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iPhone errors
Q&A with Shaun Rein
he Apple iPhone made quite handsets have the same problem, and compa-
T
the buzz in November with nies like Nokia have found a way around it.
its rocky official entry into the
Chinese market. Shaun Rein What about Unicom’s role in all of this?
talks about the source of Ap- Partnering up with China Unicom was also a
ple’s less than rave numbers, and the lessons mistake. China Mobile (CM) controls over 70%
that can be learned from it all. of the market. CM has a wealthier consumer
base, they have a trendier image, and they have
What were the mistakes that iPhone a reputation for better service coverage. Apple
made when entering the market? apparently tried to negotiate with them first,
Quite simply, Apple did not localize their offer- but my guess is that Mobile played hardball
ings enough for the Chinese consumers. A lot of because they have such a dominant position.
successful companies like Apple, including Wal- Using Unicom was a problem because con-
Mart and EBay, take successful models and ex- sumers would have to change phone numbers
Shaun Rein is that Managing Di-
rector of China Market Research
periences from the US and move it to the rest if they wanted to get the official iPhones Group (CMR), a strategic market
of the world. This doesn’t always work. because there is no carrier protability in
intelligence firm headquartered in
Shanghai, China. For more infor-
It’s important for companies to China. Many consumers were like -- Why mation, please visit their website at
understand particular consumer change for Unicom? There are also ru-
www.cmrconsulting.com.cn
trends and characteristics of the mors that China Mobile will put out the
market they are entering. Apple iPhone within 6-12 months. This is still
did not do that enough in China. just a rumor, but it affected consumer’s
They are so successful in the US decisions on whether to buy now or
they don’t want to change their wait.
model to fit other countries. Unicom has also been weak in their
Apple also tried to sign customers iPhone marketing. They advertised
up for year long contracts in China 3G but there was little that men-
but people in China like to buy charge tioned iPhone. It was a little bet-
cards because it’s less paperwork and ter in Guangzhou, where at least
they only want to pay for what they use. they had iPhone on the poster. We
They don’t like being tied down to multi- did one study and asked people what the posters
year contracts. Also, consumers in China want the were advertising and people often just had no idea.
newest technologies. Because iPhone didn’t release It comes down to this - China Unicom said they
Companies
in China for years, the Chinese bought cracked ver- would sell several million when the market opened,
like Apple
sions. Apple made some of these same mistakes in and they sold 5000.
India, which has similar consumer demands.
are so
Well, in your view does iPhone even have a fu-
successful
You have been criticized for your analysis – ture in China?
in the US,
many say you’ve overlooked other issues such Everyone who wants an iPhone already has it –
as Wi-Fi restrictions. Response? and when people’s current cracked phones die they they don’t
Many people blame the Chinese government for might go buy an iPhone, but it will take a while.
want to
the iPhone’s difficulties because of its restrictions iPhone does have a future because it’s a great prod-
on Wi-Fi. The lack of Wi-Fi definitely had an im- uct, and people who own one love them. However,
change
pact, because consumers could just buy a cracked the future just may not as big as analyst’s hope,
their model
version that included Wi-Fi. But many of my big- especially if Apple doesn’t change some of its
gest critics don’t get how Chinese consumers use marketing methods. It’s too early to call iPhone a
to fit other
mobile phones. While I do agree that Wi-Fi was a failure in China, but when you look at the numbers, countries
contributing factor, at the end of the day all of the there is obviously something is going wrong.
www.chainaonline.com JANUARY/FEBRUARY 2010 19
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