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Captalist Apple to enter Communist China for Market Push.

In China, most fans of apple's products here have been buying their iPhones, iPods and Mac computers from smugglers who operate through underground electronics markets. The company has few sales outlets in the country and only one Apple Store, a branch in Beijing.

Apple set to open a flagship Saturday in Shanghai, one of its largest stores in Asia to raise its profile in the world’s biggest mobile phone market and tap more directly into China’s fast-growing consumer electronics market.

Apple intends to open 25 retail stores in China over the next two years, starting with the Shanghai outlet, which it previewed for reporters Thursday.

“We view this store as a kind of launching pad,” Ron Johnson, senior vice president of retail operations at Apple, said Thursday.

Analysts who follow Apple say that China offers a huge opportunity for the a company because Apple’s market share in the country is tiny — less than 5 percent in most major categories.

“Apple plans a major invasion of China over the next 18 months to two years,” said Charles Wolf, an analyst who follows Apple for Needham & Co. and credits its retail stores with significantly bolstering Apple’s brand. “To date, Apple has not been a force in China. But it will be.”

But other analysts say Apple faces significant hurdles in China. The company’s product releases have been dogged by delays. Sales through official distributors have been weakened by prices that are substantially higher than in the United States, fueling a brisk underground trade in smuggled goods.

The iPhone, for instance, was officially released in China only late last year, nearly two years after it was introduced in the United States. By then, analysts say, more than one million iPhones had been brought into the country by tourists or smugglers.

Apple also faces stiff competition from Nokia, Motorola, HTC and other mobile phone brands that use Google’s Android operating system. Those companies have been aggressively marketing their products in China, which has more than 650 million mobile phone users.

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