That Was the iPhone Event that Wasn't

Reactions to the new iPhone have been lukewarm at best.  In America, it was a bit ho-hum, and Chinese netizens wanted to tear Tim Cook a new asshole when they found out how much the phone would cost.  The new handset, hyped up beyond recognition as the "cheap one" that would go up against Xiaomi's 1999rmb smartphone is only marginally cheaper than previous versions, attracting a large number of negative comments on microblogs across China.

"I thought the cheap 5C version would be priced at one thousand or two (yuan)... I can't sell my kidney for this much," said one poster on Sina Weibo, China's hugely popular Twitter equivalent, referring to a teenager who sold a kidney to buy an iPhone and iPad last year.

"So this is the so-called cheap version? The 5C starts at 4,488 yuan in China. Haha, they treat the Chinese as peasants," said another.

Boasting support for China's TD-LTE, a deal with China Mobile is possible, but hasn't been sealed yet.  With a four thousand kuai price tag, Apple seems hell bent on shutting out a large number of CM's subscribers, giving added impetus for consumers to spend their cash on the local boy made good, the Mi-3.

The only silver lining on this particularly grey and uninspiring cloud is that with the rollout happening in China and the US, Hong Kong, UK and other countries on September 20th there'll be fewer shady characters skulking outside of universities offering foreigners clammy grey-import iPhones.  So yay for that.  Kinda.

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Moto X Costs $4 More to Be Made in the US

Google won praise for moving it's manufacturing plant from China to Texas, but there won't be a Made in America revolution anytime soon.

The extra cost of making the Moto X is a mere $4, but there are other reasons why tech companies won't be in a hurry to move their production bases from Asia back to the US.  The first thing to remember is that the costs of production that have been bandied about on the Intertubes are just estimates, Google hasn't officially commented on the costs (yet).

According to industry experts, the Moto X cost $12 per phone to make the phone in America, whereas it costs Apple $8 per phone to make their iPhones in China, and 50 cents more for Samsung to have it's Galaxy S assembled China-side too.  While a difference of four measly dollars might not look that much, per unit, it adds up to a hell of a difference - $550 million worth of a difference if you believe unofficial figures.

It's true that Apple is shifting it's production of the Macbook to the US, but the Macbook represents a minor product line compared with sales of iPads and iPhones.

The way that Chinese companies house their workers on-site in dorms improves effeciency, especially when last minute design changes are made.  Larger pools of labour and technicians are available in China compared to the US - Apple has 300,000 technical staff supporting it's assembly line workers at their plant in China.

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Change in China: Mindboggling Stats

China Skinny has gathered together an impressive page of stats just in case you didn't quite get how much China has changed (and how fast).

In 1990, China had a total of 5.4 million vehicles on the road.  Fast forward 22 years, and 19 million cars and trucks were sold in China in 2012 alone.   As recently as 2010, Nokia had a 70% share of China's smartphone market.  In the first six months of 2013, 150 million smartphones sold in China and less than 5% of them were Nokias. Even with all the food scandals, Chinese consumers are eating almost three times more meat than they were in 1990, including 1.7 million pigs a day.  But it is urban migration that's really changing consumer habits.  Since 1990, China's urbanisation rate has more than doubled to 53% and there are now more than 123 Chinese cities with more people than Barcelona.

Consumer spending still lags behind the US, but that's all set to change in 2018, barring any apocalyptic showdowns with Japan, or a nationwide bird flu epidemic, that is.

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More iPhone 5C Photos

 



Not content with an moronic celebrity leaking pictures of the new Apple device, another photo of the iPhone 5C was posted on Weibo, along with the message :

"The low-end iPhone 5C to be launched for Chinese consumers in September doesn't look much different than the Xiaomi Phone 2, right?"

 

Allegedly taken by an employee at the Pegatron factory, the batch is more than likely a test batch to confirm that the devices are working before they are boxed up for retailers.

In China, Cheap Phones Rule, Apple Suffers

The smartest move by made in China by any phone company was by Nokia.

Trying to sell their phones to the Chinese for five times what Chinese consumers could afford at the time crippled sales, and Chinese companies were more than willing to crank out cheap, ripped off designs.  Nokia responded by dropping the price of their flagship handset to the same as the price of the shanzhai units.

In the last 15 years, the Chinese are no longer stealing designs, but making their own, and still managing to undercut the competition.  Android's open source nature has created a virtuous circle, giving phone manufacturers the software they need to power the phones, but leaving it up to the makers to source the hardware.

Attempting to figure out the smartphone market in China isn't easy.  Despite higher sales than Apple, Samsung hasn't raked in the revenue that's it's Cupertino based rival has:

By right Samsung should have been able to capitalize on this particular weakness of Apple, given that it has a whole range of smartphones with different price points targeted at a variety of consumers. In terms of unit sales, Samsung is doing extraordinarily well, given that analyst firms have consistently ranked Samsung as topping the charts in China’s smartphone shipments.

With Xiaomi making it's much vaunted debut in the Chinese smartphone market has caused something of an upset.  Their CEO doesn't want you to call it China's Apple, but they're going to have a hard time dropping that moniker.  Even if they aren't aiming at the higher end smartphone market, by smartly tying in services and deals with existing Chinese content providers, they do everything that the average Chinese consumer wants - at a much lower price, depressing the market price for higher end models.  Working smarter, means that as Apple and Samsung lick their wounds for Q2 2013 Xiaomi is aiming for double it's revenue in 2013 than it made in 2012.

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