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  • More on Apple: Gross margin was 47.4%, up 270 bps Q/Q and 610 bps Y/Y. Cash/investment balance rose to $110B. Asia-Pac, likely driven by China, played a big role in the earnings beat: sales rose 32% Q/Q and 114% Y/Y, compared with 20%+ Q/Q seasonal drops for the Americas and Europe. iPhone revenue +85% Y/Y with implied ASP of $646, iPad revenue +132%. Mac desktops +8%, Mac notebooks -1%. Retail revenue +38% Y/Y. AAPL +7.4% AH. (PR) (CC webcast)   [View news story]
    Chinese suitcase enterpreneurs now shuffle already used iPhones of the Chinese market to less affluent SE Asian countries. I have seen them in Cambodia, Laos and Vietnam. That preps these markets for even more Apple products once income level raises. I recall a CNN report from Somalia a year ago and a village leader was sporting... iPhone....
    Apr 24, 2012. 05:16 PM | Likes Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    So why do people write articles here? I guess they feel that they have something smart to say and share, and take satisfaction from people reading and commenting it. Would it be fair to say? So how one can expect to retain reading audience by belittling, patronizing and ridiculing his readers beats me.
    Apr 24, 2012. 03:41 PM | 1 Like Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    @ Robert Weinstain: I don't think your example of milk scandal applies here, you know it and I know it. I am sure you pulled it for a spat, right?

    Similarily is your Goo phone exmple, it is an android phone looking as iPhone, so are many Samsungs. They don't label it as iPhone or sell it as iPhone. They are not trying to confuse, I wanted to write "you", I will settle for "consumer", because you seem to be confused enough.

    Apple may or may not have issues in China, that is a matter of opinion but if they emerge, they won't relate to fakes. Your comment on Chinese "experts" doesn't warrant a response (or place on this blog), but thanks for the entertainment.
    Apr 24, 2012. 01:31 PM | Likes Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    1) Most fakes retail for $50-100 dollars, are made from substandard parts. The "clones" if you read the specs, even assuming that they did not fake them, are pathetic when compared with iPhone.

    2) The company from link 2) appears to be assembling iPhones from stollen parts and was busted because stealling is a crime also in China. I cannot imagine large scale theft going on and going on undetected for long, so even if they were able to continue this business and produce a semi-real thing on a kitchen table, their volume would not be a threat (200 units weekly/monthly?) besides even Chinese know the iPhone 5 does not exisit;-).

    Most Chinese don't buy fakes these days and that goes not just for iPhones. I think Chinese readers of this website may atest to that. If you go to one of these markets in China that sell fakes you will see that all customers are non-Chinese. In Beijing it happens that a market with fakes is a stone throw away from an Apple Store. Just move over and you will notice that 1) it is crowded no matter what time of the day you go inside, 2) almost all customers are Chinese.
    Apr 24, 2012. 12:56 AM | 1 Like Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    Well said! I commented on similar article earlier with the words, I would agree if that it was saying "Apple will not FULLY dominate China YET". The only minor obstacle that would impact not the domination itself but the pace of it, is probably the distribution network. While I know that there are several Apple stores in China and many resellers, seeing people at Beijing airport hauling stacks of brand new iphones and ipads on domestic flights, tells that there is hidden demand in smaller towns and cities and room for distribution network expansion.
    Apr 23, 2012. 11:41 PM | Likes Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    IMHO there are no real iPhone fakes yet... unless you would argue that Yugo is a copy of a Porsche because both are hatchbacks, have four wheels, steering wheel and two doors...
    Apr 23, 2012. 11:10 PM | Likes Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    I second your opinion. Many people in China cannot afford flashy cars, swanky condos or a second kid, that takes a serious income and years of saving. On the other hand $1000 for an iPhone, for many and increasingly more Chinese it is not even one month salary. And Chinese save money in other ways what makes things like iphone more affordable though not immadiately apparent from the numbers. My monthly electric and water bill in US is higher than one year bill in similary sized apartment in Beijing. My mobile phone bill in Beijing was $30 vs $80 for similar package in US. You can have custom made cashmere suite for $200 in Beijing what would cost you easily a $1000 here.... You spend less on groceries, public transport, cable TV, etc. etc... So the $1000 salary in China takes you a lot further than it would in US.
    Apr 23, 2012. 08:04 PM | Likes Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    I feel that your knowledge of China is somewhat superficial at least with regards to fakes. The fake iphones in China don't run iOS. If a real Apple Store sold a fake iPhone, a customer would be right back and I guarantee you he/she would make such a stink you would be able to read about it in Chinese medias and hear on CNN.
    Apr 23, 2012. 07:51 PM | 2 Likes Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    Google withdrew from China because it could not crack Chinese market. After years of effort, it barely scratched 10% of the search market. Putting a political spin is a good PR. If Google was making money in China, they would find a way. For some reason everybody thinks that Chinese are preoccuppied with searches for "truth" (Tiananmen, Falungun, etc.). From my personal experience, most Chinese simply use search engines to find games, music and movies and update their blogs... Would Google pay more attention to Chinese customer, perhaps would find a way to crack this market and we would not have to feed us with tall stories of "ratious" Google fighting with "tyranic" China.
    Apr 23, 2012. 07:40 PM | 1 Like Like |Link to Comment
  • Why Apple May Not Dominate China  [View article]
    While I accept that the author has been to every major city in China, I happened to live there between 1997 and 2009 and since have been back in China at least twice a year. I think this article makes couple significant errors. Chinese that buy fakes (Gucci bags, or True Religion, etc.) arefully aware that they buy fakes, they do not confuse that with a real thing and they are not the Gucci's market. They buy it because it looks close enough to a real thing, but costs a fraction of a real thing. You seem to portray Chinese as being easily duped by imposters. They are not.

    The people that can afford real thing, want real thing and with middle class expending that market is rapidly growing. The best customers of LV and fine Swiss watches shops in HK are Mainland Chinese, because they want the real thing. The best customers for fake products in China are cheapskates of the world, from what I saw mainly Europeans, Africans,and yes, some Hongkongese.

    There was a famous story not so long ago in US medias about Chinese suing an Italian furniturestore for selling Italian designed furniture made in China under Made in Italy label (and pricing accordingly). That was not the manufacturer that sued the store, these were Chinese customers that were POed when they found out they were duped.

    On top of this is the "show-off" effect as Mostserene1 mentioned,and here is a real life example, a friend that is a salesperson in a shopping center in Beijing, making $1200 per month has iPhone 4 and an iPad. All her friends (making similar money) have iPhones too. How many people with even twice their income you know in US that would even approach doors of an Apple store (unless it is placed inside Wal-Mart;-)) that would spent that kind of money on Apple products.

    Then there is one child policy effect - if the only son wants iPhone, he will get it even if that means that a grandma has to empty her bank account.

    Then the gift giving culture and maintaining guanxi culture (mentioned).

    I have seen fake iPhones in China and they are optically (when turned off) a close copy. They however do not have the operating system that Apple has, nor have they resolution or the memory. Even a salesperson told me they will likely break after 3 months. The manufactures of fakes have failed so far to come up with technologically close enough copy and that is for a reason. They will not put retina display into their fakes, load it with memory and high-endcamera, can't or don't want to get A4 or A5 processor. For them it is all about looks and $50-100 price range. I admit I have seen a fake MacBook that happened to run OSX, but it would only take a blind person to confuse it with a real thing (I have seen also a Dell netbook in US running OSX). While running OSX on Intel computers is not a big deal, getting a fake running IOS has yet to be witnessed.

    Again, the people buying fake iPhones are not the potential Apple customers, so until someone comes up with iPhone fake that runs IOS, accepts apps, syncs with iTunes and iCloud, and takes 5-8 megapixels pictures syncs to iCloud,I don't think we have to sweat about copy cats. And even then... If you are a Chinese I can't think of a worse embarrassment than being flashed out with a fake iPhone in your hand. If you cannot afford iPhone in China, you better get a Huawei and stop being pretentious.

    But forget the whole fake thing! Chinese do not even want Samsung when the Samsung price approaches iPhone or iPad. I Heard many times Chinese customers saying in a store that for that price or for just a little more they can get a real thing (and the real thing meant iPhone or iPad)...

    So regardless of whether the author visits China, flies over China or just reads Apple future of the fortune cookie, I am confident that Apple will be a huge success story in China.
    Apr 23, 2012. 07:05 PM | 7 Likes Like |Link to Comment
  • Why Apple Will Dominate China  [View article]
    A friend in China makes about $1200 a month as a salesperson in a department store. She has an iPad and iPhone 4. She keeps upgrading her iPhone to the latest model even though she never bother to create iTunes account.... If she wants some app she goes to one of her more technologically advanced friends and they do that for her. The phone functionality is not important to her. I noticed that the only app she was using was a messenger, which replaced sms these days. She has it as a status symbol and all her friends have iPhone too. The author's comment on apple products as status symbols than anything else is right on target.
    Apr 22, 2012. 12:07 PM | 4 Likes Like |Link to Comment
  • The Case For Selling Apple Puts  [View article]
    Would you mind sharing some of the stocks in your folio?
    Apr 21, 2012. 12:38 AM | 1 Like Like |Link to Comment
  • Apple: Here It Comes  [View article]
    About a year ago after I bought iPad 2 I stumbled upon a Samsung clone and was turned off by the plastic shell and overall cheap and plasticy feel. When Samsung comes up with clones closer to the real thing, they have a hard time doing it at materially substantial price difference. There will be always a market for Samsung clones just like there is for fake LV bags. That did not stop LV from prospering, and with enough innovation, built in quality and clever marketing, Apple can survive a predicted by the author onslaught of cheap clones for years just like LV does.
    Apr 17, 2012. 03:13 PM | 3 Likes Like |Link to Comment
  • Apple Vs. A Portfolio Of Solid Brand Names: Still No Comparison  [View article]
    I am in the same shoes as you almost literarily (Boston, age, AAPL, retirement, SE Asia experience and interest)... I am currently tossing the thought about moving to Thailand/Cambodia... Don't want to side track this thread, but perhaps we should start a SE Asia retirement thread?
    Apr 2, 2012. 03:16 PM | Likes Like |Link to Comment
  • Time To Make Apple Share The Cost Of Data?  [View article]
    I am just not sure if using the word "subsidy" is most appropriate here , given the fact that carrier, recoups the initial 'subsidy' through the higher monthly fees. If you tried to ditch ATT in the middle of your contract than you know who really "subsidies" the iPhone price. I think the word "pricing model" would be more appropriate.
    Apr 2, 2012. 02:31 PM | 1 Like Like |Link to Comment