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iPhones Produced in China Smuggled Right Back in
Ponca City, We Love You writes "Factories in China produce iPhones that are exported to the United States and Europe and then smuggled right back in helping explain why Apple says it sold about 3.7 million iPhones last year while only 2.3 million are actually registered in the United States and Europe. For Apple, the booming overseas market for iPhones is a sign of its marketing prowess but also a blow to Apple's business model, costing the company as much as $1 billion over the next three years, according to some analysts. Since negotiations between Apple and China Mobile, the world's biggest mobile-phone service operator with more than 350 million subscribers, broke down last month, the official release of the iPhone in China has been stalled producing a thriving gray market. Copycat models are another possible threat to Apple in China. Not long after the iPhone was released, research and development teams in China were taking it apart, trying to copy or steal the design and software for use in iPhone knockoffs, or iClones and some people who have used the clones say they are sophisticated and have many functions that mimic the iPhone. "A lot of people here want to get an iPhone," says Shanghai lawyer Conlyn Chan."
People in China are going to satisfy their demand for iphones one way or another. Not to bother with the ethics of the situation, but much like any other type of piracy, this is just a market at work. We truly live in a global economy now. Regional releases and other such nonsense just don't make sense any more. If you release a product with global demand, make sure you can supply it globally or it will be pirated, smuggled, etc. If Apple cares at all about the Chinese market, then they need to ink a deal fast, because someone will supply iphones in their stead if they don't get something done.
I got a catholic block.
Can't say I'm all that surprised about the phones being used in China or the copycats. I guess with one of the world's largest markets, there's going to be a healthy "grey" market too.
-mrxak
Onions Will Kill You
Basically this "funny math" is saying: "We get $X from phone sale, plus $Y from the carrier deal. We expect to sell 1M phones, which means (X+Y)*1M $. We noticed that we actually sold 2M phones! Yay! But then we noticed that only half of those phones actually signed up for plans."
So they now claim that they have lost Y*1M $ because people didn't sign up.... umm... no. You made an additional X*1M $. That is not a loss. That is a profit.
"Costing" indeed.
Doesn't really matter where you build it, people can get something and reverse engineer it no matter what. It's really more of an issue of market forces meeting demand where there is no legal supply.
-mrxak
Onions Will Kill You
Sure, and with China's well documented tendencies towards theft of intellectual property, no one should be surprised.
What we should be doing here in the US, though, is everything we can to discourage use of Chinese products. There's no need to give China all our wealth and in the process create a powerful competitor. Problem is, we're already there...now it's time for damage control. The one good thing about a weak dollar policy is it will help.
Good thing we have a big crop of American scientists and engineers to compete into the future! Oh, wait...
Galileo: "The Earth revolves around the Sun!"
Score: -1 100% Flamebait
Sure, and with China's well documented tendencies towards theft of intellectual property, no one should be surprised.
Going with the Slashdot meme here, it's not theft because they haven't taken it away from you - you *still* have your IP.
But then I guess that it's only when $BIGFACELESSCORPORATION is complaining about you downloading their products in violation of US copyright law that such semantics come into play.
When another country is getting competitive against the US they *must* be *stealing* your ideas!
Gah, I hate that terminology. Making a business model around a certain fee structure, and then failing to get people to play along with your business model, is not a cost. It's just like those piracy reports where they say they LOST a billion dollars because people who were never going to buy the product ended up not buying the product. Apple may fail to meet projections. Apple may wish more people would fork money over to their exclusive business partners. Apple may have had their heart set on a shiney new building or parking lot or bonus for Steve, but not being able to meet those expectations isn't a loss or a cost. It's a failure.
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Perhaps, but you don't hear people whining about cheap westrn-European knockoffs, or mid-western-American knockoffs much.
The Chinese make cheap goods:
1) People like to buy cheap goods
There, fixed that for you.
Capitalism/The Market is to blame. People want to buy commodity goods (virtually everything these days) as cheaply as possible.
China has, in the past, reverse engineered entire automobilies, built them cheaply, then sold those as OEM. This is a huge problem because we all know most knock-offs don't have the same quality standard as the origional. But at the same time they make true OEM auto makers jump through hoops in order to just get their server parts into the country (I've been dealing with this for the past two years).
China's trade practices are unfair and their government encourages deceit. It is IP theft.
And I don't even work for a US based company... so it's not US vs China.. it's China vs the Industrialized world.
"Action without philosophy is a lethal weapon; philosophy without action is worthless."
Your whole post is simple minded but this takes the cake. You think a country with a population of over 1 billion people that is joining the ranks of developed nations can be forced by an embargo to change their ways? You do realize just how many American dollars they own right?
In your ideal view of the world the only things we get from China is the cheap crap we don't need, and if we could just stop being addicted to cheap crap things would go right back to being pleasantville. Keep thinking that while sitting on a chair made out of chinese parts, wearing clothes made by chinese companies, typing on a computer manufactured in china. Do you really want the job of making these things? Wouldn't you much rather get an education and sit around and post on slashdot all day?
It looks like there will be more and more China bashing coming up, and it makes sense. It is easier to see the world as black and white, us vs. them. It is easy to disregard how complex a 1 billion person social system must be that has underwent revolution after revolution in the last hundred years. It is easy to proclaim that American's are the only ones that can properly carry out capitalism, when the Chinese have only been at it for 20 years.
and trust me, I don't like Clinton or her ol' boys network, but you don't know anything about business if you think cutting off one of the largest growing markets is a good idea.
"how can they call it a MINE if everything here is THEIRS?!?!" -Straight Jacket
Perhaps, but you don't hear people whining about cheap westrn-European knockoffs, or mid-western-American knockoffs much.
Mainly because not much in those regions is cheap, and trademark & copyright laws are enforced against commercial entities that would try to make those knockoffs. China, Taiwan and such may have laws but the enforcement is quite lax.