Is the iPhone finally coming to China?

Thu, Nov 13, 2008

Analysis, Finance, News, Rumors

There was an interesting job posting on Apple’s website today seeking an iPhone Quality Assurance Engineer to work in Beijing.  The job description is as follows:

“Software Engineering is looking for an extremely talented Quality Assurance (QA) Engineer to focus on international releases of our iPhone and iPod touch products for Beijing. You will work with an amazing team that prides themselves with innovation and a simple clean user interface. Responsibilities include running daily testing of software builds with a critical eye for usability and the ability to get to the bottom of complex issues. Strong regional knowledge is critical as this role requires working in local Apple in-country offices, focusing on regional specific functionality…”

So, could an official iPhone launch in China be in the works?  Well, I wouldn’t bet on it.  Similar postings for positions in China have been posted on Apple’s website before.

Initial talks to bring the iPhone to China stalled on Apple’s insistence that it take a share of the monthly revenue from each iPhone user.  Apple, however, stopped this practice when it released the iPhone 3G.  Now, instead of getting monthly revenue, carriers now subsidize the initial purchase of each iPhone.  So what’s the current hold up?  No one is exactly sure, but there have been substantial reports that China Mobile would only be willing to release a crippled iPhone 3G that couldn’t access WiFi networks.

It is also entirely possible that China Mobile has no desire to subsidize the initial cost of the iPhone in the first place.   But why not?  Well, another theory might be that China Mobile doesn’t need an official deal with Apple to begin with.  China would undoubtedly be a huge market for Apple, but hundreds of thousands of unlocked iPhones are supposedly already in use over there.  Not to mention, there are some spot-on iPhone clones that are also floating around China as well.  So, perhaps the demand for an ‘official’ iPhone isn’t as great in China as it is relative to other countries.  It’s also important to keep in mind the varying economies from country to country.  The average income in China is about 200 dollars a month, and it could also be likely that the iPhone would be economically out of reach for the vast majority of Chineese citizens.

Apple, however, recongizes the importance of getting the iPhone into China and will undoubtely keep making attempts to strike a deal.  With over 400 million subscribers (which is larger than the total number of people in the United States!), China Mobile is the largest cellphone carrier in the world, and securing a deal with China Mobile is not something Apple is likely to give up on.


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1 Comments For This Post

  1. Dan Butterfield Says:

    Does China Mobile have any motivation to subsidize iPhone? They are now subsidizing every TD-SCDMA handset and they will also subsidize the new TD iPhone 3G

    The average Chinese salary is low by Western standards. Can they afford the iPhone? Most of them? … an emphatic no! Tens of millions? … an emphatic yes!

    The average urban Chinese worker the makes the equivalent of about $120 US dollars per month. The average middle class salary is the equivalent of about $641 US dollars per month. Chinese tend to spend less and save more than their Western counterparts. It is not uncommon for middle class Chinese to spend the equivalent of one month’s salary for a luxury item; particularly if that item (iPhone) has status and gets used every day.

    What is most interesting is an October 2007 report on luxury goods consumption in China. The numbers tell a compelling story. China currently has:

    v An estimated 300,000 millionaires and rising.

    v A middle class of 250 million (making an equivalent salary of $550 to $1,000 US dollars per month) and rising.

    v A total population of 1.3 billion, that according to Ernst & Young, spent $6 billion US on luxury goods last year (2006).

    v And a prediction by investment bank Goldman Sachs that the percentage of China’s populace that purchase luxury goods will rise from 12 percent to 29 percent by 2015. This will place China second only to Japan in global consumption of luxury goods – worth an estimated $80 billion US a year.

    Much more here >

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