Tuesday, April 02, 2013

Apple apologizes in China - getting ready for a world of low cost iPhones?

After being hounded by the Chinese media for discriminatory consumer practices in China, Tim Cook today apologized to the people of China.

Tim Cook apologizes to China

You gotta wonder why such a mighty giant whose guiding principle has been "consumers don't know what they want - Apple needs to tell them" is kowtowing to the People's Republic of China.

I tell you simply, they are running out of steam in the US and Western Europe and are looking to the next frontier...China.
But here's the rub. The entry level iPhone 5 in China is 850 USD.
And to succeed in China you cannot do it with one model starting at 850$.

Which is why why Samsung is #1 in China followed by Lenovo. Both have a range of smartphones but more importantly - can get into the volume market at 200-300$ smartphones.

So Apple is going to have to bring in a low cost iPhone if they want to win in China.
And that is going to hit their margins.

But clearly Tim Cook understands the need to bow before the largest consumer population in the world. Because if they don't take a bite of his apple - he's getting thrown out of the Garden of Eden.

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