last, citizens of the world'''s most populous country can buy iPhones on their own shores, as the device went on sale in China over the weekend. Though, Apple struck an agreement with the country's other provider, China Unicom (which, to this day, I faithfully misread as '''China Unicorn''').[8]
In the meantime, many analysts worry that the lack of Wi-Fi could slow sales of the first Unicom iPhones. "There's going to be a perception that the phone they have is dumbed down from the one that somebody has in California," Duncan Clark, chairman of BDA China Ltd., a Beijing-based technology research firm, told the AP. "We've seen before that Chinese consumers don't like to be treated like second-class citizens." Here in the U.S., Apple has enjoyed solid sales of both the 3G and the 3GS. As we reported earlier this month, Apple recently rolled out an update to the iPhone operating system, which it says will improve performance on the best-selling phone.[27] The iPhone officially went on sale yesterday from China’s Unicom.'' While they lacked the same frenzied fans as the U.S. that was during the initial Gen 1 launch a few lines did form leaving queued customers in the rain for up to 7 hours.'' The first owner of an official iPhone in China they've long been available on the gray market is Zhi Xianzhong.[30] BEIJING, Oct.31 (Xinhua) -- China Unicom, the country's second largest telecom operator, is expecting a big rise in its subscriber number after it launched the country's first official sales of iPhone Friday night.[31] BEIJING, Oct 30 (Reuters) - China Unicom ( 0762.HK ), the country's No. 2 mobile carrier, said third quarter profit fell 11 percent from the previous quarter, as competition heats up in China's recently overhauled telecoms sector. Unicom said on Friday its net profit in the July-September period totalled 2.72 billion yuan ($398 million), based on Reuters calculations using data from the company's website. The drop comes after its second quarter earnings fell 14.6 percent from the first three months of the year. Comparisons with last year are difficult as Unicom is a vastly different company now after an industry-wide revamp that saw it combined with another company to take on its current form.[32] Up until the end of September, China Unicom has 140 million subscribers, much less than China's Mobile's 500 million. Net profit of China Unicom hit 3.1 billion yuan (453.8 million U.S. dollars) in the first nine months this year, according to the company's Q3 report released late Friday. Its Q3 profit stood at 909 million yuan, however the company failed to provide the year on year ratio due to different comparable bases.[31]
Analysts Saturday estimated the monthly rise to be 1.8 million in November, a sharp increase from September's 935,000. Unicom started selling iPhones equipped with 3G service in 285 Chinese cities on Saturday, hoping it will give an edge against its rival China Mobile, the world's biggest phone company by subscribers.[31] Wang Yuquan, a senior consultant at research firm Frost Sullivan, said compared with the competition between iPhone and Ophone, the biggest challenge actually comes from the smuggled handsets. "For starters, China Mobile cannot make the Ophone as cheap as its current 2G handsets while China Unicom is not willing to reduce the iPhone pricing," he said. "In addition, considering both China Mobile and China Unicom made compromises on the Ophone and iPhone such as WiFi functions and the App store, I think the winner is likely to be the'smuggled phone'."[13] As expected, iPhone'''s official carrier is China Unicom, the country'''s second largest telecom operator after China Mobile.[19] "But the success of Ophone is critical to China Mobile, which means it has to be affordable," Pang said. China Unicom, the country's second-largest mobile operator by subscribers, said earlier this month that it would offer eight iPhone subscription packages costing between 126 and 886 yuan a month.[13]
We believe that our customers will have an excellent user experience and the iPhone will have good prospects in the market." Analysts fear the iPhone's higher-than-expected price tag could hinder its reception in China. Unicom's prices for its 32-gigabyte iPhone 3GS range from 4,999 yuan to 6,999 yuan for the high-end. China Mobile has launched its own brand Ophone.[15]
Mr. Yu is using the phone with China Unicom's 3G service already. "There's no reason to be charging these prices if it doesn't have Wi-Fi," he said. Zhang Dangfeng, a college student, currently uses a Nokia smart phone and said he wanted an iPhone but couldn't justify buying one if the gray-market version is cheaper. Yang He, another existing iPhone user, said he purchased his in Hong Kong. "They shouldn't be charging so much if it doesn't have Wi-Fi.[16] At China Unicom's outdoor event, several hundred people lined up to be first to buy the phone. Several said they'd held out for years to buy it because they worried there would be quality problems if they purchased gray-market iPhones. "The price is a little high, but we don't care," said one woman who lined up for over an hour to buy a 16 gigabyte iPhone with her boyfriend who was shivering in the cold.[16] A few hundred people lined up in the rain and cold outside The Place shopping centre in Beijing, where Zhi Xianzhong became the first person to get the iPhone from Apple partner China Unicom after waiting seven hours and 40 minutes, according to China Daily.[11] The 32-year-old became the first person to get the iPhone from China Unicom, Apple's partner, at 7 pm after weathering the cold and rain for 7 hours and 40 minutes. The handset, which Zhi said would be a gift for his wife, came with a certificate. Liu Xinling, 25, too got a certificate from China Unicom, for she was the first to book a handset online at 00:02 am on Oct 1. "I kept refreshing the Unicom website continually before logging on to book the handset," she said.[3] The iPhone appeared to get a slow start in China on Friday night as China Unicom and Apple held a launch event largely free of the buzz and long buyer lines that have accompanied launches of the handset elsewhere.[26] Kind of a curious story in this morning's Wall Street Journal about the launch of the Apple (AAPL) iPhone with China Unicom (CHU) in mainland China.[33] China Unicom ( CHU ) may have gotten a bad rap for its lackluster iPhone announcement this week, but its launch upstaged the event at the Apple ( AAPL ) store.[16] The iPhone'''s star power could draw crowds to the launch events tonight ''' which are being held separately by Apple ( AAPL ) and China Unicom ( CHU ) in Beijing.[24]
The iPhone officially launched in China late Friday, and was met with to unusually small buzz and excitement. Authorized stores selling the smart phone, including the Apple store in Beijing, its only location in China, sold few devices over the weekend. For those of us in North America, the reception seems at odds with our experience of an iPhone launch. This seems especially so for such a tech-loving country, whose mobile market measures in at 710-million subscribers--the largest of any country.[34] The lines for the iPhone went quickly, with many Apple users milling around but not as many intending to purchase the device as at the Unicom event, where everyone waiting in line outside had the intent to buy one. One customer in the store, Peter Yu, said he went to the launch to see the activities but not to buy a phone. "I already have one," he said, holding up a black iPhone he purchased in Australia because it had Wi-Fi.[16]
Unicom'''s iPhone will be competing with the rival carrier China Mobile'''s forthcoming new device, scheduled to launch somewhere around next year.[19] Last week, rivals China Mobile ( 0941.HK ), the world's No.1 mobile carrier, and China Telecom ( 0728.HK ) also reported disappointing earnings. Unicom is building its 3G network with the world's most mature standard, WCDMA, but is struggling to integrate new businesses after last year's industry shakeup that saw it combined with another company to take on its current form.[5]
The price isn't that different than getting one overseas. What's the incentive?" he said. Mr. Yang uses his iPhone on China Mobile's 2G network and says he has no plans to get a 3G plan with Unicom.[16]
Around 1.5 to 2 million people already own Wi-Fi enabled iPhone in China, thanks to the gray markets over there. It is quite likely that iPhone takes off in China and gray markets, too, starts making some serious money on the basis of Wi-Fi sales. That definitely will put a dent in Unicom'''s sales. To combat this situation, Unicom says that it plans to add Wi-Fi capability for the iPhone'''s next line, but still there'''s no word on when exactly that will happen. Analysts are of the view that iPhone'''s higher price tag could hinder its reception in China.[19] The Chinese response to the''introduction of the iPhone was muted. The Wall Street Journal reports that ''iPhone sales in China may be slow, at least compared to those in the U.S. Among the reasons are a retail price that can be over $1,000 and the fact that two million iPhones has already been sold through unauthorized dealers.[35]
For the first time, the Jesus Phone seems not to be storming the burning fields. Of course, the iPhone in China has been crippled, having its WiFi removed. This was of course due to a Chinese government ''restriction on standards, which could change in the future. It would seem that the largest and most constant miff with the device is its high price.[18] In accordance with Chinese government regulations, iPhones in China also lack Wi-Fi capability - a key feature which unsettled many Chinese users who were eager to purchase a genuine iPhone. According to the China Daily, Li Liang, 25, bought an iPhone even though he was not happy that the official handset was not equipped with WiFi.[22] With a price tag of $730-$1,020, the official iPhone is significantly more expensive than the gray market or any other market in the world--almost twice as much in some cases. And, as though these weren't enough hurdles for Apple to overcome, in order to comply with Chinese government regulations, Wi-Fi capabilities, which allow users to surf the web and download emails free from any hotspot, were disabled.[34]
The Chinese Government At GigaOm, Sebastian Rupley says that the high price of Apple products hasn't been a deterrent before, so that shouldn't be the company's main concern when hocking the iPhone to the Chinese. He believes that the most difficult part with be overcoming the government's tight control over telecommunications, particularly with regards to Apple's free-wheeling applications store: "In the U.S. market and elsewhere, great applications are driving the iPhone'''s rapidly increasing adoption.[9]
The Apple (NSQD: AAPL) iPhone finally hit the store shelves in China for the first time Friday night with huge fanfare--though nowhere near the crowd it pulled in U.S. at the launch of the first iPhone--and eager media members and the industry analysts.[19] "Ever since we first launched the iPhone, we greatly anticipated bringing it to China," said Greg Joswiak, Apple's vice president of iPod and iPhone marketing, in a speech at the launch. "We plan on actively marketing the iPhone here," he said before a large screen played an iPhone commercial that will air in China.[2]
Friday saw the formal launch of the Apple iPhone in the world's biggest mobile phone market - China.[1] The iPhone'''s launch in China has met with a '''lukewarm''' response, according to the WSJ.com, not much of a surprise given the sky high price tag, lack of Wi-Fi functionality and grey market alternatives. Though the phone was able to attract a crowd of '''hundreds,''' it seems not many of them actually bought the phone, priced between $730-$1,024 depending on the model.[17] Noted in the piece: the large number of gray market iPhones - an estimated 2 million - already in service in China, as well as the relatively high prices for the phones, $730 to $1,020 before discounts.[33]
It'''ll be up to users to decide whether 3G is worth it or not. Either way, the 7,999 yuan price tag makes the 32-gigabyte iPhone 3GS one of, if not the, most expensive 3G handset in China amid scores of handsets from Nokia, dopod, LG, Sharp and others'''and that doesn'''t count the yet-to-be-released-for-China Android phones that have already started hitting the gray market.[24] An iPhone 3GS handset (without connection) costs 4,999 yuan ($733), more than half of the country's per capita urban disposable income, and about 25 percent more than what it sells for in Hong Kong. The high price did not scare away iPhone fans, who love the gadget for its "creative functions, breathtaking design and faster speed".[3] The iPhone 3GS costs about $732.59 or 5,000 Yuan without a contract. It is not much cheaper with a contract.[36]
Not even counting the contract, prices for the iPhone go from over $730 for the 8GB model to over $1,000 for the 32GB! There are some discounts depending on the contract you get, but for many consumers the price of the phone represents months and months of savings.[23] Prices range from 4,999 yuan (about $732) for the 8GB 3G model to 6,999 yuan (about $1,025) for the 32GB 3GS phone (sans contract).[22] Price for the handset with a 3 year, yes 3 year contract starts at 4,999 yuan (about $732) for the 8GB 3G model or 6,999 yuan (about $1,025) for the 32GB 3GS version.''[30]
For the 32-gigabyte model on Unicom'''s most expensive data plan, that translates to paying over 21,000 yuan ($3,076) over two years for phone and service.[24] China Unicom is offering 8 levels of third-generation wireless service packages, ranging from 126 yuan ($18) a month to 886 yuan ($130) a month, which will allow users to download data at higher speeds and run applications like streaming video.[24] As for the voice service, the Wall Street Journal reports that "China Unicom is offering 8 levels of third-generation wireless service packages, ranging from 126 yuan ($18) a month to 886 yuan ($130) a month."[27]
The company declined to confirm that. Song Limei, Deputy General Manager, Personal Comm. Dept., China Unicom, said, "We not only provide the hardware such as mobile phones, but we also provide our customers with all-round after-sales support and a full support system for the Iphone. This is an all-round service. [15] Apple's local partner, China Unicom, hopes the sleek smartphone will give it an edge against giant rival China Mobile, the world's biggest phone company by subscribers.[37]
Duncan Clark, chairman of Beijing-based technology research firm BDA China, told AP that the Chinese market will respond angrily to Western imperialistic behaviour. The feeling will be that if Americian capitalists provide things for Californians they should also provide them for the Chinese. With China such a big market tinkering with the WiFi should have been no big deal. The other problem Apple has is that its deal with mobile operator China Unicom makes the gadget even more expensive.[38] China Unicom, the country's second-largest carrier and the first telecoms group to make a distribution deal with Apple in China, threw an all-night celebration to mark the event.[39]
After a long back and forth, the Apple iPhone is now on sale in China via carrier China Unicom.[36] 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. The crowd seemed subdued compared with the thousands who turned up at stores when the iPhone was introduced in markets such as the.[40] The iPhone has made its official debut in China to a rather lukewarm reception with no signs of the type of '''sellout''' receptions seen in other countries reports an article over on the WSJ. Apparently hundreds did attend the China Unicom iPhone debut party on Friday night at a Beijing shopping centre, but no where near the thousands seen when the iPhone made its debut in the U.S. or even Japan, and by Saturday night Beijing stores still had iPhone stock available.[41] The piece noted that the phones were in stock in stores around Beijing as of Sunday night. The story said that a manager at a China Unicom store in Beijing said Sunday that his store sold ten iPhones on Saturday but only one on Sunday.[33]
After months of speculation, China Unicom confirmed it would be selling the iPhone in August. The first hint that prices might not be all that great came in late September, when Unicom announced release dates and some pricing info for the device - and even back then they didn’t look good.[23] The iPhone was officially released in China on the China Unicom network October 30th. They had a big launch party but reception for the device itself was considered tepid compared with other iPhone launches in other countries around the world.[42] The land of dim sum and stubborn Communist politics has become the latest country to launch the iPhone. As expected, the iPhone is now ready to cater to the single-largest wireless market, by way of China Unicom's network (China's No. 2 wireless network).[25]
A China Unicom representative declined to say how many buyers had reserved iPhones, which could be picked up at the launch event.[2]
China Unicom Ltd., the state-owned carrier authorized to sell the iPhone, has set prices high.[34] Wang Yan, general manager of Lenovo Mobile, confirmed to China Daily yesterday that the carrier has deferred the online purchase of the 3G Ophone, which was originally sold at 4,999 yuan, the same as China Unicom's iPhone.[13] Google is your friend! Engadget.com reported that the price of the iPhone on China Unicom would be about 5000 yuan or ~$750.[16]
Compared to the under-$200 iPhone clones, it'll wage a losing battle in the cheapo market. It's not just the clones as unofficial iPhones are available for half the official price at Unicom ($440 to $840). It will also be interesting to note that the iPhone will not have WiFi connectivity in China.[43] Buying an iPhone from the black market is clearly a better deal for the average person in China. Not only are they hundreds of dollars less than buying from Apple/Unicom, they include WiFi! People in China are generally conservative, cost-concious, and apparently aren't going to fall for unnecessary higher prices just to get ripped-off.[24]
The irony is that the iPhone is manufactured in China added to it; you have to pay to connect to the internet, with WI-FI you could get it free at times. Good news is that this could just be a temporary, initial hic-cup that the Chinese will have to deal with.[44] As far as Wi-Fi, the Chinese government was insisting on a competing technology when the iPhone models destined for the country went into production. Therefore the devices have no Wi-Fi capabilities even though China has since relaxed its regulations.[10] On a cold October's eve.I truly doubt that the brand of consumerism that is practiced and perfected in the U.S. and Japan was going to be in evidence in China. Unfortunately, as noted, the Chinese government screwed Apple by first banning then approving WIFI. Why not just scrap the entire deal and ship them back and equip them with WIFI? That would be the easiest way to deal with the situation.[33] The Apple iPhone will be available in China for the first time outside the black market but without its key WiFi feature, which has allows iPhone users in other countries to tap into free wireless networks in cafes and other venues to download e-mail and iPhone applications.[12] A poor reception in China could be the first setback of any significance for the iPhone. It has already sold 34 million units worldwide and is widely viewed as Apple's next flagship product, particularly now that iPod sales have begun to slow.[35] The iPhone went on sale there last Friday exclusively from the second largest operator, China Unicom.[23] A woman holds up an iPhone 3GS handset at the China UniCom business hall on Thursday.[27]
The Chinese have been importing unlocked, wifi added phones for ages and there is absolutely no reason for the great unwashed to pay huge amounts of cash for a phone that can do less. Analysts say that punters will be cross at Apple for treating them like second class customers while still managing to charge them more than they can afford. Unicom claims that the outfit it's iPhone package does not just include the handset but post-sales support and a whole package of services, but it is unlikely that line of reasoning will work with the cash strapped Chinese.[37] The lack of WiFi means Unicom iPhone customers will have to pay to connect to the phone network for every function and could lead to expensive phone bills. Not only that are they selling a dumbed down phone, but Apple faces tough competition from itself.[37]
Apple has been selling grey market iPhones to the Chinese through the open iPhone sales in Hong Kong and neighboring countries. What's more, these grey market iPhones are better equipped than the official Apple phones.[45] Tonight we get a first glimpse of whether Chinese cell phone users bite when the iPhone (finally) officially goes on sale here.[24]
However Chinese buyers, who have to save up for months to buy the gizmo, were shocked to discover it had no WiFi. China wanted the makers of smartphones to use its WiFi standard, but Jobs' Mob said that if the gear had not been approved by Steve then it was not going into the Iphone. Beijing later changed its mind but it was too late for the Chinese release, so the first wave of Iphones without WiFi has gone out.[38] China suggested to the manufactures of smartphones to uphold the WiFi standard but according to Jobs' Mob the gadget was not considered to be the Iphone as it had not been approved by Steve.[29]
''Until recently, the iPhones weren't allowed to have Wifi in China so that's been stripped out (strangely, the ability to have Wifi has been reinstated, and so Apple will need to sell the ones without Wifi that it has already produced).[45] Already the iPhone launch in China has been delayed because Apple was insisting that the carriers pay it huge amounts of money for the privilege of selling the gizmo.[37] Apple started selling its iPhone officially in the world's largest mobile market, China, on Friday.[11]
Despite the fact that Apple cooperates with mobile operator China Unicom, it offers high prices.[29] China'''s number two mobile phone carrier, China Unicom has announced a profit decline from the previous quarter and has said the trend could continue due to expensive 3G network building and intensified competition reports Reuters.[14] BEIJING, Oct 30 (Reuters) - China Unicom ( 0762.HK ), the country's No.2 mobile carrier, said profit declined from the previous quarter, a weakening trend that could continue as competition intensifies and expensive 3G networks are built.[5]
Each of the companies is large enough to bring out new handsets for the world's largest market and each has extensive relationship with the largest carriersChina Mobile (NYSE:CHL) and China Unicom (NYSE:CHU).[35]
One final tidbit that just blew my mind is that the WiFi radio has been disabled by China Unicom. This was done in order to comply with Chinese law. Most of us have no idea how it is to live under a government that attempts to control what you see to such a high degree. The internet is supposed to make information available to everyone everywhere, but China spends an inordinate amount of time and resources in filtering that data for its users. That's a shame. Maybe China should spend more time on protecting the intellectual property rights of companies doing business there rather than the thoughts of its citizens.[42] However Unicom's iPhones lack WiFi because it was temporarily banned by Beijing, which was promoting a rival Chinese system and Apple did not want to adapt.[37] Unicom's iPhones lack WiFi because it was temporarily banned by Beijing, which was promoting a rival Chinese system, according to BDA. The ban was relaxed in May after manufacturing had begun.[27]
According to The Wall Street Journal (WSL), the high prices of the iPhone might turn out to be a '''buzz-killer'''. Couple this with the lack of most important feature on iPhone i.e. Wi-Fi, Unicom'''s iPhone might end up having some serious handicap as compared to all the high-end smartphones sold in the Chinese gray market, and that too on cheaper rates.[19] How does one download the popular and addicting iPhone apps? Read on for more interesting stories about the Apple iPhone Chinese launch from the Wall Street Journal online at the link.[43] Robert Scoble/Flickr A few tech writers are congratulating themselves for predicting the disappointing debut of the iPhone in China on Friday. Many have linked to the various reports from The Wall Street Journal's Loretta Chao, who closely followed the run-up and launch of the product, which she says netted a "lukewarm" reception.[9]
Apparently there are a lot of gray-market devices already in China. The original iPhone came out in 2007 and not everyone waited two and a half years to get theirs. This would cause demand to be lower on a launch day as well.[42] Zhi Xianzhong is the first man in China to have bought an iPhone, according to the certificate he held up at the iPhone launch party held in one of Beijing's swankiest shopping malls.[39] In China's 3G-market arena, China Mobile has always been the front-runner. It was the first carrier to launch 3G services, the first to run an online application store, and the first to release its own mobile operating system.[13] Wang said since China Mobile had not yet finalized the final subsidy plan for the handset, it put on hold last week's plan to launch 3G Ophones.[13]
An estimated 1,000,000+ grey-market iPhones in China are running on China Mobile's EDGE 2G network.[45] Wang said the Lenovo Mobile O1 would be sold through China Mobile's own distribution channels in the first three months after the product is launched and the price could be as low as free, on condition that consumers choose specific subscription packages.[13] Subsequent traction might also be affected somewhat by the estimated two million iPhone handsets that have been smuggled into China since the popular smartphone first launched back in 2007 (for a price ranging between 3,700 CNY/$540 USD and 5,700 CNY/$835 USD).[6] The iPhone has just launched in China, to tepid demand, "subdued" sales, and high, high prices.[18] Although the reception to the iPhone going on sale in China was warm, the event does not seem to have engendered the sort of sellout reception that a new model iPhone introduction does in most markets.[7] The iPhones launched in China do not have the Wi-Fi feature, sounds strange? To most of us it does, however it'''s true. Unicorn is definitely squirming, since this could mean an absolutely low sales possibility.[44] "I don't really care about that function," said Zhang Yuan, a sales assistant for a distribution company who was also standing in line, referring to the Unicom iPhone's lack of Wi-Fi.[16] In a country of 1.3 billion, even modest sales should be good for Apple, and the fact that the company is in the market at all is an important strategic factor'''combined with India alone, it means that over a third of the world'''s population can now buy an iPhone.[8]
Nick how silly you have become with your hatred for Apple and Steve it must be hard to see the photos from China with hundreds lined up to buy the Iphone.[38] The deal was a long time coming but the iPhone has now officially been launched by Apple in China.[10] China Unicom is selling two versions of the Apple smartphone in China under a three-year deal with Apple.[19]
The piece noted that "hundreds of people braved cold and rain" to attend a Friday launch event thrown by China Unicom, but that "the crowd seemed subdued" compared to the "thousands who turned up at stores" when the phone arrived in the U.S. and Japan."[33] Crowds queued up for the phone many hours in advance at several locations ' although scenes did not quite match the frenzy of the first iPhone launch day in the US.[11] The launch, however, has put users of unauthorized iPhones in a dilemma. It is estimated that the mainland has 700,000 to 1 million unauthorized iPhone users, who smuggled the sets from overseas. Wang Hongliang is glad that she resisted buying a pirated set. "An unauthorized set has no guarantee of after-purchase service, and you need to re-install its system from time to time, so I waited for the official one," she said. Some fans are considering giving up their unauthorized phones and buying a "real" one because it has all the functions, Huang Luxia, a 25-year-old white-collar worker, said.[3] BEIJINGApple 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.[40]
The launch of iPhone in the Chinese market will sure heat up the ongoing smartphone war in the world'''s largest mobile device market.[19]
The release of the Iphone in China was delayed because Apple found that the Chinese were not bending over backwards to give Apple huge wodges of cash like the Western telecoms have done.[38] Customers take a close look at the Apple iPhone which is officially launched in mainland China at the apple store in Beijing, China, Friday.[46] Many Beijing stores still had iPhones in stock Sunday night, according to The Wall Street Journal, and crowds were more subdued when compared to the mania that led to sold-out locations when the Apple device was introduced in the U.S. and Japan.[4]
The Apple store, Apple's only one in China, attracted overnight crowds including Beijing Mac user groups who waited in line to get a traditional first peek at the store.[16]
The mobile device, which has been available for years through unofficial channels in China, will finally be accessible to millions of users in one of the world's largest mobile phone markets. You are currently not logged into this site.[46] China is the world's largest mobile phone market and crowds of shoppers eagerly answered the call to buy Apple's newest gadget.[15] In the land of 710 mobile phone subscribers, Apple ( NSDQ: AAPL ), like other mobile handset makers, see China as an important market, which makes the pricing of the phones difficult to understand.[17]
According to the Inquirer, the lack of Wi-Fi support for the device is caused by a disagreement between Apple and China over different standards - with Apple refusing to place non-Western standard equipment in the phones.[23] WHEN wil he learn to do research. The problem is down to the Chinese insistence that any mobile phone with WiFi MUST use their WAPI encryption standard. What's the problem with that you ask? They won't tell anyone outside of China what that protocol consists of.[38] The Chinese might as well buy 3GS phones manufactured in China which would obviously be much lighter on the pockets and that too just for $835.[44] It'''s an important feature, and paying 4,999 yuan ($730) to 6,999 yuan ($1,025) for the iPhone might be too much for the Chinese who can buy the regular 3GS with WiFi on the black market for about $835.[9] Although most people would agree that having your iPhone powered with Wi-Fi is not mandatory, for 4,999 Yuan ($750) to 6,999 Yuan ($1,025) it is a bit to steep for a phone with normal features.[44] Without being bundled with a service package, the phones will go for 4,999 yuan ($732, for the 8-gigabyte iPhone 3G), 5,880 yuan ($861, 16-gigabyte 3GS), and 6,999 yuan ($1,025, 32-gigabyte 3GS).[24]
I've seen more knock-offs in all kinds of sizes for the past year during my travels to China. My last hired driver had a mini-iPhone that he paid $100 U.S. for. Everyone I met thought it was hilarious that they were already knocking off the iPhone. [26] Anyone who'''s wanted an iPhone has already gotten there'''s in the last year or so. They'''ve been selling here ever since the first ones rolled off the production lines in the USA. Tons of people have been offering iPhones originally meant for the U.S., Hong Kong or Italian markets, all '''jailbroken''', and tons have been buying them.[26]
Some news reports say Unicom hopes to sell 5 million iPhones in three years.[15] The problem is that China, along with Japan and other countries in Asia, have some of the most advanced phones in the world (much more so than iphones), which explains why iphones don't sell well over there.[45] A store in Beijing reported a total of 11 phones being sold over the weekend. You can't sell people crap, even if it's packaged as an iPhone.[23]
Apple officially started selling its iconic smart phone in the world's largest mobile market with hundreds of people queuing up in the rain and cold outside stores to get their hands on the product during opening day.[22] In the United States, people will line up for blocks and camp out in the cold''to be the first customers into Apple's (NASDAQ:AAPL) retail stores when the consumer electronics wonder introduces a new product.[35]
For now witness the rare misstep in the life of the iPhone, and the even rarer misstep in the launch of an Apple product.[18] The difference may turn potential buyers off if the Chinese believe the product is inferior to iPhones sold elsewhere in the world, but has not dampened Apple's enthusiasm for the burgeoning market.[12] The Chinese phone market is very savvy. Apple products are in high demand but the tariff of thirty percent on imports there make them cost prohibitive.[45] Maybe, there's something else afoot? Think harder Bud Fox. Maybe just maybe the initial shipment sans WIFI is already bought and paid for per an agreement both binding Apple to a particular date and requiring Unicom to cover any costs related to the decisions of the Chinese govt.[33]
A Unicom spokesman, Yi Difei, said the company hopes to have WiFi in the next batch of phones. "We are talking with Apple and expect the problem to be solved by the end of this year," Yi said.[27]
The proud new owners also got help from the slides in the three giant iPhones hanging from the glass walls. Soon, Apple fans were seen "helloing" each other and making plans for celebrating their luck. Li Liang, 25, bought an iPhone even though he was not happy that the official handset was not equipped with WiFi.[3] The carrier was selling the 8GB iPhone 3G and the 16GB and 32GB versions of the iPhone 3GS. The main appeal of an official handset is that it is uncracked and can download iPhone updates as they come out, said Liu Xinran, a 30-year-old female employee at a local movie studio, as she waited in line to buy a 32GB iPhone 3GS. "I couldn't use my old iPhone 3G anymore because of a software upgrade," said Liu, adding that she had trouble accessing the App Store.[2] As for sales: many die-hard iPhone fans already have the handset, and given the high prices being charged, it'''s going to take real die-hard fans to buy the Unicom iPhones.[24] The high price tag remains a deterrent for the average Chinese when clones and lookalikes of the popular iPhone remain ubiquitous in small electronic shops across the country.[22] Now the entire world has been enjoying the iPhone to the fullest and the only country that was left devoid of its features was China. Its quiet obvious that even the Chinese were waiting in anticipation for the iPhone to hit their markets.[44] Apparently analysts have said the iPhone faces a challenge in China as many potential Chinese customers have already purchased an iPhone from unauthorised sellers, or purchase the iPhone from another country.[41]
Pang Jun, an analyst from research firm GfK China, said iPhone and Ophone actually do not have direct competition. "China Unicom regarded iPhone as a perfect marketing logo to promote its 3G services and does not want to make it affordable to ordinary users," he said.[13] Unicom is China's official iPhone provider, but the big guns has a sticky problem waiting for them: the iPhone clone market.[43] This post was mentioned on Twitter by MyiPhonePlace: Unicom iPhone in China Officially Begins Conquest of Clone Market - PMP Today (blog): Washington PostUnicom iPh. http://bit.ly/WBaRn..[43]
China may be the iPhone's Waterloo and that would set the global aspirations of Apple back considerably.[35] Most of the things come from overseas. They are 20 per cent cheaper and some of the second-hand models are half the price. Apple has always had problems trying to sell its widgets places like China. In Russia it presented its techno-toys at the same price as it does in the U.S. only to be laughed at by the technology press there.[38] The highly commercial Chinese market started to sell the Apple Iphone that had great success in the West.[29] The official iPhones are like AT&T iPhones: stuck with one carrier, even for international travel. Apple might''have''already finally met its match in when it comes to Chinese competition. from other iPhones.[45] The Chinese version of the Apple iPhone even lacks Wi-Fi to comply with Chinese regulations.[36] Besides the giant price tag, the Chinese iPhones are Wi-Fi crippled, in accordance with Chines regulations.[28]
Analysts have already begun criticizing the Chinese edition of the iPhone, which comes without Wi-Fi access.[27] The Chinese version of the iPhone ditches Wi-Fi in favor of WAPI. Macworld contributor Glenn Fleishman has an overview of the situation at TidBits.[8]
For censorship reasons, and many others, the Chinese government is unlikely over time to be as open as other governments are to a free-flowing, homegrown iPhone application ecosystem.[9] The iPhone has arrived in China for the first time on China Unicom--but with a twist.[20] According to Sina the first customer of the iPhone in China is a man named Zhi Xianzhong. He "only" waited 7 hours and 40 minutes in the cold and rain. The question is now how many will follow his lead and buy the rather expense iPhone in China.[36]
The iPhone also went on sale at 2-thousand stores around China, even as far as Tibet.[15] The iPhone went on sale at 2 thousand stores nationwide, even as far as Tibet.[19]
Smog hung in the Beijing air as buyers filled about two-thirds of an outdoor sales queue set up at a shopping mall. "It's because of the rain, the temperature really is a little low today," said Li Yi, a 27-year-old man waiting in line to buy an iPhone 3GS, when asked about the low attendance.[2]
The initial Chinese iPhones come without WiFi due to a temporary ban by Beijing, which was promoting a rival system, though the ban was relaxed in May after manufacturing had commenced.[12] First Nick admits: "There is a booming market for unlocked, WiFi friendly Iphones in the local Chinese markets."[38] Liu Xinling shows off the certificate that she got for being the first person to buy an iPhone online on the Chinese mainland on Friday.[3] Zhao Xin, 31, a salesman, became the first to buy the iPhone from the store.[3]
Long rows of computers were set up to process all of the iPhone purchases. At the Apple store was another event, where the energy was high though that was largely due to the dozen or so staff members who stood by the entrance and cheered people as they came in, breaking out into '''iPhone! iPhone!" chants every few minutes.[16] The Apple Store manager hopes that sales pick up during the week. This, in a nation of 1.3 billion people and almost 800 million mobile users.''[45] After two years of waiting, Apple's wildly popular smartphone finally kicked off official sales in the world's largest mobile market, with almost 700m users.[39]
Unicom's average revenue per user or ARPU, a common industry measure, slipped to 41.6 yuan in the third quarter from 41.7 yuan in first half, continuing a recent trend as carriers look to less affluent rural areas for growth iwith penetration rates in big cities high. The three rival carriers have been under pressure since late last year when they initiated a $58.5 billion plan to build 3G networks capable of carrying more data and multimedia content to the world's largest wireless market.[5] For users who really like 3G, and are willing to think about the total cost over two years (rather than just the up-front cost of the phone), buying from Unicom makes sense.[24]
To get a subsidy on the iPhone, users can pay a deposit, which will be returned incrementally each month in the form of a deduction on the users''' monthly bill. The higher the service plan and the more the user leaves for a deposit, the less they pay for the Unicom iPhone.[24] All data services must be run through the Unicom network - which will incur even larger bills for iPhone owners.[23]
The real problem with the Unicom iPhone has nothing to do with price. Or service plans.[27]
Only Unicom's shares rose in the quarter, up 7 percent, boosted by the promise of selling Apple's ( AAPL.O ) iPhone.[5] Unicom iPhones are priced from $730 to $1,020 before contract discounts.[43] The 32GB iPhone is retailing for the equivalent of $1,025 with no service contract.[10]
For the full story, see Wi-Fi-free iPhone officially lands in China on CNET News. [11] With all the what, where and when surrounding the iPhone's official arrival in China now out of the way, lacklustre consumer reaction would suggest all the related rumour and fanfare was completely overblown and unnecessary. Not nearly as popular as this photo might suggest.[6] "I know a lot of fans are like me. They have a touch of iPod, which has WiFi, and they buy an official iPhone that has some localized functions," Li said.[3] An Iphone without WiFi is one where you have to use the phone company for all functions and therefore incur a higher phone bill.[38] Every one present at the opening was anxious to see if the iPhone will be able to repeat its success story in the biggest mobile phone market on the planet.[19] Despite the country being the world's largest mobile market, there wasn't any frenzy like the iPhone launches in other countries. While you might suggest it's a cultural difference or other reasons, it's most likely caused by 2 factors.[21] Industry experts estimated that there are 700,000 to 1 million unauthorized iPhone users in the country.[13] By some estimates there are 2 million grey market iPhones in operation within the country already.[10]
Between gray market resellers, unauthorized carriers who sell devices brought in from Hong Kong and other countries, and individuals who bring the iPhone back from other countries themselves, it is estimated that there are already two-million devices already in use. [34] Non-Chinese companies are not allowed access to WAPI, but must partner with Chinese firms which gain access to non-Chinese intellectual property in the process of integrating WAPI support. Many non-Chinese companies have found this unacceptable, and simply do not sell Wi-Fi gear in China.[27] High prices and the lack of Wi-Fi on Chinese models may have shortened lines.[10] Prices range from 4,999 yuan ('445) for the 8GB 3G model, to 6,999 yuan for the 32GB 3GS phone (without a contract).[11] The smaller capacity model will sell for 4,999 yuan ($700+ USD) and the larger model will sell for 6,999 yuan ($1000+ USD).[28] U.S. users buying the same model with ATT'''s most expensive plan will pay $2,600 over two years (plus tax).[24]
Office Accounting users will continue to receive support under the original terms, which provide five years of mainstream support and five years of extended support following the product's release. Certain online services, such as eBay and Equifax tie-ins, will be no more as of Dec. 15. Customers who bought the software very recently have a potential out, as they can return the software within 30 days of purchase. Those are the top stories from the IDG Global IT News Update, brought to you by the IDG News Service.[26]
Get the latest news, reviews, and opinion about Apple's groundbreaking iPhone from the Apple experts at Macworld.[8] Google-backed Unity Cable Lands in Japan The Unity fiber-optic cable, a new trans-Pacific undersea fiber-optic cable partly backed by Google, has landed in Japan. Droid vs. iPhone: It's Really About the Carrier The media has been focused on comparing the Droid against the iPhone and debating whether the Droid can't beat it.[2]
The success of the Chinese iPhone will be relatively limited given the price which will drop, but probably never enough for the majority to afford it.[30] In Beijing, a large crowd gathered at The Place shopping center many hours before the much-hyped iPhone was officially launched on the Chinese mainland.[3] The Chinese iPhone is officially available today and there are queues! Not as long as the queues in the iPhone's U.S. release but there queues nonetheless.[43]
There are gray-market iPhones that cost less, come unlocked and actually support WiFi. [25] The other question is whether the physical WiFi hardware is missing, or more likely is it just removed from the software stack. I believe they use the same chip for BlueTooth, so probably the latter. If and when China wants to tell Apple how to implement WAPI then they can probably enable WiFi by a software update.[38] Regardless of the first weekend sales, it'''s clearly critical that Apple be a player in the China market going forward.[8] Apple, and financial analysts, have been counting on strong sales in China and a disappointing record there might change some of the rosy market projections for the Cupertino company.[7]
Nokia (NYSE:NOK), the world's largest cellular phone company, is the market share leader in China, followed by Samsung.[35] The story asserts in the headline that the phone has received a "lukewarm" reception in China. The piece said a "boisterious crowd" turned out for a launch event in Beijing, but that there is "no sign of the sort of sellout reception that greeted the smart phone as its introduction in other countries."[33] Beijing stores still had stock on Sunday night, and one Unicom outlet in the capital city reported that it had only sold 11 phones during the launch weekend.[17]
As of last night, you could walk into a China Unicom store and pick one up. Why was it not the huge success it has been at other launches? Well, it is possible they had enough inventory on hand to meet the typically high demand and then some, but I doubt that is the case.[42] Unicom and its two rivals lagged the 8.16 percent gain on Hong Kong's China Enterprises Index.HSCE during the third quarter.[5]
Rivals China Mobile ( 0941.HK ), the world's No. 1 mobile carrier, and China Telecom ( 0728.HK ) also reported last week disappointing earnings, a trend likely to continue after the revamp designed in part to increase competition and heavy 3G spending.[32] China's leading'' mobile carrier has more subscribers than the U.S. has citizens.''[45]
The site offers quick insight and sharp analysis from the wide network of Dow Jones reporters across Greater China, including Dow Jones Newswires' specialists and The Wall Street Journal's award-winning team. It also draws on the insights of commentators close to the hot topic of the day in law, policy, economics and culture. Its editors can be reached at'' chinarealtime@wsj.com. [16] The grey market iPhones are also cheaper and widely available.'' Once they buy a grey market iPhone, users can switch networks at their leisure, the unlocked iPhones able to switch networks based on the SIM card installed.''[45] Get yourself connected Monitor network speeds, find Wi-Fi hotspots, and more to keep your iPhone or iPod online.[8]
Drop us a line here, or on Twitter, @CSMHorizonsBlog. Blame the Chinese Government for forcing this device to be crippled, don't' blame Apple. [27] As a result, the Chinese sales of the device have been comparatively very poor over the launch weekend.[23]
Hmm. I can hardly believe that Apple would allow themselves to get hosed on this deal given the year that they've had and the entirely plausible excuse they would've had to delay the launch.[33]
Hundreds of fans cheered when the Apple store in Sanlitun opened sales at 8 pm.[3] I don't care where you are, anytime you have more than 3 people in a store to buy a cell phone, you have instant lines because the only thing more time consuming than buying a phone and activating it is buying a house.[42] A few hundred people is quite a small number in China, considering even new supermarket opening day attracts thousands.[16] China Telecom has confirmed it will introduce a new Blackberry handset from Canada.[15] China isn't just some foreign country with a penchant for censoring their citizens into oblivion and peddling counterfeit handsets on the cheap.[25] China has developed a competing method called WAPI, which the country refuses to divulge details about, even when China attempted to get WAPI accepted as an official iso standard.[27] China Real Time Report is a vital resource for an expanding global community trying to keep up with a country changing minute by minute.[16]
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