Today's Big Stories for September 24, 2012

Island controversy, China as a jobs' bogeyman, coal mines, lower forecasts, automotive dealer plight, and iPads for students.

1. Japan PM says dispute with China could hurt economy

Noda, who is scheduled to make a speech to the United Nations General Assembly this week, addressed reports that Japanese companies are facing economic harassment in China, telling the Journal that "recent delays in customs and visa issuance are of concern." He said damaging economic ties between the two nations could hurt the global economy.

2. New Romney Ad: Obama afraid to 'stand up to China'

For the second time in as many weeks, Mitt Romney's campaign released a new television ad blasting President Barack Obama as weak against China on trade. "Fewer Americans are working today than when President Obama took office," the ad's narrator says. "It doesn't have to be this way. If Obama would stand up to China."

As I post previously today, China isn't the problem when it comes to American jobs. I guess China's still the jobs' bogeyman (for both candidates). Oh well. 

3. 22 trapped in three col mine accidents in China

Three separate coal mine accidents over the weekend left 22 miners trapped in northeast and east China, according to local government sources. Eleven people were trapped after a fire broke out Saturday morning in a coal mine in northeast China's Heilongjiang Province. The accident that occurred at the Longshan coal mine in Youyi County of Shuangyashan City was previously reported to have happened on Sunday as a result of the mine owner's attempt to cover up, the rescue headquarters said.

4. Asia mostly lower as commodity firms weigh

China’s GDP growth outlook was cut to 7.5% from 8%, while Japan’s forecast was lowered to 2%, South Korea’s cut to 2.5%, and Singapore’s trimmed to 2.1%, the credit-rating firm said in a statement. “Our lower forecast for China recognizes that the central government had elected not to inject an economic stimulus of a size and speed necessary for an 8% growth rate,” S&P credit analyst Andrew Palmer said in the statement.

5. Car dealers see market shift to lower gear

Car dealers nationwide have begun to experience life in the slow lane after government policies to spur sales ended last year. Also putting the brakes on sales were ownership restriction rules starting in late 2010 that were intended to ease traffic congestion in cities such as Beijing and Guangzhou. In addition, the economy has slowed this year, exacerbating the plight of dealers. "For some car brands, we have inventories on hand of up to four months worth of sales," Pang Qinghua, chairman of Pang Da Automobile Trade Co. Ltd. said. "The normal stockpile lasts for one and a half months."

6. Chinese high school gives free iPads to senior students

And the schools are making sure the students are focused on homework, too, by locking out popular social networking apps and other time wasters.

Apple to start selling new iPad in China on July 20

Update - Now with more iPhone 5 launch speculation. 

Up until now it's only been the iPad 2.

Apple will start selling the newest version of the iPad in China on July 20 after paying $60 million to settle a dispute over the ownership of the tablet computer's name.

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Apple often brings products to China later than in other countries. The iPad model coming to China this month went on sale in the U.S. and several other countries in March. 

How long will Apple continue its tradition of releasing new products in China months after the initial worldwide launch? China is Apple's second largest market. How soon in the future will we see a joint US-China release? iPhone 5?

Apple currently only has 5 mainland stores and that number would be no more than 7 or 8 by the time the iPhone 5 is released. Certainly it can't be that much trouble to control a zero-day device release when there are so few stores, although Apple has had problems in the past. Is Apple worried that opening the Chinese market on day one would put too much strain on their production chain? Why not take inventory of an iPhone 5 away from Europe to fill a launch day need in China? After all, China is Apple's second largest market (and world's largest smartphone market). China's also a country with a huge amount of iPhones for sale on the blackmarket, especially after an iPhone has been launched in other countries but not yet in China. So why not directly target this market from day one and not allow the import blackmarket any space or time to grow? 

I'll be interested to watch the iPhone 5 announcement and see the slide indicating when and where the iPhone will be launching. What if Apple were to announce an iPhone 5 launch in the US and China on day one, with the rest of the world following in the months after? Shouldn't Apple be focused on putting its products into its two largest markets first? 

Makes sense to me.

Update: More Thoughts

Last October 14th, Apple launched the iPhone 4S on day one in the US, Canada, United Kingdom, Australia, Germany, France, and Japan. Two weeks later it launched in 22 other countries, most of them in Europe. The iPhone 4S wasn't released in China until January 12th, 4 months later (just like the New iPad). 

Apple is clearly focused on the China market, making vast improvements for Chinese users in Mountain Lion, adding Mandarin language to Siri, and setting aside time during the keynotes to specifically talk about these improvements. 

The question is... why not launch the iPhone 5 in the US and China at the same time.

These are Apple's two most important markets. If it's a matter of initial product inventory, why not drop smaller markets like Australia and France from the initial launch and also push back release dates for other various European countries. Does Spain really need the iPhone before China, especially with its current economic troubles? What about consumers in Estonia, Slovakia, Italy, and Liechtenstein? They all got the iPhone 4S before the China launch date was even announced. So what about the upcoming iPhone 5 launch schedule.

Which initial launch would Apple prefer for iPhone 5 (keeping in mind countries not included below can launch in the two-four months after)?

Option 1 - US, Canada, United Kingdom, Australia, Germany, France, Japan (same as iPhone 4S launch)

Option 2 - US, China (not including China Mobile) 

Option 3 - US, China (not including China Mobile), United Kingdom, Germany

Option 4 - US, China (including China Mobile). 

Below I have calculated potential subscriber base for each release based on Wikipedia numbers. 

Option 1 - 594 million subscribers (I included total wireless subscriber bases in Canada, UK, Australia, Germany, and France. Only included Softbank in Japan) 

Option 2 - 597 million subscribers (Verizon, AT&T, Sprint, China Unicom, China Telecom. Even without China Mobile, this subscriber base is larger than all of Option 1 combined.)

Option 3 - 786.44 million subscribers (I threw in what are probably the two most important European countries - UK and Germany.)

Option 4 - 1.263 billion subscribers (With the addition of China Mobile, the US and China market alone more than double all the potential subscribers in option 1.)

Even Option 2, which launches the iPhone in only China and the US and doesn't include China Mobile, gives Apple a larger subscriber base than Option 1, puts the iPhone 5 immediately into Apple's two largest and most important markets, and also puts the iPhone 5 immediately into the largest smartphone market in the world. 

Is the answer really as simple as Apple keeping to tradition, launching with Option 1, and coming to China months later? Or is their new focus on China in their keynotes a foreshadowing to a possible change in their launch schedule? 

Time will tell. 

Interesting stat I did not realize and other Apple-China news

# of people per Apple Store (5) in China: 266 million

# of people per Apple Store (246) in US: 1.2 million

So Apple would need a total of 1,108 stores to have the same people/store ratio as in the US. According to iDownloadBlog, Apple will open an additional 27 stores by the end of the year (including two in the near future, one of which is probably the mythical Shenzhen store). Apple's China stores are their most profitable by square foot, so they better start building fast. (By the way, iDownloadBlog originally calculates the people/Apple Store ratio here in China as 216 million to 1. Not sure how that can be if in their own article they quote a population of 1.33 billion and 5 current Apple Stores. Am I somehow misreading their article?)

Secondly, M.I.C Gadget has posted a long analysis of many of Apple's upcoming stores. Here's what they have to say about the forthcoming Shenzhen store (which appears to be two levels!): 

So let’s talk about the upcoming Shenzhen Apple store. We pinned the location down to Yitian Plaza. Yitian Plaza is a newly constructed group of buildings in Shenzhen. It has hundreds of shops, a cinema, restaurants and a nice [sic] skating rink. It covers 35,000 sq/m and has a total of 135,800 sq/m coverage. It is a very important shopping mall in the Nanshan district of Shenzhen. Also, many rich people live in this part of the city so the demographics are very good for high end retailers. Most important, the Apple store is as usual an anchor store. However, we did get our exclusive photos.

They esitmate it will open Q4 2012 or even Q1 2013. A few of their construction photos are below. Check out their site for more photos and info about other mainland openings. I shouldn't get excited about new Apple Store openings, but it's been so long since I've had an official Apple Store in my hometown. This is important stuff. 

While writing this, I found the below photo from M.I.C. Gadget of the Beijing Sanlitun Apple Store. Guess I now know what operating system runs that huge screen.  

Apple is being sued by a Chinese household chemicals company over the 'Snow Leopard' name. The company is asking for an apology and $80,645. To most this may seem like pocket change for Apple and they should just pay it an be done with it. But Louis Bedigian over at Benzinga argues that Apple must take this suit very seriously and fight it will all means possible:

Critics will surely dismiss the suit as a nuisance claim that could not possibly have a negative impact on Apple. The Next Web referred to it as a "simple piggyback lawsuit that is attempting to cash in on whatever negative sentiment there is toward Apple with the Proview settlement."

That could be an accurate assessment. And that is exactly why Apple should take this lawsuit as seriously as a multi-billion-dollar patent dispute.

China is an enormous country. There is virtually no limit to the number of Chinese companies that could have legitimate claims against Apple trademarks. What will happen when they hear about these lawsuits? Will they contemplate the value in going after Apple for what some would refer to as a small amount of money? Or will these firms ignore the value and go after Apple just to make a quick buck?

$60 million settlements can add up pretty quickly. 

Lastly, seems Mac computers in China are being targeted by malware, possibly aimed at activists:

The trojan appears in email inboxes as a picture attachment which, when opened, secretly installs information gathering and remote control tools, characteristic of advanced persistent threat (or APT malware).

Security experts say that the trojan was almost certainly created in China...

Good thing I'm already extra careful about email attachments, although I already assume my computer is full of China-based malware.