John Paczkowski

Recent Posts by John Paczkowski

Uh, Steve, the Chinese Are Okay With “Magical,” But “Revolutionary” Is a Problem

Apple’s market share in China is modest–less than one percent, by some accounts. But that’s about to change–and quickly.

The company’s occupation of China begins in earnest this weekend with the opening of a flagship Apple Store in Shanghai. It is the second to open in the country since 2008, but the first of 25 the company plans over the next two years as it seeks to exploit untapped demand for its products there.

As Apple COO Tim Cook noted during an earnings call earlier this year, the company sees enormous potential in China. “If you look at greater China, which we define as mainland China, Hong Kong and Taiwan, the iPhone units were up year-over-year over nine times,” he said. “We added another 800 points of distribution in China. The revenue, we have never released this number before but I will do this in this particular case, through the first half of the fiscal year that we just completed, for the six month period, our revenue from greater China was almost $1.3 billion and this is up over 200 percent year-over-year. So we are well pleased with how the company is positioned to take advantage of the growth in greater China.”

Indeed, if Apple (AAPL) does meet its goal of 25 stores in China by 2012, the country would be among the company’s top three markets (the others being the U.S. and U.K.). That is potentially bad news for Chinese electronics makers like Lenovo, which have by their own admission benefited from Apple’s previously lackadaisical approach to the country.

“We are lucky that Steve Jobs has such a bad temper and doesn’t care about China,” Lenovo Chairman Liu Chuanzhi told The Financial Times earlier this week. “If Apple were to spend the same effort on the Chinese consumer as we do, we would be in trouble.”

Looks like trouble’s on the way.

[Image Credit: M.I.C. Gadget / Flickr]


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