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Last time around, the iPhone 3GS (pictured) failed to attract many Chinese buyers. This time around Apple is hoping for a modest success with the iPhone 4. The company is shooting for sales of around 1 million units.  (Source: China Unicom)

The new iPhone will go on sale at Apple's new Shanghai store this week. The biggest obstacle to its sales will likely be the price -- it costs $100 more unlocked in China than in Hong Kong.  (Source: Apple via Engadget)
Unlocked version of iPhone 4 is approximately $100 more expensive in China than in Hong Kong

China's mobile phone market has close to 800 million subscribers -- a phone maker's dream.  The last time Cupertino, California-based Apple, Inc. tried to conquer the Eastern market, though, it came up resoundingly short.  The iPhone 3GS, carried by China Unicom, sold only 5,000 units at launch, while only reportedly selling five units at China's largest e-tailer Taobao.com (a site similar to America's Amazon.com).

The American electronics maker will get another shot at Chinese glory, when its iPhone 4 goes on sale this Saturday at 8:00 a.m. in China.  This time around Apple seems a bit better prepared.  It made a major investment to open a beautiful underground Apple Store in the Hong Kong Plaza of China's largest city, Shanghai.  The store's entrance is crowned with a massive tower of glass, which Apple CEO Steve Jobs called a "landmark in glass engineering."

Apple currently has two stores in China, but will see that number expand to 25 by the end of next year.  Apple's second current Chinese store is located in Xidan Joy City in the capital city of Beijing.

For the iPhone 4 launch Apple is still sticking with China Unicom, the nation's third largest carrier.  China's carriers operate somewhat independently but all have a majority stake owned by the government -- much like the U.S.'s stake in GM and Chrysler.  The government influences the carriers' key decisions, particularly on issues like data censorship.

For Apple, the biggest difficulty in convincing Chinese buyers to buy iPhone 4s will likely be their price point.  The phone will be sold at Apple stores unlocked for CNY4,999 ($743.56 USD) for the 16GB model and CNY5,999 ($892.31 USD) for 32GB model (without a contract).  
Reuters is reporting that the 16 GB edition of the phone will sell with new 2-year contract at China Unicom for CNY3,899 ($579.95).

Marvin Lo, a Hong Kong-based analyst with Daiwa Capital Markets, "Looking at the pricing, it is still relatively expensive. People can still come to Hong Kong to buy it for less.  It is still expensive stuff, whether it can stimulate net additions over 6-7 months remains to be seen."

In Hong Kong an unlocked 16 GB iPhone 4 retails for HK$4,988 ($642.43 USD).

Despite the higher price, Mr. Lo is convinced that the iPhone will do moderately well in China and sell a million units.  That performance would greatly surpass the sales of the iPhone 3GS in China.

There's been no official word from Apple about whether the Chinese market well get a model with a fixed antenna.  

Apple's iPhone 4 honeymoon period in the U.S. was ruined by concerns swirling around the device's antenna.  The exterior antenna location was reportedly warned about by Apple hardware engineers, but Apple's management refused to alter the design for fear of impacting the phone's weight and slender profile. 

Apple was rumored to roll out a fixed antenna design near the end of this month, allowing the phone to safely make calls without a protective polymer bumper case.



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RE: I'da thunk...
By kmmatney on 9/20/2010 5:25:41 PM , Rating: 2
I think it will sell OK. I was in China for 2 weeks this summer, and saw plenty of iPhones and iPads. I think they are just having friends buy them in the U.S. and then shipping them over. I also saw a lot of very expensive cards - especially Audi's. There are plenty of people there with money to spend.

The knock-off phones are pretty crappy - especially the batteries. I made the mistake of buying a knock-off video/MP3 player a year ago - battery life started at 2 hours, and went down to about 30 minutes.


RE: I'da thunk...
By Bateluer on 9/20/2010 8:22:03 PM , Rating: 2
Some of the knockoffs appear to be iPads/iPhones from a glance. Honestly, just because you saw someone using a device that looked like an iPad doesn't mean it actually was. Some of the iPad knockoffs I've seen at Slatedroid seem to be using the same chassis as the iPad, just a different display and internals to keep it dirt cheap. Hard to tell from just glancing at the device though.


RE: I'da thunk...
By theapparition on 9/20/2010 8:34:53 PM , Rating: 2
Most of the best knock-offs are never exported, and hence you never see them.

There are pretty good iPad and iPhone clones all over in China, running thier own OS and MUCH cheaper. No wonder the iPhone never sold well.

Typical for the chinese. We'll build your product with basically legalized slave labor. You stupid Americans and Europeans can buy cheap goods, while we steal your product R&D for our own use, then undercut the American/European manufacturer later. Eventually, we'll make everything while you economy colapses.


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