Why Apple and China are Simply Incompatible

Feb 20, 2009
By Mike Elgan
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The Beijing Olympics begin in two weeks. But for Apple, the China games have already begun. The company opened a shiny new Apple store in Beijing Saturday -- the "first of many" in China, according to an Apple official. The race is on.

But is this an event Apple can win?

China is a coveted market. But so far, things aren't going well. Apple has less than 8 percent market share in China for media players, and far less than 1 percent of either PC or cell phone market share.

Although Apple has successfully launched the iPhone in more than 70 countries, China isn't one of them. The company has not yet been able to reach a deal with any Chinese carrier.

Apple's second biggest hit in China, the iPhone, isn't authorized. One Chinese analyst estimates that some 1 million Apple iPhones are currently operating on just one Chinese carrier -- China Mobile -- with a smaller number on other carriers. Most Apple "Authorized Resellers" in China sell black-market iPhones, and many even offer illegal cracking services -- a process that reportedly takes less time than activating an iPhone 3G in California.