Chinese iPhone Sales “Disappointing,” Perhaps Because iPhone Not Yet on Sale in China
by John Paczkowski
Posted on October 12, 2009 at 10:35 AM PT
“Sales of iPhone through China Unicom, to state it mildly, have been disappointing. Volumes since launch have run at a fraction of stated goals.”
So says Northeast Securities analyst Ashok Kumar, who, in a research note to investors this morning, warned that Chinese sales of the iconic handset are not nearly as good as expected. Certainly, they’re nowhere near capturing the full two percent share of the Chinese wireless market that some observers have predicted. Which I suppose makes perfect sense because the iPhone hasn’t yet gone on sale in China.
Let me say that again: The iPhone is not yet available for purchase in China from China Unicom or any other carrier–at least, according to Apple (AAPL), which is presumably in position to know. So how is it that Northeast Securities is issuing bulletins warning of lousy sales? I have absolutely no idea, but I’m looking into it and will update here when I find out more.
UPDATE: Kumar tells Eric Savitz over at Tech Trader Daily that his analysis is based on presales of the device, which have been occurring since Oct. 1. Reports Savitz: “[Kumar] says that Unicom has set a goal of selling 300,000 phones a month, which would be a little under 75,000 units a week; and he says that pre-sales in the first few days of availability were extremely low, at around 1,000 units.”
Huh. Okay. Though even taking Kumar at his word, it seems like quite a stretch to extrapolate “disappointing sales” from a few days of presale availability.
UPDATE: Nice analysis of all this from Dan Butterfield at iPhonAsia.
Comments
I have been living in China for past 9 years and let me tell you, iPhone was available in China from the day one it appeared in US. Though it was not through the official channels, it was available just about in any electronics market around any major city in Beijing. Of course it had to be hacked in order to use it one China Mobile network, but that was done on spot if not already hacked before putting it on display. If the sales would appear disappointing, then perhaps because it is not a novelty to Chinese as it was 2 years ago. A short walk to any Starbuck in Beijing or Shanghai and you will notice that most people there are well equipped with the latest Apple gadgets whether available through oficial channels or not.
Posted by Dariusz Zarebinski at October 12th, 2009 at 11:21 amThere is no excuse for Kumar’s faulty analysis.
Even if you are looking at pre-orders, you have to factor in that gray market iPhones are on sale today, and for the past 2 years, so there is no need to pre-order an iPhone if you want one. Some have said the official iPhone (without Wi-Fi) will have its most fierce competition from unofficial iPhones (with Wi-Fi) that have a 2 year head start. It’s not hard to imagine that getting the phone in your hand today is a pretty compelling reason to go gray market instead of pre-order.
In other words, you have to tell me how many gray market units were sold alongside those pre-orders for an official phone to even begin to measure demand.
Also, if you want to measure iPhone demand in China, don’t you have to mention that during the time the original iPhone was on sale in the US only, Apple had to establish first a per-customer limit on total iPhones you could buy, and then they went to a no-cash policy, because people were coming into Apple Stores with $50,000 in cash to buy 100 iPhones and shipping them all to China and Apple could not keep them in stock for US users. Some estimates say that over 10% of all original iPhones were resold in China.
The anti-Apple bias today reminds me of the late 1980’s when everyone who was working for a computer maker other than Apple would happily tell you the GUI was a passing fad, a toy, or only useful for desktop publishing. The mouse was PURE CRAZINESS in the 1980’s according to analysts. That is why we’ve heard that business users don’t need Web browsers and other such beauties.
What the iPhone competition should do is stop paying analysts to knock the iPhone down, and start hiring MASSIVE NUMBERS OF SOFTWARE DEVELOPERS and adding sophisticated software to their phones as fast as they can. RIM is on the right track when they bought a WebKit browser maker. They should be hiring away PC software developers, enterprise software developers, Unix software developers. It’s clear that smartphones have to be every bit as sophisticated in their software as PC’s if they are to surf the same Web, do the same email, etc.
Posted by Fred Hamranhansenhansen at October 12th, 2009 at 9:19 pmNot sure what Kumar’s deal is. Back in 2007, he claimed the iPhone would fail, saying “The market is already saturated with popular [phones] that are virtually free to consumers.” His article used some weak Harry Potter metaphor as the iPhone as a “squib”. Just Google him and you’ll see…
Not sure what his deal is. Troll? Fishing for traffic? Either way he’s probably best just ignored…
Cheers,
Posted by Alex Ross at October 13th, 2009 at 2:25 amAlex