China's Largest E-Commerce Store Has Sold Only Five iPhones

[alexhasfun28]

Having an iPhone in China is like having an iPhone wannabe that lacks features, here in the states.
China is filled with much more phones that are from different companies such as Nokia, and those maybe top, top, top sellers even,(possibly) a grand iPhone killer that we don't even know about yet.
China is one hardcore country when it comes to selling electronics in Asia. Apple really needs to step it up a notch if they want to become successful in Asia and go with the flow with competition there.
example:
-video chat?
-Wi-Fi?
etc.

 

[BornAgainMac]

Now when I play the famous Steve Balmer clip on youtube about the launch of the original iPhone it makes sense in a Chinese world.

 

[SeattleMoose]

Not Surprising

China is the center of the universe for pirating of just about everything. Chinese refuse to pay coz they are waiting for the cheap knockoff.

It is a cultural thing.......

 

[Ironduke]

ahahaha thats a kicked in the Jacobs

 

[alphaod]

China is the center of the universe for pirating of just about everything. Chinese refuse to pay coz they are waiting for the cheap knockoff.

It is a cultural thing.......

Actually people don't want to pay all that money for a crippled device and all that money for service. Don't forget, Chinese people don't make thousands of dollars per month. And people who can afford the phone will either buy it unlocked (which then they can use cheap minutes and data), and buy other devices that are better?

 

[175170]

Slavery in the United States may have ended in 1860, but apparently it still goes on today in China.

Saying that without any evidence whatsoever is just naive. Have you ever been to China?

People who wants an iPhone have already bought it from the US and elsewhere.

Estimated to be 1.5 million unlocked gray market iPhone in China already
http://iphonasia.com/?p=7510

I see some people failing to comprehend that people already bought iPhones in China.

Spot on.

China is the center of the universe for pirating of just about everything. Chinese refuse to pay coz they are waiting for the cheap knockoff.

It is a cultural thing.......

Sigh. Racism at it's worst. I suggest you get your facts straight first.

 

[koobcamuk]

Japanese style flip phones are more popular than the iPhone in China.

I wish we had flip phones in the UK too, but it's all about tablet shapes.

 

[iphones4evry1]

Saying that without any evidence whatsoever is just naive. Have you ever been to China?

How is it that they can sell things so cheaply here? It's mind-boggling. I go into regular stores and items that cost $5 are only 99 cents at the 99 Cent Store, yet they all say "made in china" on them. It seems like simple math. How in the heck can you even make the thing for 99 cents, and then pay people a living wage to make it? The economics just don't add up.

Also, how do you explain this?

CNN: http://amfix.blogs.cnn.com/2009/12/03/slave-labor-blamed-for-falling-shrimp-prices/ (watch the CNN Video)

This is not sarcasm. I am simply looking for an explanation.

 

[fifthworld]

Yeah, huge population, but huge market? Will you completely spend 1, 2, 3 or even more monthly salaries just to get the iPhone? If you live in China and you can afford the iPhone, than you are one of the 1.5 mil that already bought it elsewhere.

 

[yongxiaofeng]

According to the chinese twitter source, the official retailer Unicom is actually trying to put their "Legit" iPhones into grey market to compete with those unlocked iPhones. The price is also significantly cheaper than the "official" price.

I guess they want to clean the inventory which iphones are wifi-disabled first.

 

[iriejedi]

Why Buy One???

Why buy expensive original one - there have been China fake ones for years. My boss brought one back and it looks pretty real and works with TWO sim cards... pretty funny indeed.

Thats actually kinda funny

 

[urbanslaughter1997]

Wow, the headline for this story couldn't have been more misleading!

 

[wako]

It's amazing that the phone is wildly overpriced in the same country that makes the phone. The government's forced stripping of certain functions doesn't help either.

ever heard of taxes and tariffs? despite it being made there, apple still needs to pay them to sell it there...


I think i just read in the news, recently the PS2 (not three!) just started getting sold there for the AMAZING price of 465 USD! Thats 4x more than if you just came to the US and bought it simply because of taxes.

 

[griz]

Technically, 500% of zero is still zero.

Sorry, the math nerd in me couldn't help it...

Agreed. But if a company starts out with a value of Zero, how would you quantify its growth over time in the form of a percentage? Or would it always be from an assumed based value of initial worth?

 

[Ping Guo]

Think how cool that makes those five people!

Not very cool, since grey market unlocked iPhones, both factory unlocked HK models and SIM unlocked US models, have been widely available for years. In Shanghai, the iPhone is pretty passe at this point, everyone who wanted one and has the money already has one. A couple of days ago I saw a fish seller in a wet market chatting on his first-gen iPhone.

China is the center of the universe for pirating of just about everything. Chinese refuse to pay coz they are waiting for the cheap knockoff.

It is a cultural thing.......

China is the center of the pirating universe, but Chinese with money (and there are plenty) will gladly pay for the real thing.

Actually people don't want to pay all that money for a crippled device and all that money for service. Don't forget, Chinese people don't make thousands of dollars per month.

You seem to have China in 2009 confused with China in 1979. Just because it's a developing country doesn't mean there aren't millions of consumers with disposable income. Lots of Chinese have money to burn. I see farmers walking into Bank of China with duffels full of 100 RMB notes. A factory owner from Wenzhou will buy his Mercedes or Maserati with cash, and think nothing of blowing several grand in a single shopping spree at Louis Vuitton and Patek Philippe. Unlike the billions in hallucinated wealth that has evaporated from the US economy in the past 18 months, the Chinese are flush with real, hard cash, not taking out 2nd mortgages and juggling credit cards like many Americans.

 

[idannyb]

It's still early in the China game

It is no surprise that the brand new store on Taobao.com has not sold many iPhones. Taobao is the eBay of China. They sell 100xs more secondary market iPhones on their site versus the official China Unicom iPhones. When you see the grey-market iPhone prices (lower with no deposit or contract required) next to the official iPhone (a segregated store), it's hard to choose the official WiFi disabled version.

The new Taobao China Unicom iPhone store > http://iphone.mall.taobao.com/

Taobao.com's robust secondary market for grey-market iPhones > http://search.taobao.com/search?commend=all&isnew=2&q=iPhone

I had a knowledgeable source suggest to me that China Unicom was deliberately maintaining it's pricing strategy (high + large deposit required) until the rumored WAPI/WiFi iPhone is ready (sometime next spring/summer?). If this new model is forthcoming (entirely possible), it begs the question why China Unicom did not defer the iPhone launch until such time as they would have an option that would compete on a relatively level playing field with the grey-market version?

One thing that gets overlooked in the press reports dissing Apple's iPhone in China launch is the fact that China Unicom has quite a bit at stake (more so than Apple). The rumored 5 million iPhone pre-sale was neither confirmed nor denied ... it was qualified "not exactly right" (paraphrasing China Unicom CEO Chang Xiaobing). There's plenty of evidence to suggest that China Unicom has in fact made a major commitment to buy iPhones from Apple. The pre-buy makes sense as Apple had to build a custom model per China Unicom's desires and state mandates (50 China apps + Wo Portal and no WiFi). IMHO Apple would not build a custom model w/o a large pre-buy. Pure guesswork, but it would not surprise me to learn that Apple has thus far pre-sold/delivered, and received payment for, 250,000 iPhones.

If China Unicom has agreed to buy a large volume of iPhones (and I think they have) they will need to make changes to pricing to move the iPhones. There are many ways China Unicom can get more creative with pricing. While the deposit is allocated back (offsets monthly plan fees) over the 24-month contract, it is still a large amount to pay up front + the cost of the iPhone. Hong Kong carrier Planet "3" has a good program via their DBS Bank Visa partnership - No deposit required and a very modest amount each month to pay for the iPhone. South Korea KT has also priced (subsidized) the iPhone very competitively.

It's still early in the game ... I expect we will see new iPhone models (possibly WiFi/WAPI) with new pricing. There is also a possible China Mobile deal that may happen some 6 to 9 months from now - after first batch of TD-SCDMA OPhones have launched. I'm still hoping we will see a low-priced 2G (EDGE) iPhone for China Mobile.

Re the credit card concerns raised in the article ... I agree. China Unicom and Apple need to come up with alternative means to pay for apps/games on the App Store. China Uincom has recently contracted with Tencent and Alibaba to develop e-payments systems (Alipay and Tenpay) for mobile subscribers. See the breaking news out today about Apple and Alipay > http://iphonasia.com/?p=7556

~ Dan Butterfield
http://iphonasia.com/

 

[reverie]

The headline of the article is horribly wrong. As the poster before me said, those 5 items were sold by *one* vendor on Taobao, the eBay of China. Taobao has probably seen 100.000s of iPhone transactions. There are a 1000 iPhones on offer right now.

The significance of this is that you should not open a store on an auction site if you want to charge list price for premium brand products. Customers who pay full price expect full service, ie a dedicated website or brick-and-mortar store. Taobao and eBay are for bargains and used items.

 

[reverie]

If this new model is forthcoming (entirely possible), it begs the question why China Unicom did not defer the iPhone launch until such time as they would have an option that would compete on a relatively level playing field with the grey-market version?

I wonder if they will ever be able to get rid of these crippled phones. Maybe that's why they opened their Taobao store, because they know they will have to discount them heavily.

If China Unicom really made a 7 digit commitment it would have to be a multiple year agreement, maybe over 3 years. By then, Apple would have to deliver an iPhone lineup starting at $300, which is the average price for a smartphone on the Chinese market, not $500. It really depends a lot on Apple's future lineup and pricing strategy. Apple has so many options in terms of form factors and price drops that it's impossible to predict.

By the way, in the past we've also seen claims of millions of iPhones supposedly preordered by the Russion carriers. Some people just get a kick out of those numbers.

 

[idannyb]

Evidence for Unicom's "pre-order" and a WAPI/WiFi iPhone in 2010

I wonder if they will ever be able to get rid of these crippled phones. Maybe that's why they opened their Taobao store, because they know they will have to discount them heavily.

If China Unicom really made a 7 digit commitment it would have to be a multiple year agreement, maybe over 3 years. By then, Apple would have to deliver an iPhone lineup starting at $300, which is the average price for a smartphone on the Chinese market, not $500. It really depends a lot on Apple's future lineup and pricing strategy. Apple has so many options in terms of form factors and price drops that it's impossible to predict.

By the way, in the past we've also seen claims of millions of iPhones supposedly preordered by the Russion carriers. Some people just get a kick out of those numbers.

Here's a bit more info cobbled together from posts on my blog > http://iphonasia.com/ Glad to provide links/sources for those who are interested.

On August 11, 2009 China Business News reported that China Unicom agreed to pre-purchase 5,000,000 iPhones from Apple for 10 billion yuan renminbi, a cool USD $1.46 billion. Immediately after the CBN report, China Unicom spokesman, Yi Difei publicly denied the iPhone pre-purchase. A few weeks later China Unicom CEO Chang Xiaobing offered more of a qualified response: “Not exactly as reported.”

Despite these denials and qualifiers, Zhou Fang, the CBN reporter who broke the story, stands by his article and states that he made audio recordings of the interviews with the Guangdong Unicom executives (Zhou Youmeng and Yu Zaonan) who spilled the beans. Adding further legitimacy to the original CBN report is an 8/14/09 post on Interfax TMT sourcing another China Unicom insider who validates the 5 million pre-order claim.

In my view, a pre-order commitment from China Unicom is almost a certainty. Apple would not build an iPhone specially configured for China Unicom (50 for China apps + WoPortal + WiFi chip removed) without a major pre-sale. The question is how many iPhones were pre-ordered and over what time? Best guess is that the total commitment is 5 million iPhones with a payment/delivery schedule staged-in over a 3-year timeline.

While the official (non-grey-market) iPhone sales at retail are likely somewhere between 10,000 to 50,000 launch-to-date, you can bet that Apple has actually booked a much higher number for AAPL Q1 earnings due to the probable China Unicom pre-purchase (paid for and delivered).

There have also been numerous reports that a WAPI/WiFi iPhone is under consideration. China Unicom executive management, including CEO Chang Xiaobing, are on board with this notion. When (or if) might this happen? Unknown. Best guess would be Spring/Summer 2010.

 

[175170]

Selling the iPhone in China really doesn't work.
As a Chinese native myself, I know the problems of breaking into a market. Yes, there is potential to be tapped, but tapping it, for a Western company like Apple, is almost impossible.
If I was rich enough, in China, for an iPhone, I would just go ahead and buy an unlocked one from Hong Kong. If I wasn't rich enough, I just wouldn't get one.

When I go back to China, showing some salesmen my iPhone, they're impressed beyond belief. They go "Wooooowwww. An iPhone!!!!"

 

[CocoaPuffs]

China is the center of the universe for pirating of just about everything. Chinese refuse to pay coz they are waiting for the cheap knockoff.

It is a cultural thing.......

Ever consider that Chinese rather pay for things on the basis of value than price? If cheap knock off provides the same value as the overpriced retail item, why not?

 

[Eraserhead]

It's amazing that the phone is wildly overpriced in the same country that makes the phone.

Its not as if stuff in any other western branded store is cheap in China either. Mostly they seemed to be twice as expensive as the UK.

Actually people don't want to pay all that money for a crippled device and all that money for service. Don't forget, Chinese people don't make thousands of dollars per month. And people who can afford the phone will either buy it unlocked (which then they can use cheap minutes and data), and buy other devices that are better?

Selling the iPhone in China really doesn't work.
As a Chinese native myself, I know the problems of breaking into a market. Yes, there is potential to be tapped, but tapping it, for a Western company like Apple, is almost impossible.
If I was rich enough, in China, for an iPhone, I would just go ahead and buy an unlocked one from Hong Kong. If I wasn't rich enough, I just wouldn't get one.

Agreed. Also I think the Chinese are much bigger fans of trying stuff before they bought it - so they'd probably want to go down to the store rather than buying online.

 

[Consultant]

Having an iPhone in China is like having an iPhone wannabe that lacks features, here in the states.
China is filled with much more phones that are from different companies such as Nokia, and those maybe top, top, top sellers even,(possibly) a grand iPhone killer that we don't even know about yet.
China is one hardcore country when it comes to selling electronics in Asia. Apple really needs to step it up a notch if they want to become successful in Asia and go with the flow with competition there.
example:
-video chat?
-Wi-Fi?
etc.

So you are saying China > US in term of technology? LOL.

Features =/= usability

and i see people failing to comprehend that people already not bought those iphones elsewhere. if 1.5m iphones were sold to china, then 1.5 less iphones were sold for the us (and rest of the world).

what was expected, if you read any of the numerous rumors about iphone sales starting in china, was that this would wildly increase the total sales. now if the total sales already included the phones sold to china, then surprisingly enough making iphone available in china doesn't improve the sales at all.

isn't the total sales the thing to watch? not the sales in china?

Despite what FUD some people are trying to spin, fact is,
iPhone is still the industry benchmark.

 

[Eraserhead]

So you are saying China > US in term of technology? LOL.

Probably in terms of mobile phones (except the iPhone) that is true.

 

[AAPLaday]

5 is pathetic no matter how you try and spin it. And as for the argument that people would have bought them elsewhere then why would Apple bother releasing it there if they knew it had such a small demand. I doubt that with a country that has almost 1.3 billion people that everyone who has one got one and wanted one got it from overseas.