TIME Magazine cover story: ‘The Cult of Apple in China’

“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.

MacDailyNews Note: This story is running in both the U.S. edition and international edition of TIME. It is the cover story of the international edition:
TIME Magazine cover: The Cult of Apple in China

30 Comments

  1. Time is clueless if they think everything about Apple’s products is made in China which is primarily just an assembler. They forget about the over half a million jobs Apple creates here. This cover seems calculated to inflame people who single out and think Apple should do everything here. Lookaround people at all the products China creates on Wal-Mart and elsewhere shelves. Apple is a drop in the bucket compared to that.

    1. Gees Peter, did you read the Times article or just jumping to conclusions from the cover photo? China is very important to Apple, many more customers there than in US. And Apple is responsible for many jobs in China. As an AAPL investor I am very happy with Apple’s success in China. I wish Apple could do everything here, who does’t? But reality is Apple must compete. Those who bash Apple for its China operations were never going to buy Apple products. Chill Peter, this is a good thing.

        1. Exactly, my friend. They sell more magazines, and they have plausible deniability when criticized by pointing to the content. The number one trick of all headline writers, marketing units, bloggers, and second-grade bullies: “WHO, ME?” The sad thing is that people keep falling for it, over and over again.

  2. Apple’s future does not depend on china, Apple became the greatest brand in the world before starting production or selling in china.
    Right now, with all the assets apple has, they can stay on top without selling a single device in china for a long time.
    I’m not an american, but I will be very very very proud to being born in the country that created the greatest company in the world; however, looks like time magazine is not.

    1. “I’m not an american, but I will be very very very proud to being born in the country that created the greatest company in the world; however, looks like time magazine is not.”

      a refreshing and astute observation, Troy.

  3. Go USA Apple 🙂
    Dollars coming back to America!!!
    Watch by 2015 China alone will contribute $30B
    for AAPL revenue 🙂

    Buy BUY AAPL 2day!!!!!!
    2015 AAPL = $1055 USA dollares 🙂

    1. No, thanks to the ridiculous tax rate levied in this country on it’s own corporations Apple will wisely keep most of that money offshore.

      The US used to be where companies came looking for opportunity….sadly that country no longer exists.

      1. Sadly, US companies don’t want to pay a tax rate commensurate with the standard of living of the country. C’mon American people, the tax rates are needed to keep you guys living in the comfort and coziness you guys are used to. Duhhh!!(*(Q*@^(&QT$ – so, when the attitude of (1) we live in style and (2) ship our profits overseas, the end result is (3) the present US economy 🙂

    2. Exactly how are these dollars coming back to the US? Is the Gov’t going to allow a tax holiday for AAPL? These Devices are made in China and sold in China and the profits are stuck in China.

  4. I live near housing assigned to Chinese students at a local college. In the debris they left behind on moving out after graduation were several Apple computer boxes. These students are mostly from second or lower tier cities in China, so they don’t have access to Apple stores when they get home is my guess.

    Although, I saw them in the library as they suffered with Windows during their time in school here. I’ve seen posts on the college’s website how these Chinese think Bill Gates is the greatest business man ever.

    Bass ackwards if you ask me.

  5. China is a difficult nation to fathom. Population-wise, it’s so huge that it boggles the mind. Essentially, it’s like *two* United States and *all* of Europe put together and the middle class is rising fast. And, for most, a genuine Apple device is the ultimate status symbol. Many people underestimate just how big of a potential China is for Apple.

    Apple is only scratching the surface right now in China. Yes, surface… Funny that word should come up because, yeah, that’s all that the M$ Surface is – surface… I’ve been going to China since the early-90’s several times a year and will be back there next month. It is, without doubt, the most dynamic and fastest growing economic nation in the world.

    Apple has a tremendous opportunity there because the people there really love the Apple brand. Even from a fanboy’s perspective here in the US it’s somewhat over-the-top and irrational, but it is what it is and Apple may as well take full advantage of it. China will keep the growth going strong for at least another 5 years and probably a lot longer. Then it will be India, Brazil and the rest of the developing nations. There’s still a long, long way to go…

    1. Do you think the Chinese affinity for Apple originates in the the company’s dedication to accessibility—particularly in its attention to accurate depiction of Chinese ideograms? I think of that because of similar fervor in Japan and Korea. Or is it something deeper? It can’t possibly be just a passing fad, or a marker of social status.

      1. No, I don’t think it’s something like that at all. I think the main thing is that it’s a genuine *WESTERN* brand because they don’t trust most of the Chinese brands and they also have a subliminal dislike for Korean and Japanese brands as well. I actually think a lot about this whenever I go there and, as a Korean-American who was born and grew up there, I do understand the Asian psychology pretty well.

        It’s an extremely competitive and dense social scape over there and there really is this desire and need for the people to show off their status and keep climbing that social ladder. I observed that for many years in Korea and am seeing it in China now. They are so brand-conscious. I wouldn’t call it a passing fad. There is no other brand that’s even close. Samsung? Not a chance. Sony? Ancient news…

        Apple just needs to manage the marketing properly to keep the buzz going and make sure they tailor the iDevices and the ecosystem to suit the local requirements and keep the quality level up. It’s almost an unfair advantage for Apple and it has to be deeply frustrating to the competition. You see the frustration in Samsung’s commercials. They don’t know how to compete with Apple’s marketing prowess and brand awareness.

          1. Hey, my pleasure. As much as possible (although I sometimes have a hard time resisting making fun of the competition and the trolls), I’d like to contribute something from direct experience and what I feel would be more meaningful to the readers.

    2. The first quarter of the calendar year is the “holiday” quarter in China. It is when the Lunar New Year is, which is a big gift giving time in Chinese and other Asian cultures.

      This is apparently missed by the authors of this article, and most other Westerners, for that matter.

      1. Yep, it’s much bigger than Christmas over there. It’s a major holiday in Korea as well. China literally shuts down for almost two weeks as far as factory production is concerned. That does raise the question: how does Apple and Foxconn deal with it? It’s hard to imagine them just stopping production of hundreds of thousands of iDevices per day for over a week. The factories I deal with tell me to just not come during that time of the year.

  6. Our entire country is essentially dependent on China because we owe them trillions $$$… If that’s not a problem, why would it be a problem if (only if) Apple depends on China making its product? — Apple has no debts, has lots of cash and made huge profit for its shareholders, why change any thing?

  7. We live in a global economy. Every county is having similar aguments about tax avoidance by large corporations and job creation because growth has slowed globally (eg. China is still growing but at a lower rate). It would be impossible for Apple to manufacture their products in the US and compete against those companies who continue to manufacture in China. Americans consume more than any other country (it is said that 1 American consumes as much as 13 Chinese people); it simply isn’t possible for everything Americans consume to be produced by the American consumers themselves. So while the inevitable debate continues in the US and around the world, I think Americans should be proud of Apple. Would these journalists prefer you lined the pockets of companies like Korean Samsung instead?

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