“The eggs started smashing against the Apple Store windows just before dawn. Most of the hundreds of people who swarmed the swank plaza adjacent to the glowing, glass-cube outlet had huddled all night long in Beijing’s frigid January temperatures. But these weren’t early adopters desperate for the newly released iPhone 4S. Nor were they citizens outraged at the labor conditions inside the Chinese factories that churn out Apple gadgets,” Hannah Beech reports for TIME Magazine. “Instead, most were rural migrants who had been paid about $15 each to purchase iPhones and then hand them over to scalpers who would sell them at inflated prices.”
“The Chinese scalper may have lost out, but Apple hasn’t. In its latest quarterly earnings statement, released in April, the company reported a staggering $39.2 billion in revenue. It was a new record, and the surge was based in large part on a fivefold increase in iPhone sales in China, Taiwan and Hong Kong over the past year. (By contrast, iPhone sales dipped in the U.S. from January to March [post-holiday quarter] compared with the previous quarter.) Revenue for Greater China, as this market is called, tripled over the same period to $7.9 billion—about 20% of global sales, compared with just 2% in 2009,” Beech reports. “A market that three years ago was an afterthought for Apple could soon overtake the U.S. market, the company’s longtime consumer base. Credit Suisse estimates that China alone could generate almost $30 billion in sales for Apple by 2015. ‘Apple fans in China have an almost religious passion,’ says Sun Chonghui, an analyst with Shanghai-based iResearch Consulting Group. ‘It’s hard to analyze this phenomenon rationally.’ Sure enough, in April, Chinese state media reported breathlessly about a teenager from eastern China who sold his kidney for about $3,500 to buy an iPad and an iPhone.”
Beech reports, “The American company is thriving in China, even as other Western tech firms struggle with local competition and communications restrictions imposed by the authoritarian state. Apple products now serve as the ultimate totem of upward mobility in a country with a fast-growing middle class. ‘There’s tremendous opportunity for companies that understand China, and we are doing everything we can to understand it,’ said Timothy Cook, Apple’s chief executive, during an April earnings conference call. ‘It was an incredible quarter [for Apple] in China. It is mind-boggling that we could do this well.'”
Tons more in the full article here.