Apple’s China problem may require a new iPhone tailored specifically for Chinese users

“For years, Apple Inc. has operated on the assumption that it gets to set the world’s tastes. Its struggles in China are causing some close observers of the technology giant to say that needs to change. The handful of new iPhone models Apple announces every September are a take-it-or-leave-it proposition for global buyers. That formula was rejected in the latest quarter, when Apple’s Greater China sales fell 27% to $13.17 billion, prompting an extraordinary revenue warning in early January that sent its already battered stock skidding further,” Tripp Mickle reports for The Wall Street Journal. “Some former employees and analysts suggest a more radical change: End Apple’s one-size-fits-all-markets approach for products and aggressively push to differentiate its gadgets and software in China from its offerings elsewhere.”
“‘They’re not adapting quick enough,’ said Carl Smit, a former Apple retail executive in Asia who is now a strategic sales consultant. ‘These apps and systems are how people communicate in China, and if you don’t have seamless integration, the Chinese manufacturers have an edge,'” Mickle reports. “Creating more customized iPhones for China could help Apple battle increasing competition from local companies such as Huawei Technologies Co. and Xiaomi Corp. It would empower local executives to be more nimble in the face of unexpected events like the U.S.-China trade feud that has soured consumers on American brands.”
“Huawei, Xiaomi, and others have challenged Apple by launching dozens of products annually aimed at evolving local tastes,” Mickle reports. “As early as 2012 and 2013, China staffers suggested Apple introduce phones with a second SIM card, a popular feature in China where many people have a second phone number or travel often. ‘We’d say, ‘Here’s what my consumer wants,” said Veronica Wu, who worked in sales for Apple in China before becoming a venture capitalist at Hone Capital. But Apple’s product executives ‘were a black box,’ she said, and the phones that were later unveiled didn’t have the features gaining traction in China. Dual-SIMs are now so popular that about 93% of smartphones sold in China have them, according to market- research firm Canalys. But Apple didn’t introduce iPhones with dual-SIM capabilities until this past September.”
Read more in the full article here.
MacDailyNews Take: Apple has stepped up efforts as of late. In July 2017, the company created a new managing director role for China, hiring Isabel Ge Mahe. Based in Shanghai, Ge Mahe leads teams across China to develop iPhone and iPad features specifically for the country. Dual-SIM iPhones are one of the first results of Apple’s sharpened focus in China. We expect iPhone and iPad features tailored specifically for Chinese users to proliferate and accelerate in future iPhones.
Apple needs to kill their stupid “S” cycle iPhone concept. It’s self-defeating to cycle every other year with a set of iPhones you mark as “no big deal.”
[Another] problem for Apple in China is WeChat. Apple has much less “lock-in” and is only competing with hardware and features like dual SIMs (to which they were late). — MacDailyNews, January 7, 2019
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