Summary
No one should be surprised over Apple’s lukewarm iPhone reception.
Analysis
About two years ago I had opined on the cloned and hacked iPhones in China. I was very concerned about fraud and still am. I pretty much taunted Apple for letting this happen and then, at the time, using the quantity of hacked phones in their sales figures. True the hacked phones were legitimately sold but they were illegally hacked to gain unfettered carrier network access. Sacrifice legitimate service for a sales data point; good for the vendor but absolutely lousy for the carrier.
The Chinese government leveled the playing field for the clones and illegal handsets when it banned Wi-Fi on the genuine article. I also recall mentioning (2 years ago) that Apple is not in any position to dictate to the Chinese government. I guess Apple decided it could charge outrageous prices for their iPhone to the Chinese especially one without Wi-Fi. Hey wait a minute the Chinese government made that decision. Get what I am saying? Big mistake to take on the Chinese market and treat it like it is ignorant.
Will Apple do better? Sure why not. Look I will be the first to say Apple has done the entire smart phone industry a favor. So I want to make a suggestion to Apple as a way of saying thank you.
My suggestion to Apple is: lower your prices. If Apple wants the Chinese market then it should lower its prices. Otherwise the Chinese market will be very happy with the illegal handsets and clones. The Chinese can wait; Apple cannot. In 15 years, I have not heard of a single vendor or foreign company beat the Chinese government.
P.J. Louis consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
