Why is Apple inviting piracy?

By keeping new gadgets limited to certain markets, Apple and Google are openly inviting piracy. The Chinese have already started rolling out ‘original-looking’ fake iPads before the official Apple launch

Apple, the maker of iconic products—like the Mac, iPhone and iPad—and Internet search giant Google, which has entered the mobile handset business, seem to be avoiding the real growth markets, China and India.

There are a number of product manufacturers in these booming Asian countries like Suzuki and Nokia, who are doing extremely well for themselves. But, for reasons unknown, Apple and Google appear to be avoiding these countries and are restricting their new products to limited markets, mostly in the West.

A latest report indicates that the Chinese, known for their bulk production and duplicating capacities, have already started manufacturing and selling fake iPads in that country. But why is China not getting the real thing? And is India not technologically savvy enough for Steve Jobs?

There is a good demand for both iPhones and iPads and Google’s Nexus One in China and India. But these manufacturers seem overwhelmed by the demand for their products in Western countries. It looks like they are incapable of satisfying demand from other countries, even if their respective marketing departments want the same.

But by not carrying out parallel product launches across the globe, both Apple and Google are openly inviting piracy.

According to research firm Ovum, there are already an estimated 1 million knock-off iPhones sold in China, muddying the waters for Apple and its local partner China Unicom. Last week, Microsoft won a case against Chinese Dazhong Insurance for intellectual property violation. While the damages sanctioned by the local Chinese court amount to just $318,000, small change for the software giant, the ruling is significant because Microsoft loses more than 80% of its revenues in that country to piracy.

So what would be the best strategy for both Apple and Google to gain more from their latest products? First, both companies should look at simultaneous product launches across the globe. You just cannot ‘deny’ certain markets a new product—people will either buy these products from online stores (you can even get devices which are ‘broken’ from innumerable websites, not attached to any particular service provider).

Second, to stay competitive, these manufacturers have to drop the prices of their devices, not sell them at currency conversion rates—they have to retail them considering the purchasing power parity in these countries, much in the way books are sold in India. For the record, the iPhone 3G is sold in India through Bharti Airtel for Rs29,500—way above what the local market would pay for this product, not counting Apple aficionados.

Product leaks are also very common—a few days back, a prototype of Apple's 4G mobile phone was left behind at a bar by an Apple employee, Gray Powell. What if the prototype had landed up in the wrong hands? It would have been back to the drawing board for Apple. One can only hope that Western manufacturers will learn the right lessons—after all, we are all living in a truly global village now.

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