Why Apple is not one of China’s top 5 smartphone sellers

anymore

 

The company Canalys released some figures recently showing that Apple became only number 7 on the Chinese smartphone market, instead of number 5 earlier.

china-smartphone-market-2013

 

So Why is that ?

–          First it is well known that Apple smartphone are quite expensive. And for example Xiaomi  is selling low cost phones, and is able now to produce a lot more items  in the same time. Moreover, The Company intentionally does not big margin on hardware. In fact, the mobile brands need to adapt to emerging markets. Xiaomi surpassed Apple in the second quarter of 2013, with 4.4 million units.

 

–          Then, Apple didn’t release the new Iphone 5s at the right time. In fact they released it earlier than usual, and it had less impact on the second quarter’s sales than it might have.

 

 

–          The taste of Chinese consumers changed: “phablets”, the smartphones with big screens are more popular in China now, and Apple doesn’t offer this kind of products. The people who could by an Apple phone would now prefer a mobile with bigger screen, and if it’s cheaper, the choice goes even more easily to other brands. Moreover, Chinese consumers like to often change phone, but the prices of Apple’s phone make it difficult.

 

phablet

–          Because of “Guanxi” (=relationships in Chinese), many Chinese phone companies have partnerships with web companies and telecom companies, such a s the partnership between ZTE , which is number 4, and China Telecom: when someone buys a SIM card from China Telecom, the online mobile he can get for free is a ZTE phone, which makes it easier for this company.  Xiaomi also said it would create a project with Tencent, the biggest Chinese web company, by doing advertising together : Tencent would invest in Xiaomi. Apple is not very involved in these kinds of partnerships, and doesn’t do these kinds of projects. Apple prefers to sell its products in its own stores.

 

Xiaomi-Red-Rice-new-phone-03

 

–          Still about the price, few Chinese people can afford an Apple phone, and those who can often already have one. The market is then saturated, the demand is slowing down. And the group of rich Chinese people is growing not as fast as the Chinese middle class, who buys low cost smartphones for example.

 

–          Apple use to be a fashionable brand, created the buzz, and was popular among hipsters and geeks. But to Chinese customer, knowing the brand is stagnating, is became kind of boring, compare to new fashion and connected brands like Xiaomi and Meizu. Apple products are not as “cool” as before.

 

–          Lenovo and Huawei are also hard to surpass, because they’re some of the biggest companies. In fact, is the second biggest communication company in the world, and Lenovo is the second manufacturer of smartphones in China with 11% market share and a 998 million turnover in the country. The brand is especially well-known over the world for having bought IBM in 2005. It is also important to notice about Lenovo that the brand also sells low-cost smartphones, and is supported by the biggest Chinese companies such as Alibaba, Baidu and Tencent.

 

Read this article to have more details , and this article to know more about the development of the smartphone sector in China.

 

Written by Antoine

Marketing China