Apple wilts in China

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http://www.ft.com/cms/s/0/5af2897a-5549-11e6-befd-2fc0c26b3c60.html#axzz4Gi6Y8ypz

Apple’s flagship store in Wangfujing, a central shopping district in Beijing, is a hive of activity. But, unfortunately for the iPhone maker, most people are not there to buy.

Part of the problem may be short term, according to staff in the shop. Many Chinese are putting off buying an Apple device until the new iPhone 7 model comes out in September, says an employee, who adds that a lull in sales before a big launch is to be expected. “There’s no reason for any concern; when the new phone comes out sales will pick up,” he says.

Liu Shan, a matronly woman guiding her teenage cousin around the store, is one of the few seemingly in the shop to buy a phone — but even she fails to show the sort of devoted Apple fandom that made China the company’s largest market outside the US.

“She’s just a student,” she says of her youthful charge, flicking through a display of iPads, “so there’s no need to wait for an iPhone 7. We’re very pragmatic.”

This lack of excitement points to the bigger problem Apple faces in China. A drop in revenues in the country by a third last quarter signalled to some that the company’s capacity to dazzle smartphone shoppers has been diminished amid stiffer competition from cheaper local competitors producing more technologically advanced devices.

The fall in sales should not have come as a surprise. Baidu, China’s biggest search engine, used a fall in search queries as a proxy for foot traffic to Apple stores to correctly predict a 23-34 per cent year-on-year fall in Apple’s quarterly revenues in China.

Chinese smartphone users are no longer buying into the hype as they once did. When Apple first launched an iPhone in 2009, the smartphone was a status symbol for young Chinese middle class consumers.

Apple consolidated its position with the release of several new phones aimed at the local market, briefly pushing the group to the top of China’s smartphone market last year.

But Xiang Ligang, an expert on China’s telecommunications sector, says that Apple now faces a challenge in “keeping itself interesting” in China, namely that the group was “looking like a trend follower these days”.

———

aww..heres a tissue..dry your eyes..

“Chinese smartphone users are no longer buying into the hype as they once did. When Apple first launched an iPhone in 2009, the smartphone was a status symbol for young Chinese middle class consumers.”

401

~ by seeker401 on August 12, 2016.

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