Re: iPhone Inches Closer To China Deal, But Here Is Why It Will #Fail

dvd000 — Thu, 30 Jul 2009 06:25:37 -0000

Thanks, Jason. But when one presents facts, they should be qualified. Clearly 10 people in a college dorm is not the demographic Apple nor any luxury goods provider will sees when it puts its business case together. A free study by McKinsey shows that China will have the 4th largest middle / wealth class in the world in 3-4 years and that within this group people are dramatically different from their Western and Japanese counterparts in this demographic. For one, 80 some % are less than 45 (opposite the rest of the world) and, two, they are very prone to buy new technology vis-a-vis the Chinese middle and lower income brackets. So, taking other things out of the equation, the target market is 'big' enough, has enough money, and are prone to spend it on technology toys.

I'm active in the IT / Telecom industry who sees the wealth in China firsthand everyday - on planes, in hotels, in customer interactions, with government officials - and many of this elite class are already using iPhones smuggled from HK or elsewhere. There is no shortage of demand, only supply. Money is not a factor. Access is the issue.

If you REALLY want a story, do one on the challenges ordinary iTouch / iPhone buyers have in getting registered to the China App Store and buying things there. That's the story that needs to be told. This is the thing that is turning people off the App Store and the iPhone.

Re: iPhone Inches Closer To China Deal, But Here Is Why It Will #Fail

dvd000 — Wed, 29 Jul 2009 08:26:28 -0000

Wow! for the author, who claims to have spent a year of his life if China, to say the Chinese do not have any interest in the iPhone / iTouch, is really an overstep of his supposed domain knowledge. Who are these 10 experts? Are you talking about the construction workers living under a plastic sheet in Datong, students struggling for dinner or the BMW X5 driving divas and privileged party members who already have the iPhone? For the sake of it, let's assume that was a throwaway comment.

Fact is, this is the newest 'bling' accessory for the well-heeled and the wannabees. At lunch and dinner people throw their phones on the table, partly to have them accessible, mostly to show their brand loyalty. Whenever an iPhone is there, it is the one picked up. Show me what you've downloaded, they ask.

Go to a phone market and you'll see both fake and real phones are selling like hotcakes. And just like the fake Rolex you bought in that ShenZhen market and showed your Chinese friend, people know the differnce between real and faked... I can see them hiding their teeth as they laugh.

But getting to the real picture: China Unicom will have a better network than China Mobile very soon. Having the iPhone gets people to switch, to balance the playing field under tough circumstances (you also must know number portability isn't available in China and CMCC is 4x bigger and better run, more trusted). And, yes, many migrant workers use CUC for cheaper rates but this isn't the market anyway for a high-end phone.

The big 'issue' is the App Store in China, which to date, have fewer apps (I estimate 25% of the US store) and that the process for Chinese consumers to access the app store is complicated (say, compared to Taobao). One would hope the latter issue at least is remedied before any launch. And if so, watch out I say. The volume estimates are too low. The Chinese love their toys and love to show their toys off.

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Re: iPhone Inches Closer To China Deal, But Here Is Why It Will #Fail

Re: iPhone Inches Closer To China Deal, But Here Is Why It Will #Fail