Data show that Apple\’s Chinese market is being swallowed!

The past few days could very well be the worst ones for Apple in the last 13 years. In Tuesday, the news on Apple’s first drops in sales and profits in more than a decade attracted eyeballs from all over the world, which also immediately hammered Apple’s stock price, causing an 8% drop in the after-hours trading that day. Suddenly, people stood and said “listen, is this Nokia the 2nd on the way?” Well, maybe it is still too early to conclude like that at this moment. However, just by taking a closer look at Apple’s recent performance in Asia – especially in Chinese market, one would certainly realize: this is not a drill! 

According to TrendForce, the world leading market intelligence provider’s report, in the first quarter of 2016, shipment of iPhone in China has taken a huge dive (from 75 million to 42 million), causing a record-breaking drop of 43.8%. In the very same quarter, the sale of iPhone in Greater China Region decreased about 26%, while its global decrement was about 20%. Data from the mobile engagement platform Localytics further shows that for the first weekend after iPhone SE’s releasing, sales volume of this new model takes only 0.1% in that of all iPhone models, which is significantly worse than the previous products like iPhone 6 (2%), iPhone 6s (1%) and iPhone 5 (0.9%). All kinds of data have been indicating that in the very near future, iPhone might no longer be the most favorite fashion icon for Chinese customers, and become no more than “another smart phone”. 

Why are the Chinese starting to turn their back on iPhone? Analysts believe that within all kinds of reasons behind such an awkward situation, Apple’s obvious failure in localizing their product to adapt the different culture and user habits in China (especially on the software aspect) could be playing the most important role. 

It is well-known that iOS, the tailor-made operating system containing rich functional official i-series apps, is a major selling point of iPhone. Apple proudly claims that iOS brings outstanding performance, with the official App Store providing centralized, strictly reviewed (and therefore trustworthy) app source. However, this is not the exact picture witnessed by the Chinese iPhone users. On one hand, they have to endure bloated iTunes, turtle-like iCloud, miserable official Chinese input method, etc.; sometimes, even a simple small bug could exist for more than a year without being properly patched. On the other hand, App Store is now more and more viewed as a sign of Apple’s lack of openness than what it meant to be, because its privilege restrictions make it so hard for third-party apps to timely fill the localization needs mentioned above. All these issues keep making the experience of using iPhone in China deteriorate year after year, while Apple has been doing little about it. 

An intuitive example of Apple’s blind confidence is its super-long race towards opening iOS’s input method interfaces. Despite the consistent poor feedback regarding to the system’s default input method, it was not until the release of iOS 8 did Apple finally allowed third-party input methods to be used on iOS (which is already 4 years after the releasing of iOS itself, and 3 years after iPhone landed in Chinese market). In fact, this progress is so sluggish, that it is not even viewed by the public opinion as a sign of Apple showing a more opening attitude, but rather an unwilling acknowledgement saying that they finally gave up on improving their own input function. Right after third-party input methods are allowed, users immediately witnessed how Sougou input method stormed into Apple’s App Store and dominated devices of Chinese users. This was supposed to be a perfect demonstration on what can be brought to iPhone if Apple would choose to maintain a less restricted OS environment and let the third-parties take care of the localization problems. In fact, being as open as possible is exactly why Android, the most important opponent to iOS, keeps rising and taking market shares from other smart phone operating systems in the recent years. Unfortunately, even with such a potential solution right on the menu, Apple is still sitting tight – it was said that Apple China does not possess decision-making authority on many aspects; mostly it acts as nothing more than a voice tube. As the result, problems appeared locally tends to stay local and keep being there, even after they started to rot. 

Data from KANTAR shows that from that last December to this February, iOS has lost a total of 3.2% share, while Android has obtained an extra 3.4%. In corresponding to this result, the Chinese local Android-based smart phone products, e.g. Huawei, MI and OnePlus, are exactly devices which rise rapidly in the last few years and keep strangling iPhone’s living space. Worse still, starting from Lollipop, Google’s Android system has also started to focus on improving its operation performance and is making promising progresses. This would certainly encroach yet another (any probably the final) important advantage of iPhone in this competition. It is not a vain threat to say that if things keep go down this road, there might soon be nothing else left in iPhone to praise about other than “the regular users’ love”.

When Icarus flew too close to the sun, he did not take it seriously – at least not until his wings melted. We all know what happened next. The stories of MOTO and Nokia are also reminding Apple: in the game of phone, you change, or you die.

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