Apple Missing Chances in China?

Despite fierce demand for its products in China, where the company’s fourth quarter revenues quadrupled this year to $4.5 billion, Apple is missing out on potential sales due to high prices and poor support for Chinese networks, according to Reuters:

It is not that ’s iPhones and iPads are losing favour among Chinese consumers. The iconic products are flying off the shelves at ’s five flagship stores in Shanghai and Beijing, unauthorized sellers, and even from fake shops dressed up to look eerily like the real thing.

The problem facing Apple seems to be timing.

Network technology is not sufficient to fully support and iPad capabilities, while other handset makers supply phones that support the various mobile standards used in China ….

In fact, Apple’s smartphone market share shrank to 10.4 percent in the third quarter from 13.3 percent in the previous quarter. Samsung’s shot up to 19.2 percent from 14.6 percent and Huawei to 11 percent from 7.3 percent.

As John Gruber argues at Daring Fireball, however, “Apple’s business has never been about capturing the entirety — or even a unit-share majority — of any market. They just make cool things and sell them for a profit. That’s it.” The company’s aversion to the profit-thin low-end market appears to have served it well. Industry analyst Horace Dediu estimates that while iPhones comprised only 5.6% of all mobile phones sold worldwide in Q2 2011, Apple wrung almost twice as much profit from phone sales that quarter as all its rivals combined.

December 20, 2011 12:25 AM
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