The operator can be blamed to a certain degree. But 5000 handsets sold tell us another tale. I can imagine, that a large proportion of this number have been sold to foreign professionals, or to their employers; so the actual reality is a disaster to Apple. There are more than 5000 people in China who could buy thousands of iPhones. They just don't.
The lesson is this:
In China, people are not exposed to western marketing. They cherish 'value' more. For the price of the iPhone, they can get so much more performance from other manufacturers. They look at the specifications of the iPhone and think - how come that the cheapest phones are not just better in terms of battery life, but they offer more features too - radio, video recording and decent voice clarity. So partly, at least, it must come down to the fact that the iPhone is not a very good phone. It is a good gadget, but as a phone, it is just appalling.
What distinguishes the iPhone in the west is the style factor and the App Store. Even in some countries in Europe, there is hardly anything that is usable in a native language. Without Wifi, really needed features, apps and proper network support, there goes the idea of the Chinese iPhone up in flames.
However, that is not the real worry for Apple.
Snow Leopard has tons of features that the Chinese could take advantage of - yet, they seek good performance for their money. In that sense, Apple sucks. Ironically, Apple cannot lower the price of its hardware in China without risking these cheaper products flooding western markets. So they have to keep the prices high. And watch other OSs increasing their market share on cheap third party hardware. Yes, Apple, eat your own soup!
