China is a huge market for Apple, as evidenced by the $60 million Apple recently paid to settle the iPad trademark dispute with Proview. That trademark dispute was preventing Apple from selling the new iPad inside China. China has a huge population, a robustly growing economy, and already accounts for an estimated 1/5 of the revenue Apple generates.
Today, Apple has six official retail stores inside China, and that is a woefully inadequate number. Apple plans to open more stores and had previously estimated it would have 25 retail locations in China by 2012, but it only has six. The holdup is Apple’s particular nature in the quest to find exactly the right spot. The slow rollout of new retail locations means huge lines and lost sales for Apple inside China. Many consumers are still opting for fake Apple stores and the gray market to get their hands on items rather than waiting in line for hours at an official store.
Apple has two retail stores in Beijing, three in Shanghai, and one in Hong Kong. Chinese officials have stated that Apple has plans to open two more retail stores in Chengdu and Shenzhen. By comparison, Apple has eight retail stores in Pennsylvania alone. Pennsylvania has a population of 12.7 million in the entire state while China has a population of 1.3 billion and makes due with a smaller retail presence.