iPhone App Store doing well in China despite several hurdles

Sales of iPhones through the official Chinese carrier—China Unicom—might not be breaking any records, but app sales seem to be doing quite well. Developers so far estimate that nearly $1 million worth of apps have been sold in just a few weeks, even though there are numerous hurdles that impede the pushing of apps through the Chinese App Store.

One of the roadblocks is that most apps available so far have English descriptions and are priced in US dollars. The App Store also requires a credit card issued from a Chinese bank, which are still relatively rare in China. Furthermore, many of the estimated 2 million iPhones already in country are jailbroken to run apps available outside the App Store, which includes pirated software.

“We know perfectly well that Chinese market is huge and has great potential,” Shi Weixing, founder and chief executive of Chinese mobile application company 9thQ, told Wall Street Journal. “But when we release apps targeting users here, we’re usually not able to get reasonable returns because of piracy.”

China Unicom launched one of the first UTMS-based 3G networks in China late last month, and was also the first Chinese carrier to offer an official iPhone model for sale. Though interest was considered strong, China Unicom only reported that about 5,000 iPhone subscribers had signed up in the first weekend of availability. The market-specifc iPhone lacks WiFi, per then-current Chinese regulations, and sells for the equivalent of over $1,000. Comparatively, unlocked grey market iPhones from Hong Kong are available for about $800.

“Once WiFi is allowed on future 3G iPhones and the price of handsets falls due to product life cycle, more subsidies, or economies of scale, we will see the iPhone market in China go mainstream,” CEO of Beijing-based Shouji Mobile, Frank Yu said.

Applications that are particularly sensitive to Chinese culture seems to be doing well, such as apps for getting around major cities, translating Chinese to English, and software for finding “soul mates.” However, games seem to have a more universal appeal. “We have to consider what kinds of games are appealing to users from the West and the East,” Mao Guangcan, CEO of Colorme, told WSJ. “Sometimes, games we developed for Western users turn out to be bestsellers in app stores in China.”