China in awe of Apple

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The Apple frenzy in China is worth an account. For starters, Apple has now pepped Google and Facebook to become the No. 1international brandin China.The gadgetmakers products are most sought out amongst allsegmentsof society. The end users cherish the supremely well designed and smart devices of Apple. In particular, the iPad and iPhone 4 have becomethe most popular with the Chinese.

To add to that, its four stores in China, two in Beijing and two in Shanghai, have both the largest flow of customers and the highest revenue in the world, outselling even the Fifth Avenue Apple Store in Manhattan, which is open round the clock.

Currently, the average daily customer flow in China’s four stores total around 40,000, four times of that in the rest of the world.

To cope, Apple says it is now planning a third, even larger Shanghai store, as well as dozens of other stores throughout the country. The expansion is driven by customers like Wang Shangyan, a 17-year-old professed Apple maniac.

I have many Apple products, like Touch,iPod,iPad2 and MacBook, Mr. Wang said after browsing the Apple Store here this week. I dont have aniPhonebut Im waiting for the fifth generation. I will come to the Apple Store to buy it; it doesnt matter how much it costs.

Apple will open its fifth retail store in Shanghai this summer, said Ron Johnson, senior vice president of retail operations at Apple Inc.

It is astonishing to note that Apples popularity has gripped China in just about no time at all. And to add more tothe recipethe counterfeitApple Storescame tonews.

Apple now has 323 retail stores worldwide and 87 out of them are outside the United States. The strong demand in the Chinese market also promoted the fastest growth of sales of iPhone in the Asian market, with a more than 100 percent increase year on year.

Johnson said Apple stores’ performance in China far exceeded the company’s expectation. The fifth store in China will be located on Nanjing Road in Shanghai and Johnson declined to disclose the size of the store. But he said it will be a very eye-catching one.

Analysts say few global brands have achieved such a feat in China.

Second-largest market

Apples push into China may be important for other reasons: it shows the depth of this countrys fast-growing upper middle class.

Foreign brands can absorb another lesson as well. Apples success shows that with products that are not so easy to counterfeit, Chinese consumers are willing to pay a premium.

Last week, Apple reported blockbuster sales and profits in its third quarter, including $3.8 billion in revenue in greater China, which includes Taiwan and Hong Kong.

For the first three quarters of Apples fiscal year, revenue in greater China was $8.8 billion six times that of a year earlier. Last quarter, Apple may have even generated more revenue in China than Lenovo the Chinese PC maker, that seven years ago acquired IBMs personal computer business, according to a survey by Bloomberg News.

China has become the second-largest market after the United States for apps that run on the smartphone and tablet, according to Distimo, a Dutch company that tracks the popularity of apps. Strong sales of the iPhone and iPad are also helping drive up sales of Apples other major products, including desktop computers and laptops.

Apple mania has even inspired grass-roots inventors.

It has been eager to team up with state-run telecom companies, which control the all-important mobile phone subscriptions.

Apple currently offers the iPhone in China only through China Unicom, but has also been reportedto be moving toward a deal with China Telecom, perhaps even more quickly than with China Mobile. Regardless, it seems that Apple is certainly making the Chinese market a priority and is working hard to get all of the country’s top carriers on board for the iPhone as quickly as possible.

According to Morgan Stanley’s Katy Huberty, Asia Pacific is the company’s largest earnings driver, representing 39% of the company’s operating income growth last quarter.

Although China is the world’s biggest market for mobile phones, not all of China’s 1.3 billion citizens can afford an iPhone. But Hubertyestimatesthat there is a core addressable market of 50 million middle-class Chinese with plenty of disposable income and a “strong interest in smartphones and the Apple brand.”

This is the market Apple was targeting when it announced that it planned to build 25 Apple Stores in China within the next two years. Four of those stores have already opened and they draw, according to Apple, more traffic and generate more revenue than any other Apple Stores in the world.

Stock-outs

When the iPad2 debuted in China in May this year, it underestimated shipping estimates greatly.

Sales began at 8 am, and the first retail stock-out was reported about four hours later, and by the next day, the estimates at Apple’s Chinese Online Store had gone from ‘1-2 weeks’ to ‘No supply.’

If Apples appeal to offer its popular gadget through state-owned China Mobile Ltd. is approved, the company would benefit from hundreds of millions of new customers. The attempt is Apples latest move in the uncertain Chinese market, which could definitely play a major role in the companys growth plans.

Apple plans to open doors on 40-50 stores worldwide in 2011, over half of them will be outside the U.S.

Looks like we should update ourbucket listof Apple stores to visit.

Sources: techreaders, peopledaily, nytimes, macrumors, cnn, cnet, blog.merimobiles, cultofmac

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