By most accounts, the iPhone's debut in China has been lackluster. Figures at the only Apple Store in Mainland China are incredibly bad. They sold 10 on Saturday and only one on Sunday. The Apple Store manager hopes that sales pick up during the week.
This, in a nation of 1.3 billion people and almost 800 million mobile users. In fact, China's leading mobile carrier has more subscribers than the US has citizens.
What's the problem?
Apple has been selling grey market iPhones to the Chinese through the open iPhone sales in Hong Kong and neighboring countries.
What's more, these grey market iPhones are better equipped than the official Apple phones. Until recently, the iPhones weren't allowed to have Wifi in China so that's been stripped out (strangely, the ability to have Wifi has been reinstated, and so Apple will need to sell the ones without Wifi that it has already produced).
The grey market iPhones are also cheaper and widely available. Finally, once they buy a grey market iPhone, users can switch networks at their leisure, the unlocked iPhones able to switch networks based on the SIM card installed. The official iPhones are like AT&T iPhones: stuck with one carrier, even for international travel.
So Apple might have already finally met its match in when it comes to Chinese competition...from other iPhones.