Marketing research: IPhones or other smartphones?

01Nov2012

Apple, we’re way ahead of you

Although Apple just recently launched the iPhone 4S, several Chinese online stores are offering die-hard Apple fans the opportunity to buy the much-anticipated next-generation “iPhone 5.” The knock-off smartphones are available for as little as RMB200 (US$40) on popular websites, such as China’s largest online marketplace, Taobao.com, which has 370 million registered users.

Customers who left comments on the site appear to have brushed aside the fact that the product is not the real deal. “It’s really great, I’ve already used it for a few days and it’s good value for money,” wrote one customer. One of the smartphones is called the “HiPhone 5” in a bid to avoid accusations of counterfeiting, but photos of the device clearly show the Apple logo on the back of its casing.

The iPhone is not as popular among Chinese consumers

When the iPhone was released in the United States two years ago, thousands camped outside Apple stores overnight to secure one of the prized devices. The official launch of the trendy handset in China this month is not likely to spur the same excitement. Over the last two years, while Apple Inc. was tied up in negotiations with a Chinese carrier to bring the iPhone to the country. However, nimble entrepreneurs were already busy importing Apple handsets manufactured for the US and Hong Kong markets. They downloaded software to make the phones compatible with local networks, switched the language settings and the Chinese iPhone was born. Travelers coming back from their trips abroad also smuggled the coveted devices into the country. Then there are the ‘iPhoneys’. Shoppers can walk into any electronics bazaar in Beijing and buy a counterfeit iPhone for as little as US$50. These pirated devices are of course not as good as the real thing. It takes thumb-wrestling strength to get some of the touch screens to respond and the e-mail icon is just for show. But for shoppers like Luo Qiang, a 32-year-old worker at the state electric company, just the appearance of a genuine-looking iPhone is enough. “If I can have one that does more or less the same thing, why buy the more expensive, official iPhone?” Even Chinese consumers who can afford name brands are growing more fickle and hard to impress. Xiao Zhuang, a 14-year-old who attends a prestigious middle school in Beijing, wowed her classmates months ago with a gray-market iPhone. Now, she said, the gadget was positively passé. “I don’t feel like the iPhone fits me,” she said. “I think I’m going to buy the Nokia N97 next.”

iPhone look-alikes taking centre stage

Apply fanatics are no longer the only ones lining up to get the latest product in China, as domestic brands are inspiring their own outbreaks of consumer frenzy. In recent weeks, queues could be seen around the country for the Meizu MX, an iPhone look-alike with a much more affordable price tag.

University student Kenny Tang, who bought the phone just before the Lunar New Year, said: “It looks like the iPhone, but the software is completely different, not to mention better.” While manufacturers like Meizu used to be called “shanzhai” firms- a Chinese term for manufacturers known for “knock-offs” – they are now moving up the value chain to market their own brands.

Daxue Consulting Marketing Research in China

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Picture Source: Apple China