China Takes A Bite Out Of Apple

The iPhone has come to China. As was widely predicted, sales nosedived as soon as the sleek new model hit the stands.

In the iPhone’s first foray into the land of one billion potential customers, Apple is making a rookie's mistake, taking a marketing strategy that has worked well internationally and forcibly applying it to the unique Chinese market.

The problems are multiple: ridiculously high prices for the targeted market, unlocked iPhone models imported from Hong Kong, China Mobile’s “OPhone” rip-off. It makes one wonder just what rock Apple had its head under while building a China strategy.

Five years ago, a lack of market access and knowledge would have been acceptable excuses for this kind of marketing bomb. But not anymore. As China opens its market, there is no shortage of available information about how to do business in China, and a number of reliable consultancies that would have been able to help Apple avoid such obvious mistakes.

However, the Wall Street Journal reports that Apple's bungled marketing campaign, coupled with unrealistic pricing has created opportunities for some. Li Haiwei, owner of a mobile-phone store in Beijing that resells iPhones on the gray market, thinks the iPhone's official launch will help him draw consumers attracted by the publicity but repelled by the iPhone's high price.

Perhaps Apple should pick up an iPhone and call Mr. Haiwei, and ask how much he is charging his customers.