Apple is maybe the world’s most desirable company in the world but its products are not at all that desirable in China, soon destined to be the next world’s largest smartphone market. The company’s recent big $1.05 billion win over Samsung does not change that fact either.
The iPhone maker has to contend itself on the number 7th spot in Chinese smartphone market during the first six months of 2012, said IHS iSuppli. Samsung is the current king in the Chinese market, while Nokia at number 5. Domestic brands like Coolpad, Huawei, ZTE, and Lenovo takes the rest of the positions.
Being a distant seven is certainly not what Apple wants. The American company is used to being on top in almost all regions in the world where it is selling its popular iPhones.
The Chinese market is a crucial battleground for smartphones as China will most likely be the number one consumer of mobile devices in the world before 2012 will close. Chinese consumers have more than doubled their buying spree for mobiles this year compared to 2011, according to HIS iSuppli.
It seems the only way Apple can raise its stakes in China is to offer more attractive alternatives for Chinese customers.
However, that’s not what Apple’s CEO thinks of the situation. He said: “I firmly believe that people in the emerging markets want great products like they do in developed markets,” Cook told analysts on a conference call in July. “And so we’re going to stick to our knitting and make the best products. And we think that if we do that, we’ve got a very, very good business ahead of us.”
Considering Chinese consumer’s income, price is a big issue in buying a smartphone. Unlike their American counterparts who have deeper pockets in terms of spending power, Chinese consumers are very price sensitive as the iPhone’s price range is normally beyond their capacity. An average Chinese smartphone user wanting to get an iPhone will have to save months of hard earned paychecks.
Apple seems intent not to offer any concessions to the Chinese market at all. Probably the reason for Apple’s stubborn tactics is due to the fact that no single handset maker in China really dominates the market. Even the number Samsung only controls about 21 percent of the pie.
Another research firm put Apple at the fourth place with about 10.1 percent while Samsung at 19 percent. The thing is that the Chinese market is so big that getting a double digit share in the smartphone market can already be considered as an accomplishment in itself. Even a 7.5 percent share, as what IHS iSuppli assigns to Apple is worth billions of dollars already.
Experts say many other vendors would love to get to where Apple is right now.