At first, it was merely speculated--in that giddy, rambunctious way that attends all Apple moves--that the iPhone would be diving into China's 700-million-strong market of cell-phone users. Now it seems to be a near fact that Apple will announce a deal as soon as Friday, and avid followers of the company think the move may be transformative.
With the kind of passion that only Apple can inspire, at least one in-house fight has broken out already. In the Business Insider yesterday, Dan Frommer whacked his colleague Nicholas Carlson over the question of whether counterfeit iPhones posed a threat to Apple's business, docking him for getting "irrationally excited" about "half-baked facts."
More broadly, this surge in speculative buzz has helped blunt the momentum of souring opinion on Apple this summer, which the Wire has covered here and here.
What predictions are tech-pundits making for the China-iPhone alliance?
- Better Success Than in America, forecasts Alex Salkever at Daily Finance. He notes that China has better wireless broadband coverage and a willingness to pay more for premium brand-name products. More importantly, he says, is that Apple chose a smaller partner, giving the Cupertino company major leverage. "And Apple uses leverage very well. Witness the sweetheart deal it struck with AT&T, a deal that gives Apple an unprecedented revenue share for a handset maker and hefty subsidy for phones."
- Demand Already Erupting, write Juliet Ye and Skye Canaves in the Wall Street Journal. The two writers analyze the three routes by which Chinese customers desperate for iPhones have managed to finagle them (or their knock-offs) in advance of the release: the "gray market" of smuggled phones, buying them overseas, or purchasing cheaper lookalikes. "As many as 1.5 million" Chinese customers, they write, "couldn't wait" for the official release.
- Many Headaches and Roadblocks, worries Dan Frommer in his follow-up correction to colleague Nicholas Carlson's post. While generally positive about Apple's chances once the phone launches, Frommer enumerates a number of real challenges, including: "Negotiating with the carriers, which has so far taken many months," "Dealing with the fact that Apple's suppliers in China could leak prototypes or design specs to Apple's competitors," and "The complexity of doing business in China, ranging from formalities to the actual infrastructure required to support a country that's so big population- and geography-wise."
- Knock-Offs and Other Risks notes Douglas A. McIntyre at 24/7 Wall Street. McIntyre argues, as Carlson does above, that piracy will be a real problem as "the presence of counterfeit handsets is almost certain to rise as Apple increases its presence in the market." Eventually, McIntyre writes, "Apple may find, as Microsoft (MSFT) and other US tech companies have, that China is big place but not a profitable one to do business."