Changing China

Giant on the move

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from Summit Notebook:

Apple’s iPhone takes slow boat to China

In China, Apple's iPhone commands a strange presence. Perenially "coming out", already widely available on the black market, viewed with trepidation by local telecom players but with undisguised lust by affluent consumers.

Sanford C. Bernstein Toni Sacconaghi thinks the wildly popular device will arrive in the Middle Kingdom before the end of the year, after a long haul of negotiations with state-run telecom carriers keen to control the content to be sold over the gadget.

Some sticking points thus far: Sacconaghi says Chinese typically spend $10-$15 per month on data services -- everything from stock quotes to weather forecasts -- wheareas your typical iPhone user in the developed world now spends $70. That limits the Chinese carriers' ability to subsidize the iPhone. But the analyst thinks that in one to two months Apple may unveil a cheaper version of the device that can lower the cost of the phone to lower-paying Chinese customers.

"You're struggling with how to monetize the iPhone", he told the Reuters Global Technology Summit. "It could be used to let carriers pay less."

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