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This column originally appeared in Forbes

Last week Apple (AAPL) launched the iPad in China. Many analysts wonder whether it will succeed, after sales of the iPhone there failed to meet expectations. The initial results seem promising. I believe it will be a success.

Why? There are three key things Apple is doing right with the iPad that it failed to do with the iPhone when it launched it in China.

First, Apple is catering to the preferences of Chinese consumers better with the iPad than when it launched the iPhone.

With the iPhone, Apple made two key mistakes: It required multi-year phone and service contracts and it made users subscribe through China Unicom, a carrier that most people don't use. Our research suggests that more than 80% of Chinese consumers prefer to buy pay-as-you-go cards, because they feel they waste money on minutes they don't want when they sign contracts. They also feel tied down to one specific phone if they have to sign a contract, which is a problem because upwardly mobile younger consumers change phones an average of every 9 to 12 months. Then there is the hassle of changing phone numbers, which you have to do if you switch from the dominant carrier, China Mobile (CHL), to China Unicom (CHU), and which served as a huge barrier to sales of the legitimate iPhone (people who brought smuggled gray-market versions could carry on using their old China Mobile numbers, albeit with slower 2.5G data connections).

In the iPad's case, consumers don't have to sign any contracts; the launch is of the wi-fi version only, and no phone numbers are needed. Consumers know upfront exactly how much they will spend, and they won't feel they are paying for something they might not use.

Chinese consumers are not as price-sensitive as many analysts think, but they are only willing to pay when they perceive value. Otherwise they will try to cut corners as much as possible.

They do see value in buying an iPhone for social cachet, even when they can't really afford one. Many will spend two months' salary to buy an iPhone but then will mainly send text messages, and not make voice calls, to save money. Consumers want to display wealth and sophistication but also limit how much they spend, which is why so many gray market iPhones have been sold (around 2.5 million, by our estimate). People can show off gray market phones while avoiding minimum monthly fees.

Showing off even when disposable income is low is why younger consumers making less than $20,000 a year drive the luxury sales of products like Louis Vuitton and Gucci (OTC:GUCG) in China. It is secretaries making $800 a month, and not China's 750,000 millionaires, who buy Coach (COH) and Tiffany (TIF) products. According to interviews my firm, the China Market Research Group, conducted with dozens of Chinese billionaires and individuals worth over $50 million, nearly all of the truly rich do most of their luxury buying in Europe or Hong Kong, where it's more glamorous.

Taking consumer preferences into account isn't necessary only in China. Google (GOOG) should have learned from Apple's difficulties there when it launched the Nexus One phone in the U.S. Despite much fanfare, the Nexus One failed and has already been scrapped. Why? It wasn't a bad product. The problem was that Google tried to sell it via the Internet and bypass carriers. Most American consumers are locked into multi-year contracts with carriers (and their phones) and want to be able to see and touch a phone before buying it. Google didn't use the sales channel consumers wanted, and the result was the death of its product.

The key takeaway from Apple's and Google's difficulties is that no matter how good your product is, if you don't cater to consumer preferences, consumers just won't buy it. It sounds obvious, yet that piece of wisdom still eludes many of the world's best companies.

The second reason the iPad is likely to succeed where the iPhone didn't is that Apple didn't wait as long to launch it. The iPhone debuted in China more than two years after it hit the U.S. market. This time Apple waited only a few months, long enough for early adopters to travel to the U.S. and Hong Kong to buy an iPad and build buzz but not enough for massive numbers of people to have done so. By the time the iPhone officially launched in China, nearly everyone who wanted one already had one. What sane company would delay selling a key product to the world's second-largest consumer market, where retail sales continue to grow at 16% to 18% a year?

Companies must launch products in China quickly after they do in the U.S.--or even before. Porsche launched its new Panamera sedan in China first, before selling it globally--and now expects China to become its second-largest market by 2012, overtaking Germany. GM rolled out its new Buick Lacrosse in China (and even designed it in Shanghai) before introducing it in the U.S.

Consumer purchasing power is shifting toward developing markets, and rollout plans need to incorporate that change in consumer power. With international travel becoming more common and the Internet erasing information gaps, consumers are no longer willing to wait a year to get their hands on a product that they can buy immediately on eBay (EBAY) and have shipped globally.

Third, Apple finally opened up Apple stores in China. When the iPhone launched there last year, consumers had to buy official versions through China Unicom, because Apple hadn't yet opened its own stores. Not having dedicated Apple stores made Chinese people feel Apple didn't care about them, and the Unicom outlets didn't recreate the sense of happiness and creativity that is part of shopping at an Apple store. Our research suggests that store layout and design is the most important trigger for persuading Chinese consumers to buy products in most product categories.

Too many retailers create atmospheres that fit other markets but not China's. Take Wal-Mart (WMT), which has clean, well-organized aisles in its hypermarkets. This works great in many places, but it has failed to catch on with Chinese, who prefer to buy groceries in livelier, more crowded setting. The French supermarket Carrefour understands this, which is why it replicates local marketplaces within its grocery stores and is trouncing Wal-Mart in China. It's not just the product offering that needs to change; you've also got to get just right those last 10 feet the customer goes before buying the product.

Apple's stores are a step in that direction, and this time Apple is selling a product that Chinese will be happy to buy directly from it rather than from gray market vendors. Apple is beginning to get it right in China.

Disclosure: No positions

Source: Why the iPad May Succeed in China, Where the iPhone Failed