Maybe a billion Chinese people can be wrong. This past week the highly anticipated iPhone from Apple finally arrived in China, and it wasn’t quite the out of the box hit that many expected. In fact, according to The Wall Street Journal, the phone didn’t sell out over the weekend, as it had in Japan and the United States.
The handset, which is being offered exclusively by the number two mobile carrier in the nation, China Unicom, was supposed to be a big boost but instead has been seen as somewhat lackluster. The company, which is one of those owned by the state government, has signed a three-year deal with Apple.
But the hurdles are pretty obvious, beginning with the fact that the phone carries a price that averages to between $750 an $1000, while import handsets can still be found for much less. This has limited the appeal of the popular handset to business users, notably those looking to use the 3G networks, which China Unicom is still in the process of upgrading using the WCDMA standard. Currently, China Unicom’s WCDMA signal quality was reportedly only meeting the required ideal standard in about 30 markets, while about 17 cities have average, and 11 have poor quality.
To add insult to injury, the Shanghai Daily has reported that the iPhone in China won’t include the Wi-Fi features for now. So much for taking advantage of those many apps. Where is the high-tech gang of four when you need them!
Of course, one factor that the media hasn’t touched upon as much is whether piracy and knock-offs has had any effect on the market. While the iPhone hasn’t been hotly pirated, there are knock-offs. Additionally, the aforementioned imports have likely eroded the market. But regardless of the reasons—price of course remains an issue—Apple might not be able to say this time, “the iPhone, there’s a market for that.”
Is the Recession Over for Mobile?
What recession? Well, the worst may not be over, and to paraphrase the late Sir Winston Churchill, “this isn’t end, nor the beginning of the end, but it is the end of the beginning of the recession for some consumer products.” I offer this take, as two analyst research firms this week offered opinions that mobile sales should increase for the fourth quarter.
Strategy Analytics has predicted a return to growth for the fourth quarter, with price cuts being a key factor in the return to “normal.” Meanwhile, rival analyst firm ABI Research suggests that mobile handset makers will see an increase in sales, but in a twist, this firm is placing its bets on Nokia and its Symbian-powered handsets as making the biggest splash. This in contrast to other industry insiders who expected this to be the season of the Android, which is arriving in its 2.0 version this fall.
It would be difficult not to expect a turn-around, especially given all the new handsets that might entice consumers, and given that ABI noted that the third quarter saw a dip in sales by more than 6.5 percent. Thus consumers might be ready to make the upgrade.