Beijing's Apple retail store in Sanlitun Village.
Photo by Charles Wiriawan.
In order to enter market, Apple agreed to disable wireless Internet on models sold in Mainland China
BEIJING, CHINA – After three years of negotiation, Apple’s iPhone will be released here this month but the phones are missing an important feature: an ability to connect with WiFi networks.
Apple worked with Chinese regulators for three years in order to introduce the sought-after iPhone to the Mainland China market. The company was required to drop the phone’s wireless Internet capability in order to gain government approval. The iPhone has already been a hit in China’s Hong Kong, which operates under a different regulatory scheme. In fact, many Mainland Chinese have paid a premium price for iPhone models from Hong Kong and the U.S.
Despite the Chinese version of the iPhone not coming equipped with WiFi access, many residents said they were confident that they could restore the service on the phones by performing their own “repairs.”
A salesman surnamed Li at Beijing’s Zhongguancun electronic market said it was ridiculous that the iPhone had no WiFi capability since it seems central to the phone’s primary service.
“Without it (WiFI), you can’t use it at restaurants and public areas that offer free Internet. It will take some time, but I believe we’ll be able to turn on the wireless features,” he said.
China, which closely monitors and regulates the Internet, has unintentionally developed citizens who are skilled at finding ways around government barriers. Earlier this year, China announced a “Green Dam” Internet filtering system that would be pre-installed on all computers sold in China. While creating a wave of criticism in the West, most Chinese were unimpressed about the proposal because they were certain that the filter could be disabled from the computers. The government has since scaled back its plans for the filtering requirement.
iPhone service will be provided through China Unicom, a state-owned company. The iPhone models are priced between $1,025-$1,171 USD, and come with a two-year service contract. The prices are far more expensive than the U.S. version, which start as low as $99.
A number of knock-off iPhones have been sold in China in recent years. China Unicom competitor China Mobile released an “O-Phone” in August to appeal to customers who didn’t want to wait for the iPhone. However, most observers feel that the iPhone will be a success in the world’s fastest-growing economy.
Chinese consumers overwhelmingly prefer foreign brands to their own because of a belief that the quality standards will be better, despite the higher price tag. Apple products are particularly in demand by China’s rising middle class because the brand carries a sense of prestige and status.
“Chinese brands can’t compete with electronics from the U.S. or Japan,” said Molly Zhang, a PR consultant in Beijing’s Central Business District. “Not only is the quality perceived as better, these days China is all about brand. Having an iPhone or drinking Starbucks tells other people that you aren’t a farmer.”
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Comments
Your iPhone price points are off-base. China Unicom has multiple iPhone price/plan options with generous subsidies that reduce the iPhone cost for “on contract” customers. There are even four (4) “free” iPhone options for those willing to pay a higher monthly rate.
Re no WiFi on iPhone. It's not yet clear whether the WiFi chip has been disabled at a software or hardware level.
China Unicom and Apple are working on a WAPI/WiFi iPhone for early 2010
I sure wouldn't want to be labeled a mere farmer or a country hick, so I'd certainly buy an iPhone if I were Chinese.
I hope Ms. Zhang is right about this because I'm worried that iPhone sales won't be as high as I initially expected before I saw the cost of ownership.
It seems like this ridiculous regulation will simply make black market iPhones all the more desirable. Chinese who have enough money to afford an iPhone will simply get one in Hong Kong or Korea or Japan or India or the US.
Do the Chinese outlaw wifi on the iPod touch as well? Typical dictatorship mentality that will be proven silly in a few years.
"Having an iPhone or drinking Starbucks tells other people that you aren’t a farmer.”
So true....
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