Apple Drops to Fifth in China’s Mobile Market | Bloomberg

Discussion in 'China' started by Martian, Jul 6, 2016.

  1. Martian

    Martian Respected Member Senior Member

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    This is one of the biggest business news stories of the year. Apple is losing market share in China, which is the world's largest smartphone market. In contrast, Huawei has extended its lead as the market leader in China to 17.3% of total smartphone shipments.

    At a more fundamental level, the question is whether the fall of Apple and the rise of Huawei is a replay of the IBM PC vs. Apple Macintosh.

    Thirty years ago, Apple sold a proprietary closed-system personal computer called the Macintosh. It lost to the open-system IBM PC and clones.

    Today, we have another proprietary closed-system Apple iOS running on iPhones. The competitor is the open-system Android that operates on Huawei smartphones.

    The factors are exactly the same as thirty years ago. Apple charges a premium for its proprietary devices. Huawei has caught up in the hardware technical specifications and features. The Huawei smartphone matches the Apple iPhone in capability, but the Huawei smartphone costs noticeably less.

    The result is the expected loss of Apple market share in China, while Huawei grows larger. The important question is whether Apple will change strategy. If Apple maintains premium pricing like thirty years ago, it will become a marginal player in China. On the other hand, if Apple starts cutting prices then it could become very competitive.

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    Apple Drops to Fifth in China’s Mobile Market as Locals Rise | Bloomberg Technology

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    Last edited: Jul 6, 2016
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