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Even With a Big Store in China, Apple Remains an Underdog There
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Apple will be opening 25 stores in China in 2010-2012. Its first store is a 16,000 square foot store in Shanghai. Apple was slow to cultivate the Chinese market. Most of its newest products like the iPad and the iPhone 4 are not available in China. Apple is moving aggressively in the Chinese market to make up for lost time. It has 2000 authorized dealers in China, with 800 added in just the first quarter of 2010. Official restrictions also play a part. For instance the iPhone was officially released in China 2 years after it was launched in the USA, because of the long time negotiating with state run telecom companies and restrictions. In the meantime 1 million iPhones came into China through tourists and smuggling.
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Apple's iPhone 5 is targeted at a lower price segment of the market. It will cost $99 in the U.S. In China where Apple has about 5% market share compared to 18% for Samsung, Apple still focusses on the high end of the market because the iPhone 5C will cost about 4500 yuan or about $733. Customers in smaller cities in China are looking for phones in the 1000 to 2000 yuan range. China's Lenovo, HTC and Huawei are increasing market share with lower priced smartphones. In China subsidies for the phone kick in later with lower phone bills unlike what happens in the U.S., where the phone costs less when purchased.
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Apple is going after the Chinese market in earnest in 2010 after a slow start.
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