Apple’s smartphone market share in China witnessed steepest decline this year. Apple CEO Tim Cook blamed the weak Chinese economy behind sluggish iPhone sales. Whereas, he missed on some other reasons including the intense competition from domestic brands, longer replacement cycles, and some strategy failures. A new report today unfurls another major reason behind Apple’s decline in China.
According to an iPhone user in China, Apple lacks country-specific content for services like iTunes. He only used App Store, and relied on popular Chinese apps – WeChat for messaging and payments, IQ for video streaming and listens to Music on NetEast Cloud Music. He is still using iPhone 7 because he feels new iPhone models are too expensive in comparison with the features they offer.
These are the significant problems faced by every Chinese user. The user prefers a device which can offer localized content with ease. Apple needs to reinvent the whole strategy to conquer markets like China.
Rather than being the “iPhone company”, Apple is now shifting focus on services for lucrative profits. It has become a vital part of Apple’s revenue generation. A refocused approach is today’s need to lure Chinese customers back into the fold. It will not be an easy task for Apple to make services a major revenue stream. Whereas, Ryan Reith, Vice President of IDC “don’t see them ever getting the service advantage that they see certainly in Western markets, ever in China.”
The company needs to invest a lot more time, effort and capital to conquer China’s market. As like of the hardware business, they need to tackle the increasing competition from local services like Wechat, IQ, etc. Ryan Reith said: “The one market in the world where Apple doesn’t have its full ecosystem advantage is China, and that’s because WeChat has basically been able to encompass everything from pay to games to communication to all these different things. It makes the ecosystem advantage that they have in basically every other market… extremely lower on the value chain.”
It’s entirely difficult for the Cupertino giant’s service business to excel in China. The companies like Google, Amazon and Facebook have already failed in the country.
According to a recent IDC report, Apple sales significantly dropped in China on a YoY basis. The company shipments reduced to 36.4 million units in Q1 2019 from 52.2 million units in Q1 2019, a change of over -30.2%.
The Chinese hardware manufacturers like Huawei, Xiaomi and others are already squeezing Apple’s growth. Whereas, its services are also not as par with the expectations of the Chinese users. Various government regulations are increasing Apple’s difficulties to operate at full potential.
However, Apple needs to tailor its services to succeed in the Chinese market.
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