Tag Archives: Apple

China Telecom’s (HKEx: 728; NYSE: CHA) newly launched iPhone 4S has been hogging the headlines these last few days, with everyone scrambling to figure out if the debut of the popular smartphones by China’s third largest telco will be a success. The slew of media reports accompanying China Telecom’s iPhone launch on Friday, when it began taking orders for the 4S, seem to point to a modestly successful beginning. The company has offered a number of plans, each of which is priced about 100 yuan less than comparable ones offered by rival China Unicom (HKEx: 762; NYSE: CHU), the only other Chinese carrier with an Apple (Nasdaq: AAPL) tie-up which began selling the 4S in January. (English article) As to actual demand, media are looking at a number of angles, including online sales, store orders and comments from China Telecom itself to judge demand, as the iPhones themselves won’t become available until this Friday. The company itself is saying first-day sales exceeded its own expectations, though it isn’t giving any figures except to say orders in Beijing exceeded 10,000 units. (Chinese article) Meantime, another article is quoting China Telecom saying first-day online orders were strong, but there was no unusual activity at a China Telecom store also taking orders. On the whole, this looks like a relatively strong launch for China Telecom, which shouldn’t come as a surprise as many iPhone lovers are probably excited to finally have an alternative to Unicom, which had a monopoly on official iPhone sales in China since Apple launched the popular smartphones in 2007. I would expect China Telecom iPhones to see brisk sales when they officially become available on Friday, as consumers test the China Telecom service against Unicom’s. Word of mouth will be critical going forward, as I could easily see many iPhone users migrating to one service or the other in the months and years ahead depending on which telco gets the better reputation for iPhone service. Based on my limited knowledge, I wouldn’t be surprised to see China Telecom emerge as the early leader in the comparisons, in what would obviously be a major setback for an already-struggling Unicom. Meantime, China Mobile (HKEx: 941; NYSE: CHL), China’s only telco with no iPhone deal, is coming out with its own iPhone statistics, with Chairman Wang Jianzhou saying it has 15 million iPhone users. (Chinese article) Of course everyone knows that all of those users are unofficial, since China Mobile has no agreement with Apple, and all can only use their iPhones on China Mobile’s slower 2G network, since no iPhone is available to run on the homegrown technology in its 3G network. China Mobile at one point was talking to Apple about developing a 3G iPhone for its network, but those talks seem to have died a few months ago, meaning the company won’t have its own iPhone deal until 4G which is still at least 1 to 2 years off.

Bottom line: China Telecom is likely to emerge the victor in a looming iPhone war with Unicom by offering both better prices and service.

Related postings 相关文章:

◙ Price War Brewing for iPhone in China iPhone价格战料在中国打响

◙ New Developments, Including iPhone Deal, Heat Up 3G, 4G 中国电信iPhone销售和日益升温的3G、4G最新进展

◙ China Mobile: Improvement Ahead Under New Leaders 新领导有望助中国移动复苏

I’ll end my postings for this first day of March on a lighter note, looking at an entertaining marketing and price war that looks set to break out between China’s second and third biggest telcos, China Unicom (HKEx: 762; NYSE: CHU) and China Telecom (HKEx: 728; NYSE: CHA), as the latter prepares to start selling the iPhone 4S later this month, breaking Unicom’s monopoly on iPhone sales in China since Apple (Nasdaq: AAPL) started selling the popular smartphones in 2007. In a highly anticipated announcement, China Telecom, the smallest of China’s 3 major telcos, said last month it would start taking orders for the iPhone 4S on March 2, and start selling the model for use on its network on March 9. (previous post) That development broke Unicom’s 3-year monopoly on iPhone sales in China, just a couple of months after Unicom itself started selling the 4S. Unicom has been rather lazy during the last 3 years during its monopoly period, failing to aggressively market the iPhone even as sales of the smartphones were one of its few bright spots as it suffered with internal management and operational issues. Now that the honeymoon period is finally finished, Chinese media are reporting that Unicom’s Guangdong unit is preparing a “stealth” attack to try to draw more iPhone buyers to its service even as China Telecom gets set to offer its own aggressive packages. (Chinese article) According to the report from a local publication in southern Guangdong province, Unicom’s Guangdong subsidiary is preparing to offer new incentives in the form of extra memory to new iPhone subscribers who are referred by Unicom’s current iPhone customers. I would expect to see similar moves from Unicom subsidiaries in other provinces in the next few weeks, as they attempt to stop China Telecom from stealing both new and existing iPhone customers. China Telecom is likely to fight back with its own aggressive new packages and other incentives, meaning the next few months could be a very good time for anyone considering an iPhone 4S to sign up for service. On a more serious note, this kind of war could undermine both the top and bottom lines for Unicom and China Telecom. It could also seriously hamper efforts by China Mobile (HKEx: 941; NYSE: CHL), the country’s leading mobile carrier, to bring some momentum to its own laggard 3G network, which suffers from a technological disadvantage as it is based on a homegrown Chinese technology standard with numerous problems. In summary, look for a colorful and also bruising price and marketing war between Unicom and China Telecom in the months ahead, playing to the advantage of 3G cellphone subscribers but bringing a new round of potentially destructive competition to the the telcos.

Bottom line: A new price and marketing war will break out as China Telecom prepares to end Unicom’s monopoly on the iPhone in China, resulting in profit erosion for both.

Related postings 相关文章:

◙ New Developments, Including iPhone Deal, Heat Up 3G, 4G 中国电信iPhone销售和日益升温的3G、4G最新进展

◙ China Telecom 3G Drive Set For Boost With iPhone 4S 中国电信3G推出电信版iPhone 4S

◙ China Telcos In New Drives at Home, Abroad 中国三大电信运营商海内外发力