The Challenges Facing Apple in China

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Dec. 5 (Bloomberg) –- Shaun Rein, managing director at China Market Research Group, discusses the potential deal between Apple and China Mobile. He speaks with Jon Erlichman on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

What's the buzz?

The buzz has been good for apple.

They've been facing challenges.

They saw 300% growth and they're now in single digits.

People are really excited.

If apple can sign the deal, they'll have access to millions.

Only 25% of the customers are using 3g. most are price sensitive using the 2g network.

It will be difficult to convince them to buy apple iphones through a contract.

Let's stay on that point.

Has the trend suggested we'rse seeing consumers move from 3g to higher end phones?

The 2g side, consumers prefer pop up cards and pay as you go.

They don't like to sign for contracts.

The second problem is like in shanghai telecoms, you can't ge tat a contract if you're from another city without paying a huge deposit.

Some other operators have been rolling out data service plans.

Those that decide to sign up are going to them to get the high end smart phones.

Being big can sometimes be bad if you draw attention to the fact you have so many subscribers.

Chinamobil's market share dropped the last three years.

The competition is fierce.

After the third plenum where the government met, they'll try to stop the dominance.

You may see a potential break up or policies geraedared to move up.

That's why it hasn't done well the last several years.

What can you tell us about demand for home-grown names?

The rise of products like lenovo?

That's a great question.

Apple wa thes the cool product, it was also a major gifting purchase.

Like rolex.

But what we've seen is the high end samsung galaxy line and domestic manufactureres.

They're gaining market share.

Lenovo opened up a test center where people can play with products,. they're cheaper and almost as good in many cases.

I was interviewing banks, and they're buying lenovo phoens tones to give to employees.

As the industry becomes more commoditized.

Always appreciate it.

This text has been automatically generated. It may not be 100% accurate.

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