Although the existence of an Apple (AAPL) iPhone 5 hasn’t even been confirmed by Apple, and rumors suggest it wouldn’t be due out in China until late summer or the fall anyway—and Apple’s not really saying anything—the buzz in China has created a brisk pre-order market for the latest phone. Taobao’s e-commerce business site is already showing plenty of action by many would be vendors who have seized the opportunity to pitch the wares for, as what a Bloomberg piece pointed out, “a phone that might not even exist.” No matter. The measure of the frenzy is what’s important here.
Apple, Beijing District, Sanlitun China Source: GoogleImages/businessfinancialpost.com
Both Reuters and Bloomberg reported creative selling techniques employed by entrepreneurial folk who are eager to cash in on the Apple craze in China. One prospective seller is taking deposits of $160, while another has customers going all in, as it were, by having to pay the full $1,100 price. Things Apple are so desired in China—a phenomenon which isn’t much different than anywhere else, actually, that the selling, hype and frenzy tend to get just a bit ahead of themselves. It’s been pointed out that when the iPhone 5 was expected last year—when the iPhone 4S ended up being launched instead, some enterprising knockoff artists had produced something called the “HiPhone 5.” While not innovative, it certainly was creative.
Beyond The Frenzy
The explosion of smartphones and tablets that has gripped the consumer world, as well as the innovative development and marketing of and by Apple has reached a confluence of perfect proportions. Anything Apple is desired by the core of Apple branded fanatic consumers the world over, and with the switch worldwide by millions of consumers upgrading to smartphones from their relatively plain vanilla, so-outdated cellphones, the market for smartphones and tablets looks inexhaustible. Beyond the hard core Apple fanatics who line up at Apple stores in the US and the world over to buy any product with Apple stamped on it, millions of less brand loyal consumers also recognize the appeal of Apple’s iPads and iPhones. Simply put, they want them.
Apple’s Beijing Store, iPhone 4S Debut Source: GoogleImages/minnesotapublicradio.org
Appeal Grows In China
Though China is saturated with estimates of 900 million to perhaps as many as 1 billion cellphone users, the smartphone market has been running at about 15 percent of this. So Apple or not, there is the marketing vortex that is going to take in hundreds of millions of Chinese consumers as they upgrade to smartphones, as eagerly as anywhere else in the world. The development of compatible networks, and the build out of 3G and 4G platforms is a technology advance that is both necessary and is happening in Greater China.
Although there is much speculation about what features an Apple iPhone 5 might have, some of this speculation is included by the prospective sellers of the as yet imaginary though hoped to be real phone in China. Some of the speculation says it will have 4G LTE network support, and feature a 5 inch screen. Some sellers are even listing supposed features, one enterprising seller even published a list with the likely percentages that certain features would be included, according to the Reuters report. The technical specifications and mock-up photos have no doubt fed the excitement, although maybe not the accuracy, surrounding the much awaited launch. In the Reuters article, however, it was pointed out that this speculation may have kernels of accuracy, as the iPad 2 launch in China listed on Alibaba.com was accompanied by some accurate photos as sellers had gained some information on the device’s specifications. So, potential buyers are hoping for a repeat on that score.
What is the real thing assuredly is the iPad that will be released in China on July 20th. This version of the iPad began selling in the US in March, and is expected to retail for $499 to $829 in China when it debuts. The China market is real and substantial, as it is the second leading market for Apple after the US, and accounted for $7.9 billion of Apple’s second quarter revenue total of $32.9 billion. The iPhone 4S created a stir in China, even with the relatively scant network availability to support the technology. Chinese consumers, flush with ingenuity, have run the phones on the 2G networks.
iPhone 5 Anticipated Source: GoogleImages/iPhone5tipsblog.com
The iPhone 5 may or may not be real yet, and it may not come to China in the late summer or the fall, but whatever and whenever such a high demand offering by Apple does hit the streets or comes online, whether in Shanghai or via the black market, there will be eager, ready, savvy Chinese consumers willing to buy. With all this, Apple is becoming more and more a China story, too.
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