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Sales of the official iPhone in China are far from robust

When the deal with Apple and China Unicom first came to light, many expected big things from the two companies launching the iPhone officially in one of the biggest mobile phone markets in the world. The catch was that the iPhone was already available in China through the grey market.

The grey market iPhones had been in China for about a year when the deal was confirmed for Q4 and offered more features, namely WiFi, than the official iPhone for China that China Unicom was offering. AppleInsider reports that the reception for the official iPhone in China was very subdued. Attendance at iPhone launch parties was good, but sales did not reflect strong demand for the device in China.

According to a report, "At the Apple store in Beijing, the company's only location in China, the crowd seemed less enthusiastic. Employees cheered anyone who came in with chants of 'iPhone! iPhone!' But there were no lines for the stacks of new iPhones."

The iPhone debuted in China officially at 6,999 yuan, equivalent to $1,024 here in America for the iPhone 3GS with no service contract and minus WiFi. WiFi was left out of the official iPhone because the Chinese government had banned the feature in favor of a competing Chinese standard. China Unicom reportedly hopes to have WiFi in its official iPhone next year.

AppleInsider reports in a follow-up that the sales numbers for the iPhone were a mere 5,000 units compared to 1 million users that have signed up to use the company's new 3G network with other devices. The wireless carrier still expects that the iPhone will add to its Q4 profits. Grey market iPhones in Hong Kong sell for about $800 and include WiFi. The deal between Apple and China Unicom reportedly had a minimum order threshold with at least one to two million iPhones ordered per year.

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By Fracture on 11/3/2009 9:46:04 AM , Rating: 3
A fine example of China's protectionist policies at work. This is how they maintain their comfortable trade surplus with the US.

By carniver on 11/3/2009 12:11:42 PM , Rating: 2
How can China allow WiFi enabled iPhones to be imported when their "jPhone" doesn't support it?

By lightfoot on 11/3/2009 3:59:03 PM , Rating: 2
China doesn't "allow" iPhones to be imported in the same way that the US doesn't "allow" undocumented workers.

It happens outside of the law and the government is virtually powerless (or unwilling) to stop it.

By rudy on 11/3/2009 5:56:00 PM , Rating: 3
Quite often government officials whom are suppose to be stopping it are being bribed to ignore it.

By PandaBear on 11/3/2009 7:07:13 PM , Rating: 2
Smuggling business is huge in China if you know the people and have a triad behind you.

By Motoman on 11/3/2009 4:24:39 PM , Rating: 2
...I'm pretty sure their trade surplus is secure due to their labor costs. If the USA could make consumer goods with labor rates the same as China, we wouldn't buy anything from them.

As it stands, if the iPhone went to China in the same exact form it is in the USA, the fact still remains that virtually no Chinese citizen could afford it. Granted how little they get paid for their labor.

By rudy on 11/3/2009 6:04:14 PM , Rating: 2
That is not the only reason like most things in life the there are many effects. Cost of labor is one but China also has lots of laws and policies that make it easy to put money in the country and nearly impossible to pull it out. They make it easy to invest in Chinese companies but unlikely you will get a ROI while in China.

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
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