There’s A Riot Going On

Michael Hedges January 16, 2012 Follow on Twitter

Mobile devices are the trendy thing. For consumers, smartphones and tablets are fashion statements. For content producers they are the must-have platform. Will some have egg on their faces?

There was a “near riot” when Apple’s main Beijing store was forced to close rather than face customers angered that the new iPhone 4S smartphone wouldn’t be available. Thousands had lined up in the trendy Sanlitun shopping district the night before, many scalpers, to get their hands on the latest and greatest mobile icon. A sign was posted early Friday morning on the shop’s door, reported China Daily (January 14), telling frustrated customers to buy online. Out came the eggs.

The Chinese market – and Asia generally – has rapidly become the all-important growth area for many consumer products, mobile devices in particular. “China contributed 16% of Apple’s revenues during its fiscal quarter ending September, growing almost three times from a year earlier,” reported Xinhua (January 13). At last count there are nearly one billion mobile phone users. Every media content producer and provider has China on the mind every day.

Apple is, of course, the undeniable consumer technology marketing leader. The iPhone 4S has been available Europe and North America for about three months. Along with China, the iPhone 4S was released on Friday the 13th in 21 countries, mostly in South America, the Caribbean and Africa. No similar riots were reported elsewhere; the appetite for mobile devices in Asia is insatiable. The most interesting new feature to the iPhone 4S is the Siri voice recognition system, though not yet available in Mandarin.

Well-organized scalpers were obvious among those lined up at the Sanlitun Apple store, one of two authorized dealers in Beijing. There are three Apple stores in Shanghai. Migrant workers were offered CNY 100 (about €12.50) plus dinner to line up early, reported Xinhau, and buy the smartphones for the list price of about CNY 5,000 (about €625) so scalpers could tack on an additional CNY 900 (about €100).

By contrast China Unicom, the world’s third largest mobile telecom, offers a free iPhone 4S with a three-year contract. Chinese consumers, it seems, are hedging their mobile bets, expecting connection and bandwidth charges to drop, along with generic brand smartphones, while premium smartphone costs appreciate. Interesting economics, this.

“Despite slowing growth in developed markets, robust growth in emerging markets, particularly emerging APAC (Asia Pacific, China and India) and Central and Eastern Europe, has helped sustain global spending in 2011 at the relatively healthy level of 8%”, reported GfK Boutique Research for the Consumer Electronics Association’s big CES show in Las Vegas (January 8).

Television sets have been eclipsed by mobile devices – smartphones and tablets – as the place for video content, reported consultancy Accenture in its annual consumer behavior survey released for the CES. Between 2009 and 2011 weekly broadcast and cable TV viewing within ten major national markets – including China – fell from 71% to 48%.  “The battle for consumers’ eyeballs and time is intensifying, viewership continues to disperse, and we are starting to see the impact on the TV as a screen in the home,” said the Accenture release. “Craving an always-on, always-connected lifestyle, consumers increasingly are using other consumer electronics devices in their daily lives to access the entertainment that only TV once provided. While consumers will no doubt continue to buy TVs, consumers’ preferences are shifting. They are rapidly substituting other screens, such as laptops, desktops, tablets and smartphones, to view media content,” About 10% of the consumers surveyed watch videos on their smartphones.

Apple, believe it or not, has competition in China. Giant chip-maker Intel and Chinese consumer electronics manufacturer Levono are introducing two new smartphones, which, unlike the iPhone 4S, will be introduced first in China. “We are transforming Lenovo from a leading personal computer company to a leading personal internet device company,” said Lenovo mobile/digital president Liu Jun at the CES. Levono’s K800 smartphone will feature 360-degree touchscreen video, a hot new thing for the geek set. News Corp’s The Daily introduced 360-degree interactive news photos for the iPad (Apple) about a year ago.

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