iPhones in China

Apple's iPhone (a combination cellphone & music/video player) is off to a mixed start. The iPhone apparently has not been selling up to the company's expectations in the United States so Apple reduced the initially inflated price by about $200. However, this angered people who had already bought iPods. Apple CEO Steve Jobs's initial response was basically tough luck, but after this further angered purchasers, he must have realized that pissing off your most loyal customers probably isn't the best public relations strategy and Apple announced today that it will offer $100 credits to people who bought iPhones at the initial $599 price (see Jobs Apologizes: Gives $100 Credit).

Ironically, while American consumers are griping about the iPhone price, some eager consumers in China have been paying about 3 times the U.S. price for iPhones that don't even work fully (Chinese are paying up to U.S. $1170 for phones that can make, but not receive calls). More ironically, Apple is not selling the iPhone in China yet and does not plan to introduce iPhones to Asia until 2008. The phones being sold are either counterfeits or legitimate copies being illegally sold in China (See Unauthorized iPhones on Sale in China). Here's a video showing one of the fake Chinese iPhones:



Apple's decision to release the iPhone only in the U.S. initially seems to me like a big mistake, reflecting a company that is ignorant of the Asian market and the reality of globalization. By ignoring Asia, Apple is passing up the chance to sell iPhones to the vast majority of potential customers for the device. Mobile phone use is extremely prevalent all over Asia, from highly developed countries such as Japan and South Korea to lesser developed countries including the India and the Philippines (see Cellphone Users by Country). China has the world's largest number of mobile phone users (around 500 million) and the number of Chinese mobile phone users is likely to keep growing substantially due the increasing middle class with disposable income.

Now I realize that Steve Jobs has a lot more money than I do, but being the profit-hungry, capitalist he is, I'd think he'd be working frantically to secure deals with Chinese (and other Asian nations) wireless service providers to offer the iPhone (which may admittedly not be easy). Consumers in Asia that want iPhones and can afford to pay for them are going to get them, whether they're legally available or not. Not having them available legally gives more time for fakes to take over and dominate the market. With the high prevalency of counterfeiting in China and other countries, businesses must figure out how to make their products legally available in all markets for their products in order to have a chance. Ignoring the majority of your customer base which results in buying imperfect, illegitimate copies just doesn't seem like good business sense to me. C'mon Steve, get on the ball or at least on the iPhone.

Beijing Pop Festival

Beijing will be rocking this weekend as the Beijing Pop Festival brings 30 bands to the stages in Chaoyang Park. Performers include foreign superstars as well as many popular, but lesser known foreign and Chinese bands. Saturday features performances by headliners Public Enemy and the New York Dolls as well as Chinese groups such as Joyside and Wang Feng. Sunday’s lineup features Nine Inch Nails (NIN) and the godfather of Chinese rock, Cui Jian (who was banned from performing in Beijing for *** years). Other acts include Brain Failure and bands from countries including England, Russia, Japan, and Sweden.

This type of event, featuring controversial artists like NIN and Public Enemy shows how much China has opened up in the past few decades. However, according to a Los Angeles Times article, this is just the latest in a series of social and economic juxtapositions that have become commonplace as China opens itself up to the world with increasing rapidity. They see government approval as official acknowledgment that Beijing, as it prepares to host the world at the Olympics next year, must expand its artistic offerings if it is to emerge as an Asian cultural capital.

There are still significant challenges to bringing foreign musicians to China since the Chinese government's Ministry of Culture must approve concerts by foreign performers and getting approval is anything but easy. The festival promoter, Rock for China Entertainment, had to submit detailed biographies of each group as well as lyrics to all of the songs to be performed well in advance of the concert. To gain approval for controversial rap group Public Enemy, promoter Jason Magnus described them as band with a ocial conscience and champions of America's black underclass. Somehow I can visualize Flavor Flav (at least in recent years) as a champion of anything other than himself, but who knows what the Chinese will make of him. Maybe the next thing will be a Chinese Flavor of Love TV show airing on CCTV.