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"Only A Dozen Customers Showed Up To Buy iPhones" - Apple's China Expansion Already A Flop?
In an age with no earnings growth, the most important thing is the "story", primarily applicable to early-stage tech stocks, where the only thing that matters is growth potential if not present or near-term revenues, and certainly not earnings. Unfortunately for some more mature companies like Apple, that have lost their innovative flair and creative genius (with the passing of Steve Jobs), they too have no choice but to revert to the "story" meme, such as the one that Apple's recent and much delayed foray into China with the help of China Mobile, and its 750 million users, would result in a surge in revenue: after all just think of the millions of potential customers - so easy a 5 year old can visualize it. Unfortunately for Apple, even though its stock has gotten a recent boost as a result of the pick up in hopes of what China's addressable market may mean for the company's top line, the story is a bust.
The NYT reports that if judging by the initial response to Apple's expansion into China, then this too latest Apple "rollout" is set to be a major flop. To wit: " Apple has been counting on a long-awaited agreement with China Mobile, the world’s largest cellular operator, to reverse its fortunes in China. If the muted reception Friday, when customers were finally able to buy iPhones from China Mobile, is any indication, the companies may have to work harder to whip up enthusiasm. Instead of the round-the-block lines that have greeted Apple product introductions in China and other countries in the past, only about a dozen customers showed up to buy iPhones at the opening of a store in Beijing — despite the presence of a special guest, the Apple chief executive, Timothy D. Cook."
Why the dramatic cooling toward what was once the, pardon the pun, coolest brand around? Simple: Apple missed its window of opportunity.
Apple was once an iconic brand in China, where its phones have been sold for years by the second- and third-largest mobile operators, China Unicom and China Telecom. But it has lost ground to the market leader in smartphones, Samsung Electronics, and cut-price domestic rivals.
Its market share has fallen into the single digits.
A testament to how much the company is betting on its China expansion was Tim Cook’s trip to Beijing. Unfortunately not even his presence did anything to stir spirits and drum up any interest in Apple's latest (NSA-endorsed) creation.
“Apple used to be the must-have, aspirational brand for all wealthy and middle-class Chinese consumers,” said Shaun Rein, the managing director of CMR, a market research firm, and the author of “The End of Cheap China.” “But over the last year, there has been a real deterioration of the Apple brand.”
Apple is just the latest of a number of American technology companies to fall on harder times in China. Google was once a leading search engine in China, but then lost ground to a local rival, Baidu. Motorola was once a power in mobile phones in China, but then lost ground to Nokia of Finland — which, in turn, yielded leadership to Apple, Samsung and others. More recently, Cisco Systems, the maker of telecommunications network equipment, said that sales in China had been hurt by disclosures of surveillance by the United States National Security Agency.
Well if you must blame Big Brother go for it. After all there is a "story" to defend.
And then there is the whole pricing issue.
On Sina Weibo, a microblogging service, some users complained about the pricing of the iPhone 5S by China Mobile, saying they could get smuggled versions for less money.
“The model is the same,” one contributor wrote on Weibo. “I want the cheaper one.”
Even if enthusiasm picks up, the reality is that the bulk of the new user pick up will not be incremental growth but switchover from other networks:
in addition to the agreement with Apple, China Mobile has another big advantage over its two rivals — the fast new network it is building, using so-called 4G technology. China Unicom and China Telecom are still relying on the slower, previous generation technology.
But this is a mixed blessing for Apple, because analysts say some China Mobile iPhone sales will come from customers switching from China Unicom or China Telecom. As a result, estimates of iPhone sales by China Mobile, which have ranged from less than 10 million annually to more than 30 million, might overstate the overall benefit to Apple.
Over all, including the effect of customers switching from rival networks, Mr. Zhang said he expected Apple to sell about one million more phones a month in China as a result of the deal, on top of the roughly three million it has been selling.
In conclusion, "An Apple spokeswoman, Carolyn Wu, said the company did not plan to report first-day sales figures." One can see why.
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They rather buy gold than iCrapple products
Apparently no apple cult in china
No worries it was at one one those Best Buys that's closing soon.. :)
We no like you NSA phone. Go home, lound eye.
Apple should focus more on making a better product than Samsung and less on marketing to and depending upon a Kardashian culture.
Perhaps they don't like back-dooring much?
The 'special' guest should have been Jason Beeper or Trim Karbashian...the little people would have showed up in droves to take a peek and get an autograph.
Perhaps potential customers couldn't find their way to the Apple Store due to the smog.
It's the weather, stupid!
But the line was around the block next door to buy the jPhone, product of 'liberated' IP.
Dammit! I told Tim to avoid Retail- it's a fuckin' dead end.
The IPhone 5 has the crappiest battery life ever (apple confirmed that 8hr is normal when I complained) and cartoonish iOS7 is the most retarded phone OS ever.... Next phone is not an apple - they lost my business
iSpy device is no longer welcome
"Apple missed its window of opportunity."
Hitting the nail where it hurts.
Thus creating a "Window of Opportunity" for the Microsoft. Bill Gates must be smiling today.
Reminds me of the recent TV add: http://www.youtube.com/watch?v=wE7AQY5Xk9w
Where the woman's cool voice is the same as for the Buy The Dip clip on YT.
1, They already have Apple 'knockoff' iPhones.
2. There is a better product out there.
3. They don't have the cash to buy the overly expensive iPhone.
Perhaps the Chinese read the news. 'NSA spies using Apple products to read your data and peep on your underage kids undressing'
Good for them. Here's to Apple and the rest of the traitors spontaniously combusting.
Fuck Apple.
https://www.blackphone.ch/
About Blackphone:
No word on how they deal with the baseband OS issue, although the core OS will be a security-toughened Android variant.
Obama promised them all free phones so why buy one?
off topic. anybody notice all the trolls that used to pop up out of nowhere (with a 3 week ZH history) now pop up out of nowhere with a 3 year ZH history?
Yeah, I notice there's been a big drop in the number of comments overall here in the past week.
nsa roundup underway - see ya, got to answer the door...
I still miss the rantings of Master Bates and Johnny Bravo.
Of course Francis is somewhere looking at this with Leo K and Robotrader.
I too miss the rants. So in the nature of a substitute:
WOW!!! LOOK AT THOSE SOLARS!!!!! JKS is on a tear, and there's more .....
Harry Wanger was still my fave, that confounded and irrepressible Bull.
Or Spalding Smailes, the CAT truck driver with all the latest trading strategies...
bad economy so the 'funding' has dried up....you stop paying, they stop posting....
Yeah just got tired of your ignorant bullshit and decided to speak up.
Fuckin retards overran gthe site about a year ago (yes I mean you) and been driving it into the toilet ever since.
Try not to be such a douche and we won't have to troll so much.
Thanks. Bitchez.
Well aren't you a fuckin' rainbow in the morning??!!!
Lighten up Francis
A day without "juice" is a good day for FS
Not sure about that, but I can say the shill quota is gettin' pretty high on the night shift.
Gives me something to look forward to the am coffee...reading comments from ppl smarter than me.
Yes, it's called troling your own blog for clicks.
The big line was at the store selling copy iphones for a tenth of the price!!!
NSA spying technology killing Apple and Cisco sales abroad? What a shock, huh!
Not to worry....there is a new anti-NSA phone...called "blackphone"
http://rt.com/news/security-encrypted-smartphone-nsa-667/
When it and Android are completely audited by third parties, then it may be a solution. Until then it is from the frying pan to the fire. Although, Zimmerman is a good guy and has given us some great tools in the past. Still doesn't mean that hardware isn't owned by NSA.
Fuck you Apple, Verizon, Google, IBM, NSA and GCHQ
Whatever thou sow, thou shalt reap - The Bible
You forgot to include MSFT in your list.
Yep.
Fuck you Microsoft
And you forgot AOL too, just for old time sakes. Give them an FU too please.
Fuck you AOL
Surely RIM belongs on this list.
That would be "RIM job". Different category.
No mention of Android systems by name. Hmmmm....shrinking margins are a bitch.
.......could be due to the early release of ismog.
Why buy the real thing when I can get the knockoff at 1/2 price next door.
Not even half off, try one-tenth of the $800 price for a look-alike android phone that has a memory card slot and a swapable battery.
Maybe... Just maybe... The people working in the factories making a few bucks a day can't afford the product they make.
Or just can't stand to look at the crap anymore.
Probably made a few on the side and kept that inventory off the books.
The population of Beijing is 20.7 million. Everywhere you will find a few people who do not mind infinite spying by the NSA.
Apple can say goodbye to its sales in many markets such as China, India, Brazil, Hong Kong and Russia, Not to worry, regular tweets from Icahn will save the stock.
Cueing Reggie "Bitcoin Trust" Middleton...
That's "iReggie", both for his secret love of Apple and his not secret love of Reggie.
american tech is laced with whoreland security spy code, i would just get 2 cups and a string also
But isn't it kind of exciting to know that someone is actually listening, maybe even caring what I say! I look forward to meeting all of you at "summer camp".
"Good morning, students. I am Head Counselor Jeffries, and I will be your guide as we learn all about the hard working members of our intelligence community and federal government. It's important that you understand that your presence here is not because you're some sort of criminal. Rather, we just want to clear up an any misunderstandings and misconceptions you may have about our efforts. It's our hope that you'll be able to head home within a few months, once you've demonstrated a better appreciation for what we do. And yes, the bruising from the implants will wear off soon. We're sorry about that, but I think you can understand our precautions. Welcome to Camp Orwell, students."
Why buy an Apple when you can buy the knockoff for one third the price...
Hmm, you mean the Appla iFone?
Is that somewhat related to iFona Apple?
Well if that legend Timothy D. Cook. can't get the crowds in, what hope.
I understand that three of the twelve were Filipino cleaners, who had forgotten their keys.
Don't worry, the smog adjusted numbers will be outta sight!
Yes, wasn't the smog so bad in Beijing yesterday that people were advised to stay indoors? How were they supposed to get to the Apple store?
I wouldn't cross the street to see that maggot.
premium priced hardware - formula for failure
buy since the Fed is buying everything that moves - long AAPL - where failure is the new bull
I want the new NSA shock collar phone. Dials numbers as you begin to even think. Projects porn onto Google glasses snd and gives mild correcting shocks when you have badthink.
i-mshockedtm coming soon
Curiously how much does an iphone sell for in China? Better raise the price in the US so they can lower it? Maybe people in china have a problem buying stuff from people whose workers jump to their deaths?
Roughly $850 for the base model, or about twice the monthly wages of a city worker.
Just because a U.S. worker is willing to overpay for a phone, why would Cook think anyone else in the world would?
The dozen people were probably from one of the illegal slave shops Apple operates in China to manufacture the phones.
http://www.theguardian.com/technology/2013/sep/05/workers-rights-flouted...
Renting a crowd is so much harder in China.
It's China. They are all just going to buy the knock off version. the ryePhone.
The flop in China is just part 1, Apple phone sales will fall drastically and part 2 will be the rest of the world following.
Lets face it Samsung / Android / open source is in... and Apple is now fucked.
I wonder what Cramer has to say...
If Apple really wants to sell more phones, they need to release a phone that acts like a basic phone on wireless plans, but can do data on WiFi. There is a huge underclass (i.e. former middle class) that would buy such a phone but they cannot afford the data plans for smartphones. That is the untapped market - instead of trying to get people to switch from other smartphones (which are at least equal to iphones).
they do, it's called the iPod Touch, they sell millions of them.
Hmmm. Didn't know the iPod touch was a phone.
It wasn't a phone 2-3 years ago when I was looking for an iPhone without the phone part but the price was not much cheaper. Not sure about either front now though.
BERTIE:
Member for:
3 years 26 weeks
Just started posting today.
Damn, these guys have been hiding under the rocks for 3 fucking years!
Suck shit Langley!
It can be: http://www.youtube.com/watch?v=IymQBo0_kzg
You're missing the best part of this story - Tim Cook was there, bored and watching these 12 people come in over the course of the stunt.
Godamned fucking hilarious. Like an aging, B-grade porn star at an A-grade expo. Gold.
Was over like 18 months ago. The chinese are Samsung / Android mad now. Apple is not the IN thing anymore. Apple shares have no place to go except down. This is PC/MAC cycle all over again. Without Jobs, Apple is just a trust fund baby right now.
Yet another reactionary meaningless Apple muckracking by ZeroEdge. Apple is the ONLY device maker in China that doesn't contribute to China Mobile's 4G advertising, thus the iPhone is sold at full price, read FULL MARGIN. Amazing how that works, that Apple likes to actually make profits on its handsets.
ZH is the brand that's losing it's innovation, instead of interesting articles, all it does now is read the New York Times and RE-REPORT the news. Pathetic. But that's what happens when you're a perma-bear and hater of all things including good things like Apple.
I feel sorry for those who follow this blog religiously, as it has dispensed with some of the worst advice possible in the last many years.
If you reactionaries who hate the best most honest company in the world (as if there's a lack of crummy dirty companies out there) want to write something interesting that's NOT on the front page of two newpapers this morning, why don't you write about how Apple's massive options market creates a steady revenue stream for truly evil banks, and suppresses the stock price. Oh, bc you might actually learn something, or have to do work instead of reading the paper and making snarky comments.
I think it's possible that the Apple hater at ZH lost his job trying to make real money, so now he's just a bitter fool but still lacking creativity he didn't have at his last job.
Hey Bertie,
Loooooooooooooooong time no see. Seems like never.
BERTIE:
Member for:
3 years 26 weeks
Just started posting today.
Damn, these guys have been hiding under the rocks for 3 fucking years!
Suck shit Langley!
Wow. How did you get so butt-hurt?
zerohedge: gotta bang the narrative.
They call that a "dry hump".
"I crap" my kid plays on my android, there's your market opinion!
And my God:
Timothy fucking D. Cook was there.
LOL. Outstanding, keep up the good work!
Why get NSA'd by two countries when just one will do?
Spent all their disposable income on worthless relics like gold, nothing left for iCrap.
LOL, the Wall Street Pump and dump...
Hype and pump up traders and fund managers on prospects and then the big boys, like Goldman dump right before the news is released.
China is geared for export, not internal consumption. Besides many Chinese cannot afford high margin Apple products.
Maybe they weren't sure if it was day or night?
http://www.dailymail.co.uk/news/article-2540955/Beijing-clouded-smog-way...
lol, google never had command of anything in China. market share never got above 20% and their model basically requires them to have 50%+ to become profitable. it's why they were so willing to "make a stand" when they were uncovered for operating without a license and unwilling to comply with local law. Operate a site in the US where people are free to post plots and death threats against the president, then refuse to comply with laws demanding records to law enforcement and conveniently locate the servers offshore and out of touch. wanna take a wild guess what'll happen to you? So they took that little "stand" with their exit of services, but of course begged to keep their business license because all their top coders, well, the ones who do all the real work and are not just "hey, im an idea person", are in China.
Laomei - You have got to be kidding. The Chinese do some real things well like mercantilism. It isnt an insult. However, Chinese and also Indian companies lack creativity. Replicating building a widgit, no problem their uniformity toward that end is awsome.
But in the end, this is the big separator from east to west which is creative ingenuity. While our politics are still very poor at the federal level, states are now waking up that there is nothing left to grow revenue except through ingenuity. Look at NY's new program of no state taxes for start ups for ten years for example.
No disrespect for the Chinese, they have made leaps and bounds over decades past in many areas and whereas I wouldn t have done business with them in 2000, I now would. China and America are going to continue being business partner for a long time, because ingenuity needs distibution and that is a real strength. But each country will have to rebalance trade in the short term. I wrote an article called America and China Should Stop Finger Pointing and Get to Work: http://econintersect.com/wordpress/?p=1059 that discuss more on this topic.
Maybe they should have collected some of those workers in the nets around the Foxconn buildings and bussed them down to the store opening. I'm sure they can't wait to get their hands on one of them iPhones.
11 of the 12 walked into the store to escape the smog, the 12th was looking for a restroom - sometimes, a sure bet simply......[fill in the blank]
Timothy Cook hasn't realized that the Chinese market is rigged. Apple's launch flop is a result of Chinese nationalism and State intervention. You won't see that in the news. In this case, China Mobile didn't place any ads for iPhone, only for HTC, China Wireless Tech and Samsung. Yes, the Koreans understand the real rules of the Chinese game. So, instead of travelling to China, Mr Cook should join Donald Trump and say: Listen you motherf*ckers, we're gonna tax you 25 percent!
In case you have been hiding under a rock, FYI - Bejing has been under a total shutdown city wide because of the pollution index which has been going off the charts. It's a fucking mess over there! It would be like opening a pizza joint in New Orleans during Katrina. Funny how stories will selectively leave out critical details like this just to stir up shit and equally funny how people fall for the same shit over and over again.
So....just another day in Bejing then.
How did they know it was Tim Cook under the gas mask ?
so few turned up cos the fuckers where at the fake store 2 blocks down getting help from fake workers,real directions being shown fake ipads.
fake ipads well that is tricky made in the same fox con suicide cityfactory
Poor sales in China? So they're saying those workers in buildings with suicide nets don't have a lot of spare cash or free time?
I think I'll stick with investing in my own country. There are always better deals around the world, but it's crazy to invest in a country I have never been to.
Apple IS your own country. Their competitors are....
Korean: Samsung, LG
Japanese: Sony, Panasonic, Toshiba
European: Acer
Chinese: Lenovo, Huawei plus dozens of companies you've never heard
Taiwanese: ASUS
Apple is increasing the # of American employees it hires.
Apple is one of the ONLY brands doing anything about cruddy work conditions in China.
Apple has begun bringing some manufacturing back to American soil and is one of the few companies moving in that direction.
Apple is a leader not a follower in lowering it's pollution and recycling footprint.
It's one of America's greatest companies of all time, and what does it get for it?
Derision from ne'er do wells at ZH and permabear blogs.
Hatred from worker's rights groups.
Hatred spewed from American jobs sectors.
Criticism of its desire to sell only good phones, rather than go for market share at all costs.
You wanna know the reason why jobs move overseas, American intelligence agencies track your every move, the gov't taxes the crud out of you via inflation, and puts hard working great positive companies on the courtroom hotseat? Thre reason is YOU. YOU are the problem.
Member for:
3 years 26 weeks
Just started posting today.
Damn, these guys have been hiding under the rocks for 3 fucking years!
Suck shit Langley!
What's TRULY interesting isn't the NYT and WSJ articles threatening that Apple struck out in China, that's expected since they get spoon fed all their information from day traders at the big banks and clever hedge funds who'll cover their shorts before today ends and again next week. And it's not that ZeroHelp will tag along with anything that's negative during the day, regardless of whether it has merit, this is obviously because it gets a majority of its writers from adverse selection from the financial industry it lambastes.
But what's TRULY interesting, is for a website that supposedly prides itself on uncovering underhandedness and manipulation, it will miss tons and tons of truly awful corporate, banking, and governmental skullduggery bc it wastes so much time attacking really ANYTHING regardless of whether it's positive or good. But even MORE importantly, in a few hours, days, weeks, months and maybe even years, this article will look so stupid bc all it did was muddle the potential to actually get something right and make some money for people in this stock. Overall house-of-cards economy willing, Apple is going to be one of the top performers in 2014. It's not Apple's fault the country is run so horribly, or that customers with zero sense still have money swishing around their pockets. Do they profit from this? yes, they sure do. But all Apple does is make great product (and they even correct bad products quickly, and even FIRE those reponsible for bad product-- it's called accountability for those of you reading this and hating all day by skirting your day jobs). America SUES them for it. How many people responsible for stealing your money are behind bars right now? One maybe? (madoff). Every moron who borrowed money in 2000-2008 was bailed out, and all you can think to do is make the wrong choice on a stock bc of some still-horrible reporting agencies that by Monday will realize they can't even get an easy story right?
Continue hating, you're going blind, and you'll also lose all your money soon. It sucks, but it's true.
as for ZH, I expect better from you, and I blame the senior mgt for having zero qualityh control when it comes to releasing articles. But that should have been evident when they took money essentially to publish just about anyone who's negative all the time.
Member for:
3 years 26 weeks
Just started posting today.
Damn, these guys have been hiding under the rocks for 3 fucking years!
Suck shit Langley!