Wednesday, June 27, 2007

Challenges ahead for the iPod & iPhone in the China Market

In college it seemed like that I was the only one without an iPod. Everyone had one. Not only did consumers in the US embrace the iPod, Shuffle, Nano, ect., they also bought up the Powerbook laptops, G4s and now.. iPhones. Everyone.

In China, its a different story. Apple has very little presence here. Although all of its products are manufactured in the factories in Guangdong province and Shenzhen, no one actually has them here. When I have my iPod out on the subway or bus, everyone stares at it. They've never seen it.

What Chinese people have seen are the generic iPods. Since everything is produced here, there are hundreds of small factories and software houses that have copied all of Apple's products. These generic mp3s, and mp4s (with color video capability) have been out on the market for many years. It's possible to get these wholesale for less than $10... and Chinese people have been buying them. Apple and its products have little, if any presence here.

Well, i guess Apple is attempting to change that. In recent months, there has been a significant and growing presence of Apple marketing. Not only are they opening more specialty shops in the most glamorous malls, but they are also putting up ad campaigns on the street.

2 days ago, I also (finally) saw an iPod commercial on Chinese TV. It was the same exact one that Steve Jobs showed off at this year's Apple convention (where he introduced the iPhone)... instead it had Chinese subtitles on the bottom. Good start.




We'll see how the Chinese market develops for Apple and its wide range of products. It's success here is far from certain, however, as many people have discussed the issues of it. A great post on Silicon Hutong called "The iPhone is not for China" has already described a hard market for Apple to tap into. This is probably why a Chinese company has already made an alternative to the iPhone. Only time will tell.

5 comments:

Pete said...

Tons of people have iPods in Shanghai

Eric Nelson said...

I have a feeling I'm really going to enjoy your blog. I've just moved to ShenZhen and am really interested in your unique perspective. Cheers,

Becky

BlueVisor said...

BS. Everyone I know of has at least 1 ipod in beijing.

Mike said...

bluevisor,

i dont know what China you live in but very few people have ipods. A lot of people have small ass generic mp3/mp4 players... but barely any have the real deal 30gig one.

... and if people do have them, they are either rich or laowai.

Sean said...

Hi Mike, great blog about the difficulties Apple faces within the Chinese market. I think beyond China, other problems for Apple extend to Japan where smart phones have been a predominate feature for many years.

As far as the iPhone's production goes, do you know of any limitations within its supply chain? Are there significant risks (socio-political, environmental risks) to Apple's supply chain by having a large extent of the production occuring within Taiwan?

I am an MBA student at Griffith University, Australia and would appreciate any insite or assistance you could provide.

Kind Regards

Ryan