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.
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.