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.”
Though conceding that negotiations on that front between the consumer electronics giant and carriers in the world’s largest telecoms arena have been “opaque” at best, Sacconaghi thinks Apple is getting tougher.
“It’s a testament to the fact that they’ve been negotiating pretty tough” that the iPhone’s introduction had been delayed,” he said.
Problem is, Apple may be underestimating the Chinese government’s tendency to want to control content — especially mass consumer content — and its distribution. Apple, which also jealously guards ultimate control of the applications or programs sold through its Apps store, may have finally met its match.