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WSJ Buries the Real iPhone in China Story



August 27, 2009 – Comments (2) | RELATED TICKERS: AAPL , CHL

Happy day for Apple (AAPL) in today's WSJ with this headline: Apple, Facing Competition, Readies iPhone for Launch in Giant China Market.

Then we get optimistic predictions like this one:

Toni Sacconaghi, an analyst with Sanford C. Bernstein & Co., calculates Apple can sell 2.9 million iPhones in China by the end of 2011. "Ultimately, it will probably be the fastest-growing overseas market," he said.

And then, way down near the bottom, spun as a positive, we get this little nugget:

One indication of the iPhone's strong potential in China is the thriving underground iPhone market that already exists there. Though the device isn't officially available, BDA estimates there are already 1.5 million iPhones in use in China, and the handset is on sale everywhere from online vendors to resellers of Apple products in sprawling electronics malls.

That's right, the iPhone is already in China, and 1.5 million (likely more) Chinese already own one and run it on the superior China Mobile (CHL) network. Further, these aren't the wealthiest or hippest 1.5 million Chinese (which is why I think that 1.5 million is sandbagging. Almost every cab driver we rode with in China last month already had an iPhone. All of the business executives we met with already had one. Thus, I think expected growth here is going to be very disappointing.

The takeaway: Don't buy Apple on this overblown iPhone finally in China -- the world's fastest growing cellphone market -- news.

2 Comments – Post Your Own

#1) On August 27, 2009 at 3:40 PM, chk999 (99.96) wrote:

This is why having eyes on the ground in an area is necessary. You wouldn't read things like this in a business magazine until it was so old that iPhone had gone out of fasion.

You rule!

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#2) On September 29, 2009 at 6:37 AM, SebastianZ (< 20) wrote:

AT&T and Apple are rolling out the long awaited iPhone MMS service on Friday, September 25th, as a free service.  The hitch is that it's only available for owners of the iPhone 3G – 1G and 2G users will be out of luck.  It has been lamented for a long time that the iPhone doesn't have a multimedia messaging service, but it does now.  The only unfortunate drawback is this is going to make iPhone owners even more sanctimonious – and they get annoying.  SO no need for iPhone owners to wait for their tax resolution checks from the government – they now get free multimedia messages with the iPhone MMS.

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