Thursday, January 24, 2013

China Apple dilemma: market share or Cachet?

The third Apple Inc's disappointing quarter just crying the global technology leader for drum up new revenue - and China could provide the answer.

Now, more than ever, analysts say Apple must get it right most populous country in the world, where it ranks only sixth in annual smartphone sales Samsung Electronics remains the runaway leader.Apple has the best plan of attack to secure a deal with the country by far the best mobile carrier, China Mobile Ltd. It also pushed the development of more local apps and installment financing extended to expensive smartphones within the reach of the urban populace average annual income of just $ 3,500.But it should resist the temptation to just put out a cheaper iPhone, say some analysts. Could introduce a long-rumored lower-cost versions of the gadget backfire by diluting premium brand Apple - one of the most valuable assets."If you think of Apple, it looks like a bright star in the galaxy, shining brightly and everyone is looking at it. Yet it could be dimmed a bit because other stars such as Samsung have popped up," said TZ Wong, an analyst at research firm IDC."I do not think that the Apple's interest to further dim the star power by stepping into the low-end segment."Apple product pipeline with the same state secrets protection given zeal, some analysts are focusing instead on what they need to make the world's largest technology company to finally become a major player in the world economy No. 2.While iPhone sales jumped 60 percent last quarter, investors worry that, in the long run, the company has its own pricing golden opportunity by Samsung and local rivals Huawei Technologies Co Ltd to ZTE blanket the market with cheaper phones rival the iPhone in quality and usability.The deal with China Mobile, the world's largest mobile phone carrier with over 700 million users, creating instrumental but analysts say that can not happen until the issuing of 4G wireless, which may occur more later this year or even in 2014."The competitive landscape is definitely cranked up a few notches from a year ago. Therefore, there is greater urgency for Apple to explore ways to grow," said Wong CIR.CEO Tim Cook made it no secret that China is an area of ​​intense focus on the iPad and iPhone maker, especially because the penetration is still low across the country of smartphones and tablets. Apple has said that it will continue to expand its retail network, and in January, Cook flew to Beijing for a time at least the second year, to meet with key carrier China Mobile.IS A STAR dimmedOn Wednesday, Apple missed revenue forecasts for the third quarter just after iPhone sales came in below expectations, fanning fears that dominate of slipping consumer electronics.Apple revenue in China, including Hong Kong and Taiwan neighboring, 7300000000 total of $ in the December quarter, up 60 percent from the previous year.But there are signs Apple that Cachet claimed the most populous nation in the world obsolete.Recent product launches for the iPad and iPhone 5 mini to draw relatively subdued response from the consumers of China, in stark contrast to the fist-fights and egg hurling at Beijing store a year ago when sales were delayed iPhone 4S.Since the iPhone 5 went on sale in mid-December, transactions fall half, by the Taobao Index, the consumer research website details the Internet giant Alibaba Group.The iPhone is also losing out as consumers opt for larger screen to watch Chinese soap operas while traveling on trains or affordable smartphones in the sub-1, 000 Yuan category ($ 160) made local vendors."When I started using the larger screen, there was no turning back for me. Smaller screens do not work more," said a business executive surnamed Wen, as he swiped the screen on Samsung Galaxy Note during lunch in Beijing.About half of the more than 60 million smartphones shipped in China in the third quarter last year was more than 4 inches screen, based on the latest IDC figures. The iPhone 5 comes with 4-inch screen, while the the Note Galaxy II 5.5 inch screen.In addition, there are local vendors Coolpad smartphone maker Yulong Computer Telecommunication Scientific (Shenzhen) Co., Ltd, which offers cheaper options, and Meizu Technology Co., Ltd, known for its minimalist design, seen on a legion of growing followers.Price is the key factor, especially in the Chinese market where about 80 percent of the more than one billion mobile phone users are still on 2G networks.Taobao website online, Coolpads and low-end models made by Huawei Technologies Co. Ltd. and ZTE Corp. are selling less than 1,000 yuan, the sweet spot for many consumers switch from basic phones to smartphones.Apple has moved to address that, in partnership with China Merchants Bank to provide financing and installment options so buyers can pay by credit card when shopping online bank, said media reports .Finally, an increase in the number of applications customized for China help Apple market share growth, but could more intensive cooperation with Chinese companies such as Baidu Inc. and Tencent Holdings Ltd. are required"Consumers will certainly welcome closer cooperation between Apple and Chinese high-tech firms to customize the iPhone for using apps like with Tencent WeChat," said Frederick Wong, executive director of Avant Capital Management (Hong Kong) Ltd, a fund that invests in Apple-related options.
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