
IPhone struggles to gain ground in China - codelion
http://money.cnn.com/2012/08/28/technology/iphone-china/index.html?hpt=hp_t3
======
newhouseb
Anecdotally, if you visit Shanghai or Beijing you will see iPhones everywhere
- owning an Apple product in China will give you more 'street cred' than
pretty much any other consumer purchase. The amount of money people are
willing to spend on their phones (in China) relative to their annual income is
actually way, way higher than any rational economist might think (as do the
authors of this article). The constraining factor in Apple's growth in China
is supply (in manufacturing and distribution) rather than demand.

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nicholassmith
The interesting thing comes at the bottom; "In such a huge market, even 7.5%
market share, he noted, is worth billions."

So. 7.5% market share is worth billions in revenue to Apple, they make healthy
profit on the iPhone. They know it's desirable. The simple question is, why
would Apple try and price point compete and sacrifice the one thing that makes
them stand out from the whole host of other, cheaper devices?

There was an interesting report from a while back about consumer purchasing in
relation to knock off products in China, and it's an aspirational aspect of
consumer purchasing. There's a whole host of people who get the closest thing
to the 'the' item they want, be it a fake or a very similar item, and then
they'll bank until the can afford it. This is why whilst there's a huge amount
of goods counterfeiting it in China they also have one of the largest amounts
of luxury goods growth for any economy. Apple is in a safe position by doing
what they're doing, it's not like Ferrari or Louis Vuitton have suddenly
panicked and tried dropping their prices for an increase in market share.

Note, there's a massive divide between the poor, the reasonable and the
wealthy and I'm not an economist so I'm not even going to get into that
quagmire.

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digitalengineer
Sensational headline. Apple's marketshare is about 7%, the biggest competitor
(Samsung) reaches 21% (by the article, that doesn't state _what kind of
(cheap?) phones Samsung sells_ ).

As always Apple's market-share could be bigger "if they were only to produce a
cheaper, less feature-rich iPhone". This statement is made what? Once a week
for the past 7 years? I'd take profit versus market-share every time.

~~~
wisty
An headline with "Apple", "fails", and "China" in the headline is sensational?
That's umpossible!

~~~
chrischen
You mean unpossible?

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andyjohnson0
_"Among all the international smartphone brands competing in China, Apple is
the only one not offering a product that complies with [China Mobile's] air
standard," said Kevin Wang, the IHS report's author, in a press release. "For
Apple, this is a huge disadvantage."_

The iPhone hardware supports only GSM and CDMA, not the Chinese TD-SCDMA
standard [1]. According to this [2] article it would be far from simple for
Apple to create a Chinese variant, although to me the commercial case seems
very strong.

Does anyone with knowledge of this kind of hardware integration have informed
opinions about this?

[1] <http://en.wikipedia.org/wiki/TD-SCDMA> [2]
[http://gigaom.com/apple/apples-iphone-dilemma-should-it-
make...](http://gigaom.com/apple/apples-iphone-dilemma-should-it-make-a-
chinese-special/)

------
marme
the reason is cost and availability. The iphone is way too expensive in china
as you must by the phone outright with no contract as most people use pre paid
plans. There are some ways to get the phone discounted but still require you
to leave deposit with phone company for the full value of the phone which is
over $600.

The other reason is this does not account for age groups. There are so many
cheap android phones on the chinese market used by older people who barely
even know how to check their email with it, they just buy it because it is
similarly priced to non smart phones. For the 18-30 crowd i think iphones must
be over 50% market share for all phones not just smart phones

------
acchow
"Being on the computer/internet: 8 mins, 24 secs". Doesn't the average
american spend about 11 minutes on Facebook a day? I guess a lot of that is
during work/commute time?

~~~
npguy
Comment on the wrong post?

------
npguy
Remember, Apple is the smartest of smartphone makers. Look at this stat for
example -

"Though it shipped only about 6 percent of the industry’s smartphones and
tablets in the second quarter, Apple captured about 43 percent of the
industry’s revenue, according to Raymond James analyst Tavis McCourt. And it
generated an astonishing 77 percent of the industry’s operating profits"

Apple's customers "think different" and pay more.

~~~
berntb
You might be new here? Welcome.

Your quotes look strange, you need to give a reference.

"Ships 6%" and "gets 43% of revenue" implies that the price point of Apple
products are 7+ times larger than the competition's products.

That look unlikely, since the claim was about _smart_ phones (not "phones" in
general!) and tablets.

~~~
npguy
Reference here:

[http://statspotting.com/2012/08/apple-the-smart-
smartphone-m...](http://statspotting.com/2012/08/apple-the-smart-smartphone-
maker/)

~~~
berntb
Please note that this should be a high quality web site.

Don't "argue" by finding a random web page that claims something.

I Googled _market share smart phones 2012 quarter_ and got 16.9% for Apple in
multiple sources, including Washington Post. In literally a minute.

(Apple's market share in pads is much larger than this, so it would only
increase the statistic.)

[http://www.bgr.com/2012/08/08/q2-2012-smartphone-market-
shar...](http://www.bgr.com/2012/08/08/q2-2012-smartphone-market-share-idc/)

[http://www.boston.com/business/technology/2012/08/29/worldwi...](http://www.boston.com/business/technology/2012/08/29/worldwide-
market-share-for-smartphones/JmyBJe5vkNmXtjCqBkqlFI/story.html)

[http://www.washingtonpost.com/business/technology/worldwide-...](http://www.washingtonpost.com/business/technology/worldwide-
market-share-for-smartphones-a-market-dominated-by-apple-and-
android/2012/08/24/7d51fe0c-ee4a-11e1-b624-99dee49d8d67_story.html)

Edit: I did learn something -- about AllThingsD. Which was the original source
for your claim.

~~~
Steko
Save the lectures imho, the source of the quote was a analyst cited by All
Things D, hardly a random webpage.

Also 43% of "industry revenue" not smartphone/tablet revenue. Try not to
confuse people with tangents and red herrings.

~~~
berntb
>>43% of "industry revenue" not smartphone/tablet revenue.

You're not touching the "6%" number, which was what I showed wrong? In what
you comments on...

Edit: Removed discussion of the revenue percentage, which wasn't so obviously
wrong (I only questioned it in relation to the market share.)

~~~
Steko
Well you cited a different number, not the same as showing it was wrong.

For the record I think your number is closer to right and I'm inclined to
believe what's really meant was 6% of all phones but it could be a different
definition on what constitutes a smartphone and/or the lower end of a broad
range.

~~~
berntb
>>you cited a different number

Sigh, it is not _my_ number -- it is Washington Post's number (and the
remaining top hits on Google).

And if you're not familiar with the US news market and Washington Post [Edit:
Removed wikipedia link since ZeroGravitas wrote a better one in a parallel
comment.]

Now, go troll someone else. Preferably not on HN.

~~~
slurgfest
The severity of your tone (go troll someone else, etc.) seems
disproportionate... whether it is accurate or inaccurate, you seem to be
actually offended by the 6% figure, yet looking over the thread I don't see
anyone getting particularly personal with you, just discussing a topic.

~~~
berntb
I pointed out unreasonsble claims that disagree both with Wikipedia and with
media that have serious fact checking -- he keeps arguing. (I stopped checking
after the three top results on Google)

All that without any real point. Now you claim there is a point?

