Monday, July 30, 2012

Apple Struggling in China...who could have predicted that...

http://www.ft.com/intl/cms/s/2/4072e1aa-d7d3-11e1-80a8-00144feabdc0.html#axzz227lQvLIW




Even though everyone says China and India are the emerging markets I keep saying people who make slave wages won’t be buying your expensive products. People said I didn’t know what I was talking about. But here it is…Exactly as I said.


If you make $17.00 a day you will not be buying a $500.00 Ipad. Sorry…but not going to happen. Anyone who is surprised by that isn’t paying attention.


When Apple officially launched its latest iPad in China last week, the big crowds and long lines seen at earlier such events were absent. A trademark dispute had delayed the iPad’s Chinese release but even in March, when the new tablet became available in the country through unauthorised resellers, retailers complained they had to slash prices 30 per cent in the first week because consumers were unenthusiastic. I am unenthusiastic about buying a Rolls Royce because I can’t afford it too. These people can’t afford Ipads. It is great that Apple saves money by only paying $17.00 a day, but those wages won’t afford an Ipad.
Tim Cook, Apple’s chief executive, said on Tuesday that there was no “obvious economic issue” holding back growth in China. Except that they can’t afford it. But some observers believe that the Chinese addiction to Apple products is fading because consumers are getting spoiled for choice and are becoming more price-sensitive because of the slowing economy.


Samsung, which had already been taking share from Apple in the Chinese smartphone market last year, has kept pushing out new models with equally attractive design and features but lower price tags. Huawei, the Chinese telecom equipment maker that is diversifying into consumer gadgets,offers sleek smartphones at a fraction of the price of the iPhone.


But some analysts see Mr Cook’s comments on India, where the iPhone is struggling to make headway, They don’t make much money in India either. Good for employers. Bad for sellers. They made their bed so now lay in it. as more concerning for Apple’s longer-term growth prospects as US and European smartphone markets become saturated.


In India’s price-sensitive markets, iPhones remain either the reserve of the wealthy or are relegated to the second-hand or black market.
Sunil Kashyap, 27, says the latest model – at nearly Rs39,000 ($706) – is well outside his budget.

“I like Apple; all my friends think it’s cool,” he says. “That’s why I bought an old model from a friend for Rs10,000 because otherwise it’s just too costly.”


The iPhone’s average selling price was $630 during the most recent quarter, according to Canaccord Genuity. Most of the Google-based handsets cost less than $200






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