China - page 34

In theory, officially introducing China up to the charms of the iPhone should have been a coup for Apple, potentially generating the sale of millions of handsets in the largest market on Earth. But the reality looks far bleaker: according to data from the official Chinese online iPhone store, Taobao.com, only five iPhones were sold in the first two weeks of its online availability.

Taobao.com is not the only place selling iPhones: Apple’s carrier partner in China, China Unicom, is also selling iPhones, but has not released official numbers. That said, Taobao.com’s numbers should be viewed grimly: it’s the largest and most frequented electronics site in China… the Chinese equivalent of Amazon.com.

Image via Paul Stamatiou
It’s an open secret that there are legions of iPhone owners who operate their phones outside of Apple’s officially sanctioned networks AT&T, O2, Orange, and T-Mobile Germany, either because they live outside of the countries where the iPhone is on sale or because they’re aware that AT&T has terrible coverage.

What is less well-known is just how big the problem has gotten. BusinessWeek reported last week that 800,000 to 1 million iPhones have gone AWOL after legitimate purchase. And now this weekend, analyst In-Stat claims that 400,000 of those iPhone are all in operation on China Mobile, the largest carrier in Mainland China.

This makes a few things clear:

1. Apple should get a distribution deal in China as fast as they can. They’re just leaving money on the table right now.
2. Apple would be making more money if they hadn’t gone with an exclusive network for each market. If the iPhone ran GSM and CDMA and was available far and wide, they would be making more money and they wouldn’t need to concern themselves with unlocking. By getting into bed with AT&T and making a part of its revenue dependent on “legitimate use,” Apple has taken an anti-consumer stance that will hurt it in the long run. Unlocked iPhones are only a problem because they depend on an outdated business model. Apple should be embarrassed for taking part in it.

Via iLounge