In a first for the China market, the iPhone 5s and 5c were available in the country at launch, instead of being delayed by several months the same is true of the iPad Air. He believes Apple can find other ways to boost sales and be successful in China even with a small percentage of the market.Īnalysts are now hoping for a few quick jolts to Apple’s fortunes. “The cost of ramping up iTunes and enforcing the content lock-in in China would be very high for Apple and would not guarantee results,” de Renesse said. The customers who do want to use iTunes face roadblocks: As Bloomberg Businessweek points out, service can be slow because servers aren’t based in China, and Apple only added the ability to pay with local currency a couple of years ago. Alternative app stores abound, including pirated versions of iTunes and according to analytics firm Umeng, 30 percent of iPhone users in China jailbreak their devices. and elsewhere, Apple can’t simply build on a decade of consumers using iPods. Ronan de Renesse, principal analyst for Analysys Mason, noted that Apple’s version of iTunes in China offers only apps and ebooks, and unlike in the U.S. It’s a much different situation than in the United States, where Apple’s reputation for having the best apps and the most content keeps users hooked. It’s worth noting that Apple has one big disadvantage in China that doesn’t apply in markets like the United States: Customers in the country aren’t as locked in to the Apple ecosystem. The Chinese version of the iTunes Store offers much less content than, say, the U.S. The pattern is similar to what we’ve seen in other parts of the world, where “good enough” phones and tablets are gobbling up Apple’s market share. Last quarter, competitors such as Samsung, Lenovo, ZTE, Yulong, and Huawei all outsold Apple in smartphones, according to estimates from Canalys. But a look at the competition is telling: Apple’s products are being outsold by less expensive devices.
In Apple’s third-quarter earnings call, CEO Tim Cook blamed the slower sales partly on economic factors. As for the iPad, IDC said in August that Apple’s quarterly market share fell to 28 percent, down from about 50 percent the year before. In the third quarter of 2013, Apple’s share fell to 4.8 percent-its lowest level in three years. But since then, Apple’s share has tapered, and the launch of the iPhone 5 late last year brought only a 0.6 percent boost, bringing its share to 8.5 percent of China’s smartphone sales. Estimates provided to Macworld by Canalys show that with every new iPhone model through the end of 2011, Apple’s market share in China spiked to increasingly higher levels, peaking at 18.9 percent with the iPhone 4s. Meanwhile, Apple’s smartphone and tablet market share has been shrinking in China. Apple’s biggest spike came in the first quarter, when the launch of the iPhone 5 helped boost revenues by 67.4 percent but in the quarters that followed, earnings increased by just 7.5 percent and then fell by 13.9 percent. In the first three quarters, China revenue was $19.7 billion-just a 15 percent increase over the previous year. (It helped that Apple had launched an online store in China, along with a Chinese version of the App Store, during the previous fall.)Ĭhina sales continued to slow in 2013.
According to IDC, the iPad had cornered nearly two-thirds of the tablet market in China in the first half of 2011. And when the iPhone 4 went on sale in October 2010, Apple hit the 100,000 sales mark in China within just four days.Īround the same time as the iPhone 4 launch, Apple also began selling the iPad in China, and the tablet quickly became a strong seller. (Apple’s first store, in Beijing, had opened two years earlier.) In Apple’s first two quarters of the 2010 fiscal year, its revenue in China more than doubled, to $1.3 billion. Sales were slow at first it took over a month for China Unicom to sell 100,000 iPhones-that’s compared to the 1 million units sold across eight other countries on the iPhone 3GS’s opening weekend alone.Īpple has a dozen retail stores in China, including this one and three others in Shanghai.īut sales ramped up quickly as Apple added more distribution points in China for its new iPhone, along with a second Apple Store in Shanghai in July 2010.
In those early days, the iPhone had a few challenges working against it: It was an expensive and hard-to-find product, and it was crippled due to local regulations that prohibited it from using Wi-Fi. This was the first real foot in the door for Apple: The iPod and the Mac had never been strong sellers in China, and previous iPhone models were only imported or sold on the gray market. For Apple, the real action began in late 2009, when the iPhone 3GS officially went on sale through China Unicom, which, despite an impressive 140 million subscribers, is only the country’s second-largest wireless carrier.
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