Apple iPhone’s smaller screen size, lack of localized mobile apps, could hamper sales in China

“Apple Inc. haggled for six years to clinch a deal to sell the iPhone through China Mobile Ltd. The quest to win holdout customers in the world’s most populous country is far from over,” Adam Satariano and Edmond Lococo report for Bloomberg. “Forrester Research projects the deal will lift Apple’s smartphone market share in China by just three percentage points to 8 percent. IPhones — including the new lower cost iPhone 5c — remain too expensive for most customers in a country where competitors offer cheaper alternatives with in-demand bigger screens. Other hurdles facing the iPhone include the limited rollout of China Mobile’s high-speed network, a scarcity of apps compared to other handsets and a dearth of Apple-owned retail outlets.”

“With the China Mobile deal, Apple isn’t going after market share, said Benedict Evans, an analyst with Enders Analysis in London. Apple’s strategy is to attract wealthier customers who can afford an iPhone, letting the company maintain its industry-leading profit margins. Getting about 2 percent of China Mobile’s customers equates to about 20 million new iPhone sales, according to Deutsche Bank AG. Adding the iPhone on China Mobile will particularly challenge Samsung’s leadership for high-end smartphone sales,” Satariano and Lococo report. “As it tries to lure customers, Apple doesn’t have as robust an ecosystem of software applications in China as it does in the U.S. and Europe, said Lydia Bi, an analyst with Canalys. Chinese vendors have more localized services available than Apple. ‘The quality of content of the Apple China Store cannot compete with some Chinese local vendor’s as well as Apple’s own stores in more developed countries,’ Bi said.”

Satariano and Lococo report, “Apple’s smaller screen size compared to rivals may limit sales as well, said Bryan Wang, principal analyst and country manager in China for Forrester. About 40 percent of Android devices sold through carriers in China in 2014 will have screen sizes above 5 inches, compared to the 4-inch iPhone screen, he said. ‘Consumers in China particularly like larger screen devices,’ he said.”

Read more in the full article here.

21 Comments

  1. Well, Richard Devine reported on Sept 16 that ” a report out of China (translated) suggests why this is a very big deal for Apple:

    ‘Up to now, China Mobile iPhone users in the network has reached 42 million, which has exceeded the U.S. AT&T and Verizon combined sales of the two operators.'”

    So it seems that the Chinese like the iPhone very much.

    What nonsense Adam Satariano and Edmond Lococo spout! Apple will do just fine as always.

  2. Or not. Every market Apple has penetrated has originally been described as unique and not susceptible to Apple’s allure, but it always turns out differently because value can be discerned, no matter what the culture.

  3. So, iPhone is gonna fail because too expensive and no keyboard… it succeeded crashing the entire phone industry.
    iPhone is gonna fail because it does not have interchangeable battery… again, it succeeded..
    and again and again so many prediction of failure and so many ANALyst failing to predict iPhone’s failure turning it so called weakness into a great success…
    So, are those so called ANALyst in a competition to prove who is the dumbest of all???

  4. Why wouldn’t the iPhone have apps for Chinese consumers? Apple has been selling iPhones on China Unicom and China Telecom for quite a while. Besides what would prevent Chinese programmers from writing more apps for the iPhone? They would likely be able to profit more from their apps once they did since the iPhones would be targeting those consumers willing to spend more money.

    The iPhone’s smaller display doesn’t seem to be tremendously affecting sales in Japan, so why would it be so much of a hindrance in China. It’s always possible that the larger display smartphones are being pushed by salespeople and consumers just go along with it.

    If the iPhone is actually a status symbol in China, consumers will certainly purchase them. No iPhone prices or subsidies have been announced as of yet, so why are these people drawing such negative conclusions before even one iPhone has been sold? I’d be happy if Apple could even sell 4 million iPhones more per quarter as a start through China Mobile because it’s still added revenue for Apple.

    I don’t know why these analysts keep expecting Apple to compete on a unit for unit basis against smartphones that are so much less expensive. It’s a given that Apple won’t sell as many iPhones as those local brands. BMW can’t sell as many vehicles as Toyota which is easily understandable.

  5. These analysts desperately want to find a story to replay the Microsoft / Apple competition in the OS market. They don’t want to see someone rise above the average of the rest of the market because mediocracy is their mantra. No one should strive for excellence.

  6. You can tell who received coal in their stocking for Christmas. Talk about cynical, seeing a full glass as the potential to spill. Let’s go over some of Adam Satariano satyrical and Edmond Lococo puff comments:

    “It also paves the way for Apple to battle market-share leader Samsung Electronics Co.”: Typical war mongering comment, hey what’s the US without a war… not much, not that they are much now anyway.

    [iPhones] “remain too expensive for most customers”: Yawn, non story, that’s what Balmer and a host of others said and continue to stay. It’s part of the “Apple is doomed” chant by the cult.

    Here’s an interesting grouping of concepts:
    [China ] “is just beginning to roll out a high-speed LTE network that is compatible with the iPhone.” An expansive roll out = GROWTH

    “Apple doesn’t have as robust an ecosystem of software applications in China”: Of course not, but it will. Chinese developers will flock to make apps for this and that. It’s called GROWTH.

    “Apple also has a relatively limited company-owned retail presence in China.” More GROWTH options.

    ““The quality of content of the Apple China Store cannot compete with some Chinese local vendor’s as well as Apple’s own stores in more developed countries,” Interesting statement, and why can’t Apple compete and frankly does it need to? Due to localized services? Please, butchers do fine in some areas, just as general grocery stores as well. Once again this is a dynamic situation there are options and potential for GROWTH.

    “Apple’s smaller screen size compared to rivals may limit sales as well”. What a yawner, another page out of Balmer and other’s playbook.

    What a fine start after Christmas to maintain the lack of journalistic integrity so common these days. Invest in coal folks, looks like there will be a high demand for it for Christmas next year.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.