Apple Just Opened Up an Enormous Sales Opportunity in China

A blog about business and economics.
Dec. 23 2013 2:08 PM

Apple Just Opened Up an Enormous Sales Opportunity in China

181283901
Now I can use it!

Photo by Lintao Zhang/Getty Images

China Mobile has 760 million customers. That's as if a single mobile phone operator had every single person in the United States of America and every single person in the eurozone as a customer. Including the babies and convicts and 97-year-olds. And until a deal they concluded with Apple today, those customers couldn't really get iPhones. That partnership is obviously a huge deal for Apple, and yet every article I've read on the subject is somewhat perversely Slatepitching it as maybe not such a big deal.

It's time to stand up for common sense and say that, yes, this is a big deal.

It's true—very true—that Apple's phones are too expensive for the average Chinese consumer. And it's also true that in China there are a lot of popular super-cheap (~$100) "dark Android" phones made by Lenovo and weird Chinese companies nobody's ever heard of. But when you're talking about a 760 million customer base, you don't need the average person to buy an iPhone 5C. Sell them to the most prosperous 5 percent of the customer base and you're talking about 38 million phones. The fact that China blocks many of Google's services and that the local face of Android is low-end devices that aren't tied into the Google ecosystem helps Apple, giving it less competition in the market for high-end devices.

Advertisement

Last but by no means least, as you may have heard, China is experiencing rapid economic growth these days. If you ask yourself not so much "where are the people who want to buy a $700 smartphone?" but "where is the number of people who want to buy a $700 smartphone likely to increase over the next five years?" it seems pretty obvious that the answer is China. But to take advantage of that growing market, you need the infrastructure in place. That's why Apple hired a retail chief who has lots of experience opening and operating high-end retail stores in China. The other key part of that infrastructure is a deal with the major local carrier. Now they've got it, and they're set to sell lots of iPhones over the next few years.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

TODAY IN SLATE

The Juice

Ford’s Big Gamble

It’s completely transforming America’s best-selling vehicle.

Should the United States Grant Asylum to Victims of Domestic Violence?

The Apple Watch Will Make Everyone Around You Just a Little Worse Off

This Was the First Object Ever Designed

Don’t Expect Adrian Peterson to Go to Prison

In much of America, beating your kids is perfectly legal. 

Moneybox

How the Apple Watch Will Annoy Us

A glowing screen attached to someone else’s wrist is shinier than all but the blingiest jewels.

Music

A Little Bit Softer Now, a Little Bit Softer Now …

The sad, gradual decline of the fade-out in popular music.

Is Everyone Going to Declare Independence if Scotland Does It? 

I Tried to Write an Honest Profile of One of Bollywood’s Biggest Stars. It Didn’t Go Well.

Trending News Channel
Sept. 12 2014 11:26 AM Identical Twins Aren’t Really Identical
  News & Politics
Politics
Sept. 12 2014 7:24 PM Come and Take It Libertarians fight for people whose property was seized by the police.
  Business
Moneybox
Sept. 12 2014 5:54 PM Olive Garden Has Been Committing a Culinary Crime Against Humanity
  Life
Outward
Sept. 12 2014 3:32 PM Yes, Those Straight Guys Who Wed for Rugby Tickets Are Mocking Marriage. What’s New?
  Double X
The XX Factor
Sept. 12 2014 4:05 PM Life as an NFL Wife: “He's the Star. Keep Him Happy.”
  Slate Plus
Behind the Scenes
Sept. 12 2014 5:55 PM “Do You Know What Porn Is?” Conversations with Dahlia Lithwick’s 11-year-old son.
  Arts
Brow Beat
Sept. 14 2014 7:10 PM Watch Michael Winslow Perform Every Part of “Whole Lotta Love” With Just His Voice
  Technology
Future Tense
Sept. 12 2014 3:53 PM We Need to Pass Legislation on Artificial Intelligence Early and Often
  Health & Science
New Scientist
Sept. 14 2014 8:38 AM Scientific Misconduct Should Be a Crime It’s as bad as fraud or theft, only potentially more dangerous.
  Sports
Sports Nut
Sept. 12 2014 4:36 PM “There’s No Tolerance for That” Pete Carroll and Jim Harbaugh say they don’t abide domestic abuse. So why do the Seahawks and 49ers have a combined six players accused of violence against women?