With hundreds of millions of cell subscribers in China, the introduction of the iPhone in the region was supposed to be profitable tour de force for Apple. But since the iPhone first went on sale in China a few weeks ago, sales have been crawling and exceedingly below analyst expectations.
With hundreds of millions of cell subscribers in China, the introduction of the iPhone in the region was supposed to be profitable tour de force for Apple. But since the iPhone first went on sale in China a few weeks ago, sales have been crawling and exceedingly below analyst expectations.
After a few months of back and forth negotiating with China Mobile and China Unicom, Apple subsequently struck a deal with China Unicom to sell the iPhone, and from there, it was only a matter of time before Apple’s iPhone sales went off into the stratosphere. Or at least that was the plan, anyways.
There’s no way around it. iPhone sales in China have been abysmal and aren’t in any way representative of how the device typically sells when introduced into a new market. And given that China Unicom has well over 700 million subscribers, it makes you wonder what exactly is going on. The problem isn’t that the iPhone there just isn’t selling up to expectations, it seems to not be selling at all.
Sales of the iPhone at China Unicom retail outlets have been mediocre at best, with the mobile carrier reporting tempered sales of only 5,000 iPhones in the days after its release. Most recently, China Unicom began selling the device through Taobao.com, also known as the eBay of China. Since the official iPhone section on Taobao opened for business 2 weeks ago, China Unicom has only sold a grand total of 5 iPhones! Granted, China Unicom also sells the iPhone at its own domain, and via brick and mortar stores, but the poor showing on Taobao is still a telling part of the picture.
While analysts were quick to paint China as a country just waiting to lavish riches upon whatever handset manufacturer was able to get a foothold there, they ignored some practical considerations in the process – and that may explain why the iPhone hasn’t exactly taken off.
First of all, the iPhone in China is comparably expensive in relation to what the average Chinese citizen earns and to what the average Chinese citizen is used to paying for a smartphone. Remember that the average phone bill for a China Unicom subscriber in particular is less than $10 a month. Jumping from that to expensive data plans that cost upwards of $100, and there’s an obvious price gap between what a product is selling for and what people can actually afford to pay.
And on that note, it’s reasonable to assume that a good number of people in China who could ordinarily afford an iPhone already have one in one form or another. Remember that before the iPhone truly went global, there was a bustling underground market for unlocked iPhones, and a large number of those devices (estimated at 2 million) eventually made their way to Hong Kong. Not to mention the fact that those unlocked phones have wi-fi capability, something which the newly released iPhones lack. Also, the Chinese market is filled to the brim with iPhone knockoffs that would make any peddler of fake merchandise proud. To that end, it’s very possible that when the iPhone finally came to China, it was already old news, and ultimately, too little too late.
