Summary
Future market prospects for Apple's IPhone launch this week in China are not as rosy due to high price,grey market/black market sales,poor service performance by China Unicom, frauds relating to Apps Store.In addition, other market factors such as competitors( also for Apps ) and relative maturity/growth patterns exhibited by the Chinese market as well as technical issues (see my previous analyzes) pose threats.
see also http://edition.cnn.com/2009/TECH/11/04/china.iphone/index.html
Analysis
1. These not so bonanza like scenarios have been described in my previous analyzes-see:
a. "Apple eyes Chinese market for IPhone" dated 09/20/2009 and
b. "Chinese mobile market growth patterns emulating a relatively mature market"dated 10/21/2009
2. Price is clearly a big barrier for higher growth and expansion of the Apple's IPhone sales in China as amply discussed by the above two articles. Lack of subsidy ( given previously by the government ) does not help!!
3. Grey/black market for IPhones is huge in China ( estimated at 145 million units in 2009).This is 20 times the sale of genuine sets !!These sets offer pirated software and features such as WiFi,QVGA-resolution touch screens at a price of USD 150 ( which is 15% of the price of legal IPhone ) !!
In addition,exports of grey/black market phones from China to rest of the world (including USA,Europe,Japan etc.) is expected to rise to 110 million units -thus completely destroying healthier growth for legal sales from Apple and others.
4. Fraud with Apple's Apps store as well as competition from others such as Nokia and China Mobile with own Apps stores also will not help in revenue from these sources.
In addition, lack of Apps for locals at an affordable price ( even USD 2 per app is too much for many local consumers!!) for the masses is a big constraining factor for future growth for Apple.
