[MW Forums]

Apple's high price has contributed to the company's continued perception as a boutique computer brand in the burgeoning Chinese consumer computer market, opines Steven Schwankert. more

[leicaman]

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Apple's high price has contributed to the company's continued perception as a boutique computer brand in the burgeoning Chinese consumer computer market, opines Steven Schwankert. <a href="/news/2006/09/27/applechina/index.php">[more]</a>

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Similar problem in Brazil. One friend says he wants a Mac, but they cost 2-3X more than competing PCs. His girlfriend, who does marketing and advertising in Rio, told me she buys Macs when she's visiting in New York, and brings them home. She has to pay duty, but it's less expensive than buying at home. And there are very few dealers who carry Macs anywhere in the country.

[palane]

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Apple's high price has contributed to the company's continued perception as a boutique computer brand in the burgeoning Chinese consumer computer market, opines Steven Schwankert. <a href="/news/2006/09/27/applechina/index.php">[more]</a>

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Ditto for Costa Rica. They're available, but pricey. Word of warning for those taking a computer across borders. We picked up a MacBook for my mother-in-law (with a rebate) and took it down on vacation. Naturally, it was the first Mac I've had that died (not bad considering I started with an SE). So, back it came on her fall trip and we're awaiting the arrival of its replacement.
PaL

[uchuugaka]

maybe two of the largest piracy markets (through little fault of their own) are of little interest to companies who develop software. not to mention companies who develop software to sell their hardware...
Apple is not losing anything in Brazil or China or India. Clearly, others are scraping thin margins there anyway, and software makers are not making anything. The same is true in tons of countries. Their economies don't facilitate legally acquiring technology, so people steal it. You can't blame them. You can't blame apple. If profit margins are so low in those countries, and they are, then the only people losing are the major brands trying to do business there. While lowere prices are indeed generally good for consumers, lower costs cannot be achieved. Those are countries where things are being manufactured.
Eventually globalization will price itself out of the market.

[jmincey]

"Service, quality, ...satisfaction these are extremely secondary concerns to the Chinese consumer."
I come close to finding this offensive. In any case, it's certainly outrageous. There is simply no legitimate ground for making such a sweeping statement.
As of late 2004, the average annual wage of Bejing residents was 15,600 yuan (US $1,900). When you add residents of rural areas and include the uneducated, the income average plunges.
Expecting US corporations to accommodate these markets is unreasonable -- so who is purchasing computers in China? Obviously only the very rich, (by Chinese standards). And you can bet that the rich care about quality and service and satisfaction as people of other countries do.
Then of course there is the question of intellectual property rights. The laws -- while improved -- are still insufficient and in any event they are not well enforced. So given the foregoing, HP and others can brave this market if they wish, but I think Apple is right to wait until China gets its act together.

[irolley]

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Similar problem in Brazil. One friend says he wants a Mac, but they cost 2-3X more than competing PCs. His girlfriend, who does marketing and advertising in Rio, told me she buys Macs when she's visiting in New York, and brings them home. She has to pay duty, but it's less expensive than buying at home. And there are very few dealers who carry Macs anywhere in the country.

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Actually Macs in Brazil are so much more expansive than in North America and Europe.
Take the Macbook:
in Brazil
4999 reals (= 1800 euros)
in Europe
1099 euro (= 3050 reals)
So Apple is charging 700 euros MORE in a poorer country. I was amazed when I went to Brazil and saw the price of even the cheapest Mac. I did not meet anyone there who owned or planned to own a Mac. It's up there with the Ferraris!

[Nobody]

Depends on your outlook... market penetration and continued existence can be very important for future because eventually developing countries will become more affluent. Already, the largest sales of cars was not in USA, as it has tended to be but in India.
Furthermore, even in the short-term, to sell something at lower profit margin to a billion potential customers is not entirely without its merits. /forums/ubbthreads/images/graemlins/wink.gif

[jmincey]

"So Apple is charging 700 euros MORE in a poorer country."
I suspect this is about economies of scale and the costs Apple incurs in certain countries. It's one thing to be price-competitive in first-world countires while having only single-digit market share, but to do so in the developing world (to say nothing of the third world) is problematic and depends heavily on the specific characteristics of each individual market (and also of government policies).
HP, Dell, et. al., can more readily weather this storm because their share is well into double-digits. But cost and regulatory hurdles hit a company like Apple with greater force.
I have no inside information on this, but it only stands to reason -- unless you want to posit that Apple is just gouging Chinese and Brazilian customers for the hell of it. Surely that's not plausible to you.

[Nobody]

Are you sure that it is the Apple who is overcharging and not your government that is imposing more taxes or the the local merchants adding a hefty profit?

[keloide]

This is why Apple doesnt bite in the world other than US, Japan and mainstream Euro!

[kwill]

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...but to do so in the developing world (to say nothing of the third world)...

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With the absence of the Soviet Bloc, to what are you referring as the "third world"? You were on target with "developing world" but "third world" is no longer politically correct terminology.
http://en.wikipedia....iki/Third_World

[celiawessen]

Come on! I This is like saying "Japanese chopstick makers are not buying into the US market". How are they going to make money?
Computers are becoming popular in developing and industrial countries, but there is FAR LESS DEMAND to own one and have one at home in China than the US. But people who DO purchase them DO ask for high quality and service - that' s why they bought the NAME BRAND.
Did you know that even the Chinese won't buy Louis Vuitton purses made in China?
It is totally plausible that service, quality, prestige, satisfaction is unimportant to those people that do not see the value of the Name Brand. BUT are they extremely secondary concerns? This is a country you could get killed over a bad coconut tart.
Like many developing countries prestige is very important in China. Wearing a nice school uniform is akin to being in Marine Corps dress and medals.
Satisfaction is extremely important in China. The consumers are hungry, and will continue consuming. Their wants may be bigger than those of the US consumers - they're just not pin-point merchandized as Americans yet.
Service is another thing China needs to dig up from centuries old teachings. Communism and Capitalism has obscured the obvious for them.
Quality? Egh... I guess China has its own explaining to do about quality. So I'll give you this one.

[jmincey]

"You were on target with "developing world" but "third world" is no longer politically correct terminology."
I'm afraid I don't agree with the individual who authored a definition of "third world" in the Wikipedia definition, to wit: "Third World countries are not as industrialized or technologically advanced as OECD countries, and therefore in academia, the more politically correct term to use is 'developing nation'."
This is erroneous. "Third world" is not a pejorative (or politically insensitive synonym) for developing nation. Instead, the term, third world, has come to designate those countries which have virtually no industry and whose population live in poverty. The third world refers also to countries with large and insular indigenous peoples whose way of life has been essentially unchanged for centuries or millennia.
Now of course there are pockets of poverty and indigenous peoples everywhere, but I'm speaking of proportions and thresholds here.
Granted this is not a technical definition, but in practical use it is valid -- unless you would seek to equate the developing nations of Brazil and South Africa with, say, Somalia or Sierra Leone.

[Nobody]

Of course, one of the things that the proud Chinese business tradition involves is making knock-offs at a very cheap rate. I remember it happening in Taiwan at the introduction of the very first Apple computers... one could buy an exact duplicate in form and function from Taiwan for half the price.
Now that Macs are actually made in China, it would not surprise me to learn that many Macs are or soon will be floating around in China that have not been officially blessed by Apple. But this practice as well as allowing software piracy was one of the ways that eventually helped MS/Intel solidify their lead in the international market... and now as the affluence increases in developing nations, they can use other tools at their hands (governments) to ratchet the control gradually more and more, which is exactly what they are doing. Chines government is unlikely to mind such things from American business community too much, as long as they can keep the focus on such minor excursions and infringments (in the bigger picture) while they can keep squirling away more important things without much public notice (hint: becoming a superpower takes a lot more than having PCs and why reinvent the wheel when you can buy or steal the design/prototypes).
Interesting times! /forums/ubbthreads/images/graemlins/wink.gif