iPhone in China Still "Selling Like Hotcakes" (And So Are HiPhones)

Henry Blodget | March 20, 2008 4:44 PM

Our man in Beijing just bought himself a swanky new Apple iPhone (AAPL) for 4,000 RMB ($520ish). It came unlocked, of course, and ready for his SIM card.

(At least our man thinks he bought an iPhone. The Chinese knock-off "HiPhone" sells for about half that, and he says you can barely tell the difference. See video below.)

The last number our man in Beijing heard for China iPhone sales was 600,000, up from the 400,000 that China Mobile (CHL) reported at the end of 2007. The number of HiPhone sales? Incalculable.

As you may recall, our man in Beijing bet us a steak dinner that the iPhone would not arrive officially in China before the end of 2009. Our man is feeling pretty good about now. Why?

Because why on earth would China Mobile (owned mostly by the Chinese government) agree to give Apple a cut of monthly iPhone subscription revenue, when China Mobile can just sell SIM cards and keep all the revenue for itself?

Why, indeed.

Want to play the-iPhone-in-China trend? Buy China Mobile. And, of course, Apple, which makes a pretty nice living on the unit even when its not pigging out on those monthly subscription fees.

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25 Comments

Dan Frommer said:

Mar. 20, 5:03 PM

One reason they'd want a deal with Apple: So their subscribers wouldn't have to re-unlock their phones every time Apple puts out an iPhone software update.

Tim F. said:

Mar. 20, 5:24 PM

Our man, our man, our man... Is this a Graham Greene novel?

Dan Butterfield (URL) said:

Mar. 20, 11:48 PM

The case for Apple and China Telecom partnership and a dual locked and unlocked iPhone launch in China…

The China telecommunications industry is in the midst of a major restructuring that has (and will continue to) directly affect Apple’s iPhone negotiations with carrier partners in China. The recently concluded National People's Congress (NPC) served as a forum for China carriers and ministries to finalize the restructuring details and behind-the-scenes implementation plans are now in full swing.

Perhaps most relevant to Apple is the soon to be announced China Telecom acquisition of China Unicom’s CMDA division. China Telecom will also be granted a 3G license and may well win the rights to build out the W-CDMA 3G network. The rights to W-CDMA are key to securing a deal with Apple. I expect a battle for the W-CDMA rights as both China Mobile and China Telecom will aggressively lobby the MII for the rights to the W-CDMA 3G protocol. China Mobile has been given the responsibility for making TD-SCDMA a success. A daunting task see - http://idannyb.wordpress.com/2008/02/01/rumor-china’s-td-scdma-3g-may-not-be-long-for-this-world/

The MII may force China Mobile to keep on their TD-SCDMA “indigenous innovation” path and leave the prized W-CDMA network to the newly constituted China Telecom. If this scenario plays out, China Telecom will become a serious competitor to China Mobile and viable iPhone partner for Apple.

Look for China telecommunications industry restructuring announcements post Olympics. The logistics of restructuring may take the balance of 2008 to finalize and “iPhone in China” launch via a carrier partner may therefore be pushed out to early 2009.

This does not mean that Apple will be precluded from officially launching the iPhone in China in 2008. In fact, I expect that Apple will pursue a dual (locked to carrier + unlocked) iPhone launch strategy in nations such as China where the majority of customers are pre-pay (not on contract). Apple COO Tim Cook hinted at the Goldman Sachs Technology Conference that Apple would be open to new business models.
http://idannyb.wordpress.com/2008/02/28/apple-is-open-to-new-iphone-business-models/

~ Dan Butterfield
Editor, iPhone in Asia

Cryptblade (URL) said:

Apr. 01, 12:57 PM

As a Taiwanese Diaspora, I can say emphatically and definitively that any American company hoping or counting on doing business with China can forget about it. In fact, any dreams of cha-ching can stop and shatter completely.

With the American economy in near shambles, the Chinese will be more emboldened.

The thing that Westerners do not, and seem to never want to, learn (except hawkish Republicans, God bless them) is that the Chinese mentality is "what's mine is mine and what's yours is mine"

Apple will make money, but not the windfall they hope it will be. HiPhones will rule and the Chinese gov't will continue to reap profits.

And democracy will never come to China.

charanischiu said:

May. 17, 9:00 AM

whenever who will be the first to launch 3G service in Mainland China, Apple will decide who can be partner with the launch of 3G iPhone.

What Apple can now to first makes the move is to try to team up with Telecommunication company in SAR like Hong Kong and Macau to reflect the result.

The method can either be in yearly contract or special service program arrangement when purchase with the new APPLE 3G iPhone.

Do not wait until too many unlock iPhone appear in the market, since we like to own an official launch iPhone.

If APPLE only manufacture 10 millions unit a year, there are already 600 million incentive customers from all around the world, which means the last one of them will need to wait 60 years, how about the customers from Mainland China? Our son/grandson might have a chance to get one here?

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