I’m giving kudos today to China Telecom (HKEx: 728; NYSE: CHA) for finally doing what no other company has ever done before: getting China included in the upcoming global launch for Apple’s (Nasdaq: AAPL) newest iPhone. Meantime, China’s homegrown Apple wannabe Xiaomi is taking another page from its role model, with media reporting the fast-rising smartphone maker is preparing to launch its first tablet PC right around the same time of the global iPhone debut.
As a longtime China tech watcher, I can say the inclusion of China in Apple’s latest global iPhone launch is easily the bigger of these 2 news bits, and is long overdue. China is now Apple’s second largest market after only the US, though its sales and image here have been slipping over the last half year for a number of reasons.
One of those reasons is the rapid fading of Apple’s “cool” image due to several scandals and attacks from the Chinese media. But the fact that Apple has never included China in one of its global iPhone launches is certainly another major factor, since it shows a certain level of disrespect for Chinese consumers. The late arrival of new iPhones to China, often several months after their global debuts, also means that much of the buzz from their global launches is gone by the time the phones reach Chinese customers.
There are several reasons for the delays, most notably heavy regulatory requirements before any new cellphone can be sold in China. But another major obstacle was China Unicom (HKEx: 762; NYSE: CHU), the disorganized telco that was Apple’s only China partner until China Telecom broke that monopoly last year.
Media are reporting that the more efficient China Telecom has done what Unicom could never do, and actually signed a deal to bring the iPhone 5S to China before the model’s official launch. (Chinese article) Foreign media have been buzzing about the new iPhone for a while now, with the latest reports indicating a launch schedule will be announced at an event on September 10. Local media are saying that China could very well be included on the global launch schedule this time thanks to China Telecom, which could give both Apple and China Telecom a nice boost.
Meantime, let’s look quickly at the latest news from Xiaomi, which has been in the headlines for much of the last week after luring a top executive away from Google’s (Nasdaq: GOOG) Android operating system unit. (previous post) Media are now saying that Xiaomi is planning its own major product launch this week, with plans for a 7-inch tablet PC called the Mi-Pad. (English article)
Xiaomi’s entry to tablet PCs isn’t a huge surprise, since media reported such a move back in June. (previous post) Echoing the earlier reports, the latest ones say the new Mi-Pad will retail for 999 yuan ($163) and is being manufactured by Foxconn (HKEx: 2038), which also happens to be one of Apple’s main manufacturing partners.
I said at the time of the earlier rumors in June that Xiaomi was fast becoming a boring company because its product strategy looked almost identical to the much larger Apple. Since that time, Xiaomi has managed to regain some of my interest, first by landing a massive $2 billion in new funding, then by reportedly preparing to enter the TV gaming console market (previous post) and finally with its stealing of Hugo Barra from Google.
This new jump into tablet PCs should be interesting, especially with such a low price tag that will undoubtedly appeal to cost-conscious Chinese consumers. The Mi-Pad is priced well below the cost of Apple’s iPad, and is also considerably less than the 1,499 starting price for Amazon’s (Nasdaq: AMZN) Kindle Fire tablet PCs, which went on sale in China in June.
Bottom line: Apple will get a boost by finally adding China to the global launch for its upcoming iPhone 5S, while Xiaomi’s new tablet PC is likely to see moderate success.