Shaun ReinForbes has a pretty no-nonsense article about the iPhone’s fortunes in China written by Shaun Rein of the China Market Research Group

Background: Apple had only sold 5,000 legitimate iPhones in China after a week of being on sale and one of China’s biggest online retailers had only sold five in two weeks.   That of course is swayed by the fact that millions of cheaper, unlocked phones from Hong Kong and elsewhere have been selling without a contract in the mainland for years.   Oh, and the gray market iPhones have Wifi – which Apple was forced to remove for the legit China launch.

Rein offers additional factors which have slowed Apple’s official launch:

1. Local Consumer preferences weren’t being taken into consideration.  Most Chinese are Pay-as-You-Go customers.  It takes Hours/Days to fill out the paperwork to go pre-paid vs. 30 seconds for an unlocked SIM. Also, typical Chinese consumers spend less than $12 a month, choosing texting over voice calls.  Early adopters change phones often and don’t want to be tied into a contract.

2. Apple chose the weaker partner.  China Unicom only has 30% of the market and less coverage and quality than China Mobile (70% of the market).  There is also no number portability so China Mobile customers didn’t want to lose their number.

3.China’s launch was over two years after the US’s.  Getting technology last is buzzkill.  It is hard to build excitement for a launch over two years after the original.

Our conclusion?  Apple should learn from the black market.  Sell them direct to consumers and unlocked.  They’ve already sold millions this way indirectly, it seems to be working. 

Heck, why not try that in the US?

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