Most Americans can’t fathom the idea of Apple struggling to compete in the smartphone race, but that is exactly what is unfolding in China. In fact, Apple is being beaten by four other local handset makers.
It might be making inroads, but the question is how far Apple can go. It isn’t killing the competition; it’s merely joining in the race. China Wireless has not exactly been hurt since Apple stepped into the arena. The company expects sales to rise 40% this year, thanks to high-demand products like the recently launched Coolpad 8060 phone. It retails for less than $100 — much less than the price of an iPhone 5.
Yes, despite all the glitzy hype that is presented in America when Apple launches a new product in China, a significant majority of consumers there simply cannot afford an iPhone. Samsung is the leader in the region, because of its differentiated product portfolio. Apple needs to start barking up this tree if it wants to grow in China — and based on recent financial happenings at the company, it needs to grow in China.With its one billion residents, a local economy that is resilient and strong enough to produce huge amounts of commerce, and an increasing presence of the global fervor to have the latest and greatest products, China sounds like the perfect dream for multinational companies looking to expand.
So why is it, then, that when a worldwide leader like Apple finally dives off the deep end and plunges hard and fast into the emerging market, it still has a tough time fitting in? Okay, yeah, the price has something to do with it. But it’s more than that.
It’s not just Apple, either. One of the most infamous examples of an American company failing in China is Best Buy. It just wasn’t viable — the company found out that it’s one thing to build a giant store in middle America with low rent and turn a profit from selling low-margin items. That wasn’t able to work in downtown Shanghai, where many successful businesses are tiny stores that sell nothing but high-margin product.
Then there’s eBay, which started to gain an increasingly strong presence in China… until the company decided to cut costs and handle all traffic in the region from US-based servers. That caused huge decreases in load times, leading to a mass exodus that eBay has yet to recover from.
And finally, there are the companies like Walmart, which see their market share in China decrease and yet do little to adjust their business model. China is a wildly fluctuating market, and you have to move fast — and be willing to change — in order to succeed, according to a CNBC report a couple months ago.
It might be making inroads, but the question is how far Apple can go. It isn’t killing the competition; it’s merely joining in the race. China Wireless has not exactly been hurt since Apple stepped into the arena. The company expects sales to rise 40% this year, thanks to high-demand products like the recently launched Coolpad 8060 phone. It retails for less than $100 — much less than the price of an iPhone 5.
Yes, despite all the glitzy hype that is presented in America when Apple launches a new product in China, a significant majority of consumers there simply cannot afford an iPhone. Samsung is the leader in the region, because of its differentiated product portfolio. Apple needs to start barking up this tree if it wants to grow in China — and based on recent financial happenings at the company, it needs to grow in China.With its one billion residents, a local economy that is resilient and strong enough to produce huge amounts of commerce, and an increasing presence of the global fervor to have the latest and greatest products, China sounds like the perfect dream for multinational companies looking to expand.
So why is it, then, that when a worldwide leader like Apple finally dives off the deep end and plunges hard and fast into the emerging market, it still has a tough time fitting in? Okay, yeah, the price has something to do with it. But it’s more than that.
It’s not just Apple, either. One of the most infamous examples of an American company failing in China is Best Buy. It just wasn’t viable — the company found out that it’s one thing to build a giant store in middle America with low rent and turn a profit from selling low-margin items. That wasn’t able to work in downtown Shanghai, where many successful businesses are tiny stores that sell nothing but high-margin product.
Then there’s eBay, which started to gain an increasingly strong presence in China… until the company decided to cut costs and handle all traffic in the region from US-based servers. That caused huge decreases in load times, leading to a mass exodus that eBay has yet to recover from.
And finally, there are the companies like Walmart, which see their market share in China decrease and yet do little to adjust their business model. China is a wildly fluctuating market, and you have to move fast — and be willing to change — in order to succeed, according to a CNBC report a couple months ago.
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