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Chinese iPhone Looks Poised to Fail

At Apple's all-night iPhone launch party in Beijing, there were none of the day-long lines seen in New York, London, or Paris. According to the Financial Times, the Chinese iteration of the iPhone, which went on sale on October 30, has stirred the interest of only 11.7 of Chinese cell phone users, according to one survey.


The device is poised for relatively flat sales in the world's largest mobile market thanks to its hefty pricetag: between $880 and $1,170 USD, depending on the model, in a nation where $3,000 is the mean annual salary. China Unicom, Apple's partner there and the country's second-largest cell carrier, has chosen not to subsidize the handset as much as companies like O2 in Europe and AT&T in the U.S. Buyers will also be discouraged to find that due to a regulatory snafu, the Chinese iPhone has no WiFi.

So-called "gray market" iPhones abound, brought from Hong Kong and other adjacent countries at about half the price, further reducing the iPhone's potential buyer base. ShanghaiDaily reports that China Unicom has a sales goal of only 5 million iPhones in a nation of over 700 million cell-phone users.

Further hurting the iPhone's appeal in China is its closed-source approach to software. China Unicom will be running its own app store independent of Apple's, so all the apps that western users have come to know and love won't be available on the iPhone in China. Furthermore, as GigaOm notes, Chinese buyers are more likely to respond to open-source solutions that are more easily hacked to obviate government censorship.

Should Android gain traction in the East, it might help funnel much-needed development dollars into the platform. Right now, most smartphone development is focussed on the iPhone OS, which boasts about 70 million users, and only secondarily on iPhone. Since localizing for language has become easy—many iPhone developers have had bi-lingual users offer translations for free—American and European developers might bring more enthusiasm to Android development if it catches on in China, banking on a big Chinese audience for a payoff.