Faculty & Leadership Blog / Faculty in the News

The World May Have Changed This Morning

Hours ago, on one of the largest e-commerce sites in the world, Chinese entrepreneurs began selling, for hard cash, places in the queue for the iPhone 5 to be delivered in mainland China from sources unnamed.

Apple has not even announced a release date yet.

This is not a minor detail in the flood of global sound bites.  Developed economies often overlook the fact that developing markets never had the large, cumbersome, high-fixed-cost retail and logistics infrastructure that consumes major portions of GDP in North America and Western Europe.  This means the rapid growth in Asia and Africa has been accomplished with Amazon-like electronic infrastructure, instant logistics, and user-assembled markets.  Electronic retailers throw out some bait at low cost.  If customers bite, then the retailer uses a wide variety of “supply-side social networks” to get physical goods delivered with synaptic speed.  At almost zero fixed costs.

This is not new.  10 years ago when film camera sales dropped so low in America that Japanese camera makers could not support the US retail chain, the Japanese companies stopped selling all but one or two film cameras.

But Asia was still buying high volumes of film cameras, and full lines of cameras were still available there. Virtually instantly, Chinese entrepreneurs used eBay to establish retail links to the US, and sold the full line of film cameras, home delivered in 3 days, at prices lower than those in the US.  That in itself was not the big news.  The Asian entrepreneurs also sold these “gray market” cameras with a better warranty than the US factory warrantee offered by the Japanese camera makers through their brick and mortar retail stores.

The global aftermarket service network in photography was launched, and 15 minutes on eBay today reveals how well developed this entrepreneurial market is.

Some questions for the day.  Where’s the largest mobile device market in the world? China.  Do you think Apple, now one of the “largest” tech companies in the world, wants to prosper over the next ten years?

Is there any reason why Apple should continue to launch its new products in one of the smaller markets of the world – the US?

How well do you think Apple, or anyone, can police the channels selling into 2 billion new global middle class customers?  How well can Apple, or anyone, police leaks from their increasingly larger Asian supply chains?

Ponder these questions as we realize this morning we have just witnessed the “official” launch of the iPhone 5 in a world market now controlled by customers, not manufacturers.

Marty Anderson
Senior Lecturer in Management