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BW Businessworld

Apple's China Woes

The Chinese like the iPhone -- they like it so much that they have a whole industry, complete with fake Apple stores, creating clones

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You may be one of those who believes Apple can do no wrong, but unfortunately for the company, a lot is going wrong for it. The writing is on the wall - and it's in Chinese.

Apple conquered the hearts, minds and pockets of its home country, the US. But with that market reaching saturation point, how is Apple to grow?

But even in the US, it's not all iPhone. The latest sales data from Kantar Worldpanel ComTech for the three months ending in April 2016 shows Android accounted for 67.6 per cent of smartphone sales in the US, followed by iOS at 30.7 per cent. That's why the company has been furiously pushing the Apple Watch and is working on other products to expand its portfolio and reduce its heavy dependence on the sales of the iPhone.

It was only natural for Apple to head to China and its massive populous of smartphone users. But time and again, it's encountered problems there. China is anything but welcoming of companies from the US and constantly puts obstacles in the way with most tech giants not even being able to make an entry there.

The Chinese like the iPhone -- they like it so much that they have a whole industry, complete with fake Apple stores, creating clones.

At the same time, local companies frequently patent-troll Apple, as one such company did recently, accusing Apple of copying their design for the iPhone 6, sales for which were temporarily banned in Beijing.

There's now another big threat to add to Apple's woes in China and as a consequence in general because China is the company's biggest overseas market. According to Counterpoint Research, Apple has just dropped to fifth place in the China smartphone market, toppled by Chinese technology giant, Huawei. A downward trend for Apple in China is very bad news for the company.

If Apple showed the world how to design a phone, today it's on the verge of being out-designed by others. More and more, companies like Xiaomi, Vivo, LeEco, Oppo and others are making phones that not only come with great build and design but with powerful specs at a fraction of the price.

Apple had a bad last quarter with revenue declining for the first time in a long time. This blow is a difficult one to recover from in China. Indeed, this is one reason Apple is trying to step up its game in India including finally looking at opening up the iconic Apple Stores in the country. But unless the company can do something to drastically drop its prices, traditionally not its game, the going is going to be tough in India as well.

Tags assigned to this article:
apple china iphone technology