<IT WORLD> Apple not so sweet in China
By Martin J Young
HUA HIN, Thailand - The success of Apple's revolutionary iPhone has been well
documented, but its release to the Chinese market has been a different story.
The smart phone went on sale on October 30 from China's second-largest carrier,
Unicom, under a three-year, non-exclusive contract. In the first four days, the
company managed to sell only about 5,000 units. This paltry figure didn't even
come close to expectations and is almost lost in the shadow of the 146,000
units sold by AT&T in the United States during the weekend launch of the
original iPhone in June 2007.
The low initial sales have prompted analysts to revise their predictions for
the Chinese market to about 550,000 for the next
year, from the 1 million to 2 million forecast previously.
A number of factors could have influenced Apple's iFlop in China, the first of
which is the price. The 6,999 yuan (US$1,025) tag for the 32 gigabyte iPhone
3GS model makes it a heavyweight when you consider that the average annual
income of urban workers in 2008 was less than US$4,300. Three months salary for
a phone is a little steep in any country.
China is not alone with its disproportionate pricing system as other parts of
Asia have similar packages. In neighboring Hong Kong, a slightly better deal
can be had on the smart phone, which sells for 22% less at about US$800. In
Thailand, the top model iPhone weighs in at 28,500 baht (US$850), still over
double the average monthly wage.
India's iPhone uptake has also been disappointing since its launch in August
2008, but with the $700 price tag this is hardly surprising in a country where
you can buy the Tata Nano car - at $2,000 - for the cost of three of them. One
would think that Apple and its associated telecoms partners would have taken
heed from that lesson. In the West, where wages are generally a lot better, an
iPhone can be purchased for a fraction of these prices.
Another influential factor in the failure of the phones' initial sales surge is
China's vast, ever-expanding grey market, involving cell phones that are made
locally and are not government approved, licensed or taxed. As a result, they
are substantially cheaper and therefore very popular among the gadget-crazed
masses who can simply sign up for pre-paid wireless services and get online
with their fake Apple, Nokia or Android smart phone for a fraction of the cost.
Industry researcher iSupply estimates that grey market handsets could reach 145
million shipments this year, a 44% increase on 2008. This figure represents
about 13% of the legally licensed global cell phone market, which is 1.13
billion.
On the upside, China Unicom stated this week that it had already signed up over
a million 3G subscribers and it was optimistic about Apple's iPhone launch to
the world's largest wireless market. In addition to Unicom, China's other two
carriers, China Mobile and China Telecom, have been under pressure following a
$58.5 billion plan last year to build and expand their 3G networks.
All three carriers reported disappointing quarterly earnings last month due to
handset subsidies, marketing expenses and network expansion. Wireless Internet
penetration over mobile phone networks is set to expand in a big way regardless
of whether Chinese consumers are using gray-market replicas or expensive
Apples.
Internet
In its effort to keep up with the digital Joneses, software giant Microsoft
revamped its MSN home page this week, although it will not be rolled out in
full until early next year. The long-overdue makeover aims to funnel more
traffic to its Bing search engine and away from its competitors, such as Google
and Yahoo, which have also recently revamped their portals.
Gone from the MSN home page is the traditional blue, though the butterfly
remains. The site is cleaner and less cluttered, yet it still bears all the
hallmarks of a web portal, with little differentiating it from Yahoo's and
Google's efforts. Microsoft has also collaborated a little with social
networking websites Facebook, Twitter and their own Windows Live by offering
updates via MSN. A preview of the Hotmail inbox is also available for those
still using the clunky e-mail service. A preview of the new-look MSN can be
seen here
Science
It is that time of year again when the boffins at the European Organization for
Nuclear Research put on their gloves and fire up the Large Hadron Collider
(LHC) for another round of atomic racing. Last week, the world's largest
machine was in action again as the first beam of particles went into the pipe
since its catastrophic failure in September last year.
A stream of lead ions was injected into a clockwise beam and accelerated around
part of the 27-kilometer circumference, followed by a stream of protons. The
tests were successful, nothing melted down, and the scientists plan to run the
first full circulating beam in mid-November, with collisions beginning in
December. The race will then be on again to find the meaning of the universe
while the conspiracy theorists will be wondering what will destroy the planet
first; the LHC in 2010 or the galactic alignment in 2012.
Martin J Young is an Asia Times Online correspondent based in Thailand.
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