《Apple iPhone Loses Ground to China’s Homegrown Rivals》 （The Wall Street Journal）
Apple Inc. brought the high-end smartphone to China. Now it is sputtering as homegrown rivals win over consumers by offering similar designs and features at far lower prices.
While Tim Cook, Apple’s chief executive, blamed China’s economic slowdown for weakening sales that hurt its global revenue in the past quarter, the company’s problems run deeper than that. The Cupertino, Calif., tech giant may have underestimated how competitive domestic smartphone makers have become, analysts say.
Once a top-seller in China, Apple has slipped to the fifth-biggest phone seller in that country, trailing four domestic producers that have all been growing in popularity. Despite developing more features targeted at Chinese consumers, Apple’s market share has stagnated.
Chinese rivals including Huawei Technologies Co. and Oppo and Vivo, which are owned by BBK Electronics Corp., have rolled out popular features such as camera functions designed for users to take better selfies.
Moreover, Apple’s iOS operating system is proving less “sticky” for Chinese consumers than in other markets because smartphone users spend a large chunk of their phone time inside WeChat , a chat, payments and social-media app from Tencent Holdings Ltd.
Chinese consumers who won’t pay for the status of brandishing the top-priced iPhone model are considered more fickle when it comes to brands, said Mo Jia, a Shanghai-based analyst at market-research firm Canalys. As the economic slowdown pushes consumers to tighten their purse strings, such consumers are generally more inclined to consider cheaper, non-Apple smartphones, Mr. Jia said.
Apple on Wednesday slashed its quarterly revenue forecast for the first time in more than 15 years. In a letter to investors, Mr. Cook said the revenue shortfall stemmed from lower-than-anticipated iPhone sales in Greater China.
The worse-than-expected performance in China adds to pressure on Isabel Ge Mahe, who was appointed in 2017 to oversee the crucial market that accounts for almost 20% of Apple’s global sales. Apple posted sales growth in the Greater China region for five consecutive quarters until the quarter that ended Sept. 29.
中国业绩差于预期增加了Isabel Ge Mahe的压力，他于2017年被任命为负责监管苹果全球销售额近20％的关键市场。苹果公司连续五个季度在大中华地区的销售增长，直到截至9月29日的季度。
Following the arrest in Canada last month of the Huawei’s chief financial officer Meng Wanzhou at the behest of U.S. prosecutors investigating sanctions violations, some Chinese companies have openly encouraged their employees to purchase Huawei phones.
MICHAEL CORRIGAN : Apple has built a phone with not so hot features and tried to pass it off at really bloated prices. People revolt and don’t purchase. Stock takes a dump and Cook blames China. The Apple mystique vanishes as people go for cheaper phones at 1/3 of the price of iPhone.
Joseph Solomkin : I’m missing something. Their market share remains at 8%, with a growing market. Difficulties mass models selling over the top price (for a substantially poorer population than US) has been harmed without a killer feature.I would have expected WSJ to identify more specfic problems.
Sam Pyeatte : American companies seem to be operating under a “stupid” spell. Of course China steals from ALL companies that manufacture in China, yet the companies keep going there. The manufacture of most products can be at least partially automated. Generally speaking the only part of the manufacturing process that is better done by humans is final assembly where “fit and form” is critical.
Rene Pharisien : It would be interesting to know how the “homegrown competitors” developed their technology to compete against the “designed in Silicon Valley – made in China” i-Phones.
Jim Ridenhour : many use Qualcomm chips. Qualcomm recently announced a 5G chip with more features and capability than anything Apple currently has. Apple owes Qualcomm over 7 billion dollars in unpaid royalties. Apple has tried around the world to put Qualcomm out of business by destroying Qualcomm’s patent licensing model. As a parting shot, the Obama admin FTC filed a lawsuit for anti-competitive practices against Qualcomm in the final days of the administration. Trial begins this week.If the FTC prevails, much of Qualcomm’s intellectual property will be available free to not only Apple but also Huawei and other Chinese competitors. Talk about stupidity on the part of the government, take our IP champion out and let the rest of the world win! How stupid is that?
C Wung : In a nutshell, way too expensive! That is a global sentiment on Apple products, not just in China. The fat profit days are over given the maturity of the product.
C Cook : Given that Apple the ONLY smartphone company making gross margin, hard to say ‘those days are over’.More likely, a pile of new Chinese competitors will go away before Apple.Depending on how much of the Chinese taxpayers money they can suck down.
Dominik Stepan : Apple should start courting its customers again instead of it shareholders ! There is a difference between healthy profit margins and pure greed !
Steven Chen : 10 years agoiPhone was KING in Chinese markettime has changedChinese smart phone makers have caught up it is time for Tim Cook to emulate Trump by yelling:Make Apple Great Again – MAGAChinese love slogans
Andre Leonard : “Despite developing more features to woo Chinese consumers, Apple’s market share has stagnated”There is a beginning, a middle and an end to everything.
C Cook : Apple is the number ONE premium brand in China. Not just for smartphones, but for ALL products.Scarcity creates desirability. Image creates margin.
Liang Xiang : Apple always charges a premium for it products, but the brand is losing its cachet among Chinese consumers. The next big question is whether the trend will happen with its US customer base.
Owen Monroe : Do you hate capitalism? I think competition is a good thing.
Jeff Boone : If you really understand capitalism it requires the sharing of the returns with labor. Otherwise it is three guys at the top making the coin. That is not real capitalism.
Jian Yang : GM, McDonlad, Microsoft, GE, Starbucks… all have dominate market position in China for 20 years and more. China was small American export market when China opened up, now China is the the 3rd largest export market for the US…can ignorant American ever speak with facts? Just because China grew much faster than the US, now you calling China win at the expense of the US?
Heath Anderson : Apple can also blame it’s high prices. I’m not an Apple fan but even it I were, I wouldn’t spend that much on a phone. Time to bring prices back to earth.
MICHAEL SHORE : The $1,500 smartphone market is small and shrinking, especially where the main thing you are paying for compared to other smartphones is a little bitten apple logo.
Owen Monroe :Maybe Apple can secretly find a much cheaper phone. Those are treacherous waters, though. In general, Apple only has a small number of options to escape this conundrum. However, they have the money . But so did Blackberry and Nokia. They didn’t do so well.
C Cook : Drop prices = lower margins.Will end up like ALL the other smartphone companies, selling lots of stuff but not making any money. HP and Dell PCs for instance.All major consumer electronics companies, save Samsung, are OUT of the smartphone business.Why? Because western governments do not subsidize them as the Chinese do their companies. And, the other countries don’t let their Army tap into user data as the Chinese do.
J Seders : How much of Huawei and these other thieves is actual Apple property?
Stephen Orr : Until it becomes discovered that the Chinese made phones are easily hackable and all of your privacy is uploaded to behind the Great Wall of China…. Commodity, not. I prefer a more secure smartphone with my information and would pay more for even more security.
Graham Arader : The employees of Apple wont let their children near an iphone.
TONY TERI : The phones made by Chinese companies are much more affordable than Apples.
C Cook : And, you get the FREE BACKUP of all your calls, data, and financial passwords to the Red Army servers.No doubt the same ones that hold all the data from Equifax, IRS, and Bureau of Personnel for the US Civil Service. And, plans for most of our military gear.I wonder why that isn’t part of their advertising??
James Burt : They copied it. Duh.
Alexander Aghayan : The iPhone needs a new form factor and name. It’s starting to sound dated like Oldsmobile.
David Markun : Except where, as mentioned in the article, the Chinese brands were feature leaders and Apple has copied them. Consumers benefit when manufacturers stand on each others’ shoulders to create better products.
Geoffrey Polma : Supply and demand catches up. Chinese makers like Huawei and OnePlus make cell phones that are roughly comparable to Apple’s best for maybe 55% of the price, hard for Apple to compete.