iPhone Chases China Window, Oct Launch Likely
With Alibaba’s blockbuster IPO nearly in the past, attention will turn over the next few weeks to tech giant Apple (Nasdaq: AAPL) and the mystery surrounding the lack of a launch schedule for its new iPhone 6 in China. While Alibaba is a story of hype, the iPhone 6 saga is quickly becoming a tale of intrigue, as everyone tries to guess what’s happening behind the scenes to delay this other highly anticipated event. China’s own media are helping to fuel the suspense, with a new report from the Xinhua central news agency providing clues about what looks like a tangle with China’s censors.
This latest tale began last week when Apple formally unveiled the iPhone 6, and then mysteriously yanked China from its Asia launch set to take place on September 26. (previous post) At first I labeled this stumble as a gaffe, as clearly Apple believed it would be able to launch the iPhone in China alongside other major Asian markets like Hong Kong and Singapore. But now this unexpected delay, which obviously wasn’t planned, is actually looking slightly positive for Apple, as it adds an air of intrigue and buzz to the new iPhones that perhaps could boost sales when it finally goes on sale here.
All that said, let’s look at the latest reports that quote a Xinhua story saying that Apple has received all the necessary licenses except for one that it needs to launch the iPhone 6 in China. (English article) The missing license, which needs to come from the bureaucratic Ministry of Industry and Information Technology (MIIT), is one that allows the phone to operate on the mobile networks operated by the country’s big 3 state-run telcos. Apple has already received another important license that allows the iPhones to operate on frequencies used by the 3 carriers.
No other information was included in the Xinhua report, and this kind of delay isn’t all that unusual in bureaucratic China. Such bureaucracy kept China off previous iPhone launch maps until last year, when Apple was finally able to include the updated version of its iPhone 5 in a global launch. That development led many people, myself included, to believe that Apple had finally gained an understanding of Chinese bureaucracy and had the resources necessary to include China in all future iPhone global launches.
Apple apparently also thought it had mastered the process, which is probably why it initially included China on its Asia launch announcement before abruptly removing the country a day later. Some tech executives speculated on their microblogs that the issue at the heart of the unexpected delay involved a new iPhone feature that required the storing of data on Apple servers. (previous post)
They speculated that China’s strict censors didn’t like the fact that such data from Chinese iPhone users might be stored outside the country, making it legally unattainable for Beijing officials who might want to examine such information. That situation may have led Apple to announce last month that it would store some of its China user data on domestically-based servers (previous post), and perhaps now the company is scrambling to implement that arrangement to conform with Beijing’s requirements.
If that’s the situation, which seems quite probable, then the next question becomes: When will the iPhone 6 finally become available in China? I’ve seen a wide range of reports on the matter, some saying the iPhone may not officially come to China until as late as 2015. My more educated guess is that if Apple already believed it had taken necessary steps to satisfy Beijing, then the remaining issues are probably small and the company is working now to quickly resolve the situation. If that’s the case, we can probably expect to see the iPhone launch in China in October, and to quite possibly get a boost in sales from publicity related to the mystery of the launch delay.
Bottom line: Apple’s iPhone is likely to launch in China next month due to delays involving licensing issues, and could get a sales boost due to publicity surrounding the mysterious delay.
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