There is no doubt that Apple is not having a field day in China. A lot of investors were right on their money to predict that the company wouldn’t have the same success in China and Asia, as it did in Europe and North America. What investors didn’t predict however, was exactly how unsuccessful Apple and the iphone would actually be in the Asian region.
The Chinese market isn’t won over easily. After the decline of iPhone sales in China, suppliers of the firm became affected as well. Their values declined very quickly after Tim Cook’s open letter in the beginning of the month. At this point, many analysts believe that in order for Apple to revitalize its business in China, a miracle needs to occur. Of course short of a miracle, the other thing that would be a solution would be a price reduction on devices.
Needless to say, Apple doesn’t consider that as a viable option. Cook spoke about the decline in demand earlier this month. According to him, the biggest reason is not the price of Apple’s products, but the ongoing trade war. He believes that the uncertainty caused by the not-so-recent geopolitical issues has been a key factor for the recent iPhone struggles in China.
Apple’s iPhone is losing popularity in Asia
Many experts however, including Wolfe Research analyst Steve Milunovich, believe that the maturity of the iPhone is the key reason behind the decline in sales. The last 5 to 10 years have seen an incredible improvement in performance, hardware and specifications in many areas. The iPhone was always ahead of the pack and offered the best in almost every area. That is definitely not case for the last two years.
The last two years have seen Apple’s advancements in mobile techonology reach a plateau. This is by no means a problem that only Apple struggles with. One of the biggest names in mobile phone manufacturing, Samsung also has the exact same issues. There is a huge pressure of having to revolutionize put on both Samsung and Apple, to which Samsung answered with a built-in Crypto wallet in the new Samsung Galaxy S10. You can read more in the link below.
Due the iPhone failing to deliver and still keeping its high prices, it’s absolutely normal that the interest has dropped. Huawei, Oppo and Vivo do not fall under that same pressure due their affordability. New iPhone models like the iPhone X do not really offer anything to users that the older models don’t have. Apple’s Chief Financial officer, Luca Maestri stated that company’s performance in key markets like China could be affected by the lack of major upgrades.
If phones for half the price offer the same, if not better performance than the newest Apple models, the company will have to go through a radical change. The biggest problem that the company needs to tackle is the pricing. If the price remains untouched, there will virtually zero chance of facing any competition from local Chinese manufacturers.
Tim Cook stated that Apple is focusing on innovation unlike any other company in the world. He also said that the company will continue to challenge local Chinese manufacturers. Investors are still confident in Apple’s long-term trend, but whether or not the company will be able to adapt, remains to be seen.
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