iPhone’s China Play

When the first iPhone craze swept over the US, I opined on Apple’s strategic mistake treating the China market: the largest in the world. IPhones are not supported in China. If you wish to use this cool gadget there, you need to jailbreak it and void all warranties. Thousands of people did just that, paying two surcharges: the more expensive handset that did not come bundled with AT&T and the jailbreaking fees.

With its deal with China Unicom, a much smaller player in China, iPhone now has an official presence in China. But the venture faces a thriving industry of jail-broken iPhones.

A customer has choices: buy a jail-broken iPhone and stay with the their current China Mobile account or a legitimate one with a new phone number. This week, they learned that door #2 is more expensive. The 3GS version (16GB) costs $440 and without the WiFi feature, compared to the US Apple store price of $200, full featured.

Apple picked a weak partner, irked the customer with its pricing, and ignored the competing channel. Essentially, it continues to cultivate competition by marketing the touch-screen smart-phone segment and weak-playing the largest market in the world.

Let’s see how other handset vendors play this.

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3 Responses to iPhone’s China Play

  1. Zac says:

    Absolutely. Three things they needed to do:
    Go with China Mobile.
    Offer a full featured handset, obviously.
    A more realistic price point for Chinese consumers.

    It is the world biggest market, and Apple should of put more effort in, or conceded more in the short term for the benefit of long term growth.

  2. BeijingMan says:

    Good points,

    I thought Apple was a game changer! But no, Apple clearly got blinded by China’s big numbers and has no clue how to do business in mainland China.

    There are competitors with wlan (WAPI) phones in the marketplace. Cupertino – wake up!

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