October 30, 2009: Two years after launching in the United States, the iPhone finally goes on sale in China, giving Apple a chance to reach the world’s largest market.
Regulatory hurdles previously blocked Apple’s access to China. With those problems solved, Apple offers the iPhone 3GS to the country’s 1.3 billion people, most of whom do not yet own smartphones.
First iPhone goes on sale in China
When the iPhone finally went on sale in China in October 2009, it arrived with an almost absurd handicap: Apple’s revolutionary smartphone couldn’t connect to Wi-Fi. Regulatory restrictions forced the company to strip out a feature that had become fundamental to the iPhone experience, and the top model cost more than $1,000. Yet Apple was betting on something bigger than an immediate sales hit. China represented an enormous untapped market where hundreds of millions of people were poised to embrace smartphones — and where Apple’s ambitions would eventually reshape the company’s fortunes.
It marked the beginning of a complicated relationship, one that would turn China into both a crucial customer base and a manufacturing powerhouse for Apple. Nearly two decades later, that relationship remains one of Cupertino’s greatest advantages — and one of its biggest vulnerabilities.
iPhones on the Chinese gray market
iPhones had been unofficially available in China since early in the product’s life. By 2008, a year after the original iPhone launch, BusinessWeek reported that 800,000 to 1 million iPhones had gone AWOL after legitimate purchases. Later rumors claimed that 400,000 of those iPhones, sold on the gray market and unlocked via hacks, operated on local networks in China.
However, October 2009 marked the first time Apple’s smartphone became easily available on a local Chinese carrier (Unicom). The device cost up to 6,999 yuan ($1,025) for the top-end 32GB iPhone 3GS. That price came in fractionally higher than a typical black-market iPhone at the time.
The first legal iPhones in China labored under a huge disadvantage as well: the aforementioned lack of Wi-Fi functionality. Beijing, wanting to promote a rival Chinese system, banned the wireless technology. The country relaxed its stance in May 2009, after Apple began manufacturing custom iPhones — without Wi-Fi — for the Chinese market. (Later Chinese iPhone models included Wi-Fi.)
As a result, iPhone sales in China didn’t become a massive game-changer for Apple until a few years later, when Cupertino finally closed a deal with China Mobile. That brought the iPhone to the world’s largest wireless carrier.
Apple and the Chinese market
Today, despite reservations from some, Apple remains incredibly keen to embrace the Chinese market, as illustrated by the astonishingly rapid expansion of Apple retail stores in the country.
China is now second only to the United States when it comes to App Store revenue, according to Statista. Apple executive chairman Tim Cook says the company designs new products specifically with the Chinese audience in mind. And China remains an important market for iPhones and other Apple products.
Still, Apple faces new challenges in in the country. The trade war that erupted during President Donald Trump’s second term in office brought tariffs on a wide range of countries, including China, where Apple traditionally manufactured most iPhones. Those tariffs continue to shift as the two countries threaten each other and hammer out deals.
Meanwhile, Apple continues to diversify its manufacturing base outside of China, with more manufacturing taking place in India, Vietnam and other countries. As a result, the majority of iPhone 17 models headed to U.S. customers were built in India for the first time. And Apple continues to strengthen its manufacturing efforts in the United States.
Other tensions remain as well. The Chinese government remains hostile to smartphones from companies headquartered outside of the country. And Cupertino only recently struck a deal that paves the way toward launching Apple Intelligence to China.
Despite these ongoing problems, Apple continues to court Chinese business for good reason. China remains a gigantic market (as well as a manufacturing powerhouse). And Apple likely thinks it can function as a “force for good” in the authoritarian country.
Luke Dormehl is a U.K.-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Apple Revolution and The Formula: How Algorithms Solve All Our Problems … and Create More, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme and other publications.
