Totally smartphone numbers in China was just released Huawei is in an apple is out. I’m tremendously impressed with Huawei his resilience and grit when it comes to fighting the hardships it’s going through right now, but that’s a topic for another day. Today I want to talk about iPhones, in evitable decline in China, and why China should not be blamed for iPhones bad performance. First of all, I want to emphasise that as the title suggests, I’m not here to tell you that Apple is doomed or its products are bad, quite the contrary, Apple services and its wearable businesses are thriving right now. Apple exit china
Take Apple Music as an example, its subscriber count skyrocketed in a short span of three and a half years right now 16 million people. That makes apple at least $6 billion a year, no company in the world can quite pull this off, except apple. So as long as Apple fans Amazonas continue to pay Apple is happy to make money. However, the narrative for iPhones are quite different. Sales are stagnating competition is getting worse making it harder and harder to justify iPhones rising price, what’s even worse is that people in some parts of the world is waking up to the question is iPhone really worth it. I’m talking about the Chinese. Everywhere you look, whenever Apple’s decline was reported.
It’s always the same story, our sales in China as dipping were caught in the middle of the trade war. Well, I can’t comment on the fact of trade war on iPhone sales, it is not hard to see that iPhone was not doing so well in China, long before trade war even started iPhone sales globally peaked in 2015 with its iPhone six s, so it’s not that Apple is declining because of its bad performance in China caused by the trade war is that iPhones are no longer as competitive as before, and the Chinese are especially sensitive to the merits of a phone. So let’s explore some unique facts about Apple China together.
Fact number one
Apple might be invincible everywhere else, it’s stripped of its ecosystem superpower in China. Many of us have heard of WeChat, but most are unfamiliar with how prevalent it is in Chinese people’s daily lives. It is not only a private messaging app, but it also includes services like ride hailing food delivery buying movie tickets booking hotels and flights, so on and so forth. You can even access many applications on WeChat. This effectively makes WeChat a mega app that replaces iMessage Apple Music and to a smaller extent App Store. Apple exit china
We do not yet know what WeChat will become in the next 10 years, but it is certain that we such competitions Apple’s ecosystem monopoly exists to a much smaller extent in China. Therefore, how Apple China turns out to be will be a good guide for how Apple could become in the rest of the world without its ecosystem superpower. This superpower also manifests in another way, in economics, it’s called network effect to put it very simply network effect is when all of your family and friends, use imessages and you simply can be the outlier to force them to use WhatsApp for you. Just like how everyone in China uses WeChat.
Fact number two
iPhones require extensive telco partnerships to work in Singapore, it’s singtel, m one and star hub and in the United States. It’s of course, at&t, Verizon sprint, and T Mobile iPhones are expensive. It would be much harder to sell iPhones. In the United States, if not for carrier finance plans.
According to a survey done by civic science. COMM 44% of Americans who own a smartphone got it on a finance plan. It took a long time for users get used to and get locked into carrier finance plans, but the Chinese consumers didn’t have that since China’s development only started in the past 40 years, there was no time for such purchasing habits to form before Chinese internet companies moved in and split the market. More often than not a typical Chinese person will buy his smartphone in the direct experience store from Huawei vivo opko, or an online store from Xiaomi without finance options. It is very expensive to buy an iPhone in China. There goes Apple’s sidekick.
Fact number three
local competitions making dedicated smartphones for the Chinese people, many of my Indian audiences are familiar with last year’s poco phone launched by Xiaomi and they sold like hotcakes. This is the kind of strategy adopted by Apple’s competitors nowadays they customise not only the prizes, but also features of a smartphone for the audience, targeting Huawei Xiaomi vivo Opel and Samsung. Apple exit china
All of them have premium smartphone lines and budget smartphone lies. Take Huawei as an example, its mate p series, selling for 100 US dollars is dedicated for business users Nova targets young who loves taking pictures and listening to music, and there’s also a Huawei enjoy series only available in China, dedicated to those who love watching videos with their smartphones. Every series is dedicated to a specific group of audiences our use cases, and they’re legit better for that particular group.
So the war on Apple is rather a competition between two sales philosophies. On one side is the apple philosophy where the iPhone is an object of perfection that everyone desires and gets, but on the other side is the Chinese philosophy against one size fits all, customising for each group with features dedicated for them. It’s too early to tell which one is winning for the global emergence of product fragmentation speaks positively for diversification. At the end of the day, Apple’s situation in China is unlike anywhere else. It’s not fair to say that Apple China is like a superman without its powers because the Chinese people do still desire, the apple brand, but underneath the brand is a hollow empty base without Apple’s ecosystem support. So it becomes a grant test to consumers of China how attractive Apple’s brand is without MacBooks iOS App Store, iPads air pods and telco partnerships locking in customers, as far as I can tell, Apple’s brand isn’t as magical as we thought it is in the developed part of the world