iPhones Produced in China Smuggled Right Back in 159
Ponca City, We Love You writes "Factories in China produce iPhones that are exported to the United States and Europe and then smuggled right back in helping explain why Apple says it sold about 3.7 million iPhones last year while only 2.3 million are actually registered in the United States and Europe. For Apple, the booming overseas market for iPhones is a sign of its marketing prowess but also a blow to Apple's business model, costing the company as much as $1 billion over the next three years, according to some analysts. Since negotiations between Apple and China Mobile, the world's biggest mobile-phone service operator with more than 350 million subscribers, broke down last month, the official release of the iPhone in China has been stalled producing a thriving gray market. Copycat models are another possible threat to Apple in China. Not long after the iPhone was released, research and development teams in China were taking it apart, trying to copy or steal the design and software for use in iPhone knockoffs, or iClones and some people who have used the clones say they are sophisticated and have many functions that mimic the iPhone. "A lot of people here want to get an iPhone," says Shanghai lawyer Conlyn Chan."
You just can't repress anything these days (Score:5, Insightful)
Re:Remember (Score:5, Insightful)
funny math (Score:5, Insightful)
Basically this "funny math" is saying: "We get $X from phone sale, plus $Y from the carrier deal. We expect to sell 1M phones, which means (X+Y)*1M $. We noticed that we actually sold 2M phones! Yay! But then we noticed that only half of those phones actually signed up for plans."
So they now claim that they have lost Y*1M $ because people didn't sign up.... umm... no. You made an additional X*1M $. That is not a loss. That is a profit.
"Costing" indeed.
Re:Don't build in China (Score:4, Insightful)
Re:Remember (Score:5, Insightful)
Sure, and with China's well documented tendencies towards theft of intellectual property, no one should be surprised.
What we should be doing here in the US, though, is everything we can to discourage use of Chinese products. There's no need to give China all our wealth and in the process create a powerful competitor. Problem is, we're already there...now it's time for damage control. The one good thing about a weak dollar policy is it will help.
Good thing we have a big crop of American scientists and engineers to compete into the future! Oh, wait...
Re:funny math (Score:4, Insightful)
Re:Remember (Score:5, Insightful)
Going with the Slashdot meme here, it's not theft because they haven't taken it away from you - you *still* have your IP.
But then I guess that it's only when $BIGFACELESSCORPORATION is complaining about you downloading their products in violation of US copyright law that such semantics come into play.
When another country is getting competitive against the US they *must* be *stealing* your ideas!
failed projections and "costs" (Score:4, Insightful)
Gah, I hate that terminology. Making a business model around a certain fee structure, and then failing to get people to play along with your business model, is not a cost. It's just like those piracy reports where they say they LOST a billion dollars because people who were never going to buy the product ended up not buying the product. Apple may fail to meet projections. Apple may wish more people would fork money over to their exclusive business partners. Apple may have had their heart set on a shiney new building or parking lot or bonus for Steve, but not being able to meet those expectations isn't a loss or a cost. It's a failure.
Actually, they started pretty much open... (Score:2, Insightful)
It's post-Mac that Apple culture became locked-down.
Re:Don't build in China (Score:5, Insightful)
Re:You just can't repress anything these days (Score:3, Insightful)
Remember MusicMatch Jukebox? (The music player supplied with the first Wintel version of the iPod) The same deal - a tactical alliance, dumped the moment that they could stand on their own two feet. Portalplayer anyone? Logitech?
The presence of a grey market for iPhones proves that there's a pent-up demand ready for the day Apple have the strength to roll this thing out under their own banner. Apple
They're making plenty enough money to justify the investment and keep the alliance with AT&T alive for now. All this does is make Apple stronger.
Product "makeup": (Score:3, Insightful)
That is what Apple is doing with the iPhone: dummies buy the iPhone, activate it with AT&T and spend $800 in a product that Apple advertises as costing $400.
Unrealized gain != Loss (Score:3, Insightful)
Apple (might) have $1b unrealized gains.
Apple didn't have $1b in losses.
(If I buy a lotto ticket for a $1M pot, I don't suddenly have $1M in losses when I don't win, I have $1M in unrealized gains.)
Re:Remember (Score:4, Insightful)
1) People like to buy cheap goods
There, fixed that for you.
Capitalism/The Market is to blame. People want to buy commodity goods (virtually everything these days) as cheaply as possible.
Re:half the iPhone profit is ATT kickback (Score:2, Insightful)
Re:funny math (Score:3, Insightful)
Re:Remember (Score:4, Insightful)
China's trade practices are unfair and their government encourages deceit. It is IP theft.
And I don't even work for a US based company... so it's not US vs China.. it's China vs the Industrialized world.
you are joking right? (Score:4, Insightful)
Your whole post is simple minded but this takes the cake. You think a country with a population of over 1 billion people that is joining the ranks of developed nations can be forced by an embargo to change their ways? You do realize just how many American dollars they own right?
In your ideal view of the world the only things we get from China is the cheap crap we don't need, and if we could just stop being addicted to cheap crap things would go right back to being pleasantville. Keep thinking that while sitting on a chair made out of chinese parts, wearing clothes made by chinese companies, typing on a computer manufactured in china. Do you really want the job of making these things? Wouldn't you much rather get an education and sit around and post on slashdot all day?
It looks like there will be more and more China bashing coming up, and it makes sense. It is easier to see the world as black and white, us vs. them. It is easy to disregard how complex a 1 billion person social system must be that has underwent revolution after revolution in the last hundred years. It is easy to proclaim that American's are the only ones that can properly carry out capitalism, when the Chinese have only been at it for 20 years.
and trust me, I don't like Clinton or her ol' boys network, but you don't know anything about business if you think cutting off one of the largest growing markets is a good idea.
*rolling eyes* (Score:1, Insightful)
Re:Remember (Score:3, Insightful)
It was fairly hilarious as this was the new york store, and the particular clerk that was helping them was a first
rate asshole that was seconds away from saying "no phone for you!" to them. They finally ended up buying 5 each
after a long dressing down by the clerk.
I tried to activate the phone with my dubious credit and AT&T wanted a $500 deposit plus $136 just to get in the door.
Instead of choosing the deposit or "pay-through-the-neck-as-you-go" plan, I laughed at them and said I was unlocking it.
1 Hour later, I was unlocked, jailbroken, and all hooked up with T-Mobile, who gave me some very generous loyalty incentives to stay with them.
My wife is very happy with the phone, and I am contract free still muahahahahaha......
I'm not mad at AT&T but they really suck. Why require a deposit for something you can just turn off if a bill is not paid?
Re:Closed source = Not interested (Score:3, Insightful)
As for your assertion that the software isn't as good as Ubuntu, I'll say when Ubuntu works out of the box with my hardware I'll agree with you. Until then, I'll keep considering OS X a better solution. No it's not a fair comparison, since Ubuntu can't control all the hardware, but fact is OS X simply works and is generally more simple and intuitive.
Does that mean the iPhone is a good solution? I don't happen to think so, but I have no reason to think an open source solution will be any better. Despite your beliefs there are definitely reasons for closing your source just as there are reasons to open it.
Re:Don't build in China (Score:5, Insightful)
Mainly because not much in those regions is cheap, and trademark & copyright laws are enforced against commercial entities that would try to make those knockoffs. China, Taiwan and such may have laws but the enforcement is quite lax.
Re:failed projections and "costs" (Score:2, Insightful)
I live in an underdeveloped country. Minimum wage here is $200/month. What I can say to you is, about the people that buy "pirated" stuff here:
1. People that buy a PS2 here (yes, not a PS3) wouldn't buy the console if they had not access to pirate games. They could not affort the price console+games.
corollaries to 1: they wouldn't buy the non-pirated games, nor they would buy the console.
2. People I know that buy pirated movies, in general, pay the $2.50 for the pirate version because: (a) they can't pay the $20 for the original version and (b) they can't pay the $10/person it costs to go to a theatre and (c) then don't think it's worth to pay the $1 it costs to rent the movie if for $2.50 they can have it to watch whenever they want.
corollaries to 2: they wouldn't buy the movie; they _might_ rent 2.5 times less movies, for a total loss of sales of ( 1 / 2.5 ) / 500 =
3. People I know that use pirated computer programs could not afford them at all, at best they would use OSS/FS or bundled-with-the-computer software.
4. People I know that buy "rip-off/fake" branded merchandise (adidas, DG, Nike, etc) cannot afford the "real thing".
Every person I know that can afford buying CDs, DVDs, console games, etc BUYS them (including myself -- owner of a PSP and 4 games) (and there is a less-than-pure-honesty social explanation, too... it's a status symbol here to have the "originals" and not the "fakes")....
MOD PARENT UP (Score:3, Insightful)
Opportunity cost, in short, is the cost of NOT doing business. This means that Apple could be making $X IF every iPhone is registered by AT&T or any other cooperating carrier outside the US. This is not just fake number. This number is important for many reasons. Mainly, if we do X instead of Y, what revenue would Y have brought in, and is that more or less than if we do X. Or in more real world terms, should we use our extra profit on employee bonuses, or should we expand the company? If we were to expand the company, what is our potential revenue? If we instead go the bonuses route, then the potential revenue from expansion, is the opportunity cost. This helps you decide which route to take.
It is also important in industrial insurance policies. If a hurricane hits a factory in Puerto Rico, there is the physical loss (property damage, lost inventory, rebuilding) and then there is the opportunity cost of not being able to produce more of the product while rebuilding taking place. Instead of making X widgets, we can only make X-Y widgets, which means less revenue. This is factored into the insurance payout in the event of a such an occurance.
Similarly, Apple has produced 1.4 million iPhones that will not be registered(thus preventing the registration revenue). It was Apples intent to have these phones registered, yet smugglers and un-lockers have stopped this from happening. The expected revenue may even have already been earmarked for something else (i.e. paying off a loan, extra R&D money, etc.) This is a loss and this loss is costing Apple money
Re:Remember (Score:3, Insightful)
You seem to be arguing that intellectual property 'isn't, as in 'isn't property'. That would so cleverly explain why this thing, which 'isn't property', is so coveted as to be copied and produced.
Non sequitor.
Many thinks which aren't property are coveted; thy neighbours wife and thy neighbours ass, among others.
I'm not a great believer in property even in physical things, but so-called 'intellectual property' isn't even property in legal theory. It's a disparate set of short term grants of monopoly given by the power of big government, and given because they have in the past been believed to have overall economic benefit for the community. Whether they do or not, the people who defend 'intellectual property' are usually the same people as the people who decry big government, and government intervention in markets, and that sort of thing.
Shocking lack of intellectual rigour.