Apple’s China push threatened by popularity of big screens

“Apple is trying to boost its lagging share of the world’s biggest market by selling handsets through China Mobile Ltd. (941)’s 763 million users starting Friday,” Bloomberg News claims.

MacDailyNews Take: Are they? Is that really what Apple’s is trying to do, increase share? That runs contrary to everything Tim Cook says, so, somehow, we doubt it. From – oh, look, Bloomberg itself! – here’s Apple CEO Tim Cook in September:

There’s always a large junk part of the market,. We’re not in the junk business. There’s a segment of the market that really wants a product that does a lot for them, and I want to compete like crazy for those customers. I’m not going to lose sleep over that other market, because it’s just not who we are. Fortunately, both of these markets are so big, and there’s so many people that care and want a great experience from their phone or their tablet, that Apple can have a really good business. – Apple CEO Tim Cook

So, yeah, we’re going to go with Apple’s CEO on this one, over yet another facile “news” report.

Newsflash for Bloomberg: Apple sells premium products at premium prices to premium customers.

Learn it. Know it. Live it.

Bloomberg News continues, “The iPhone maker faces challenges because many Chinese customers prefer to have one large-screen device for checking e-mail, browsing the Web and watching videos. Every other fourth-generation smartphone offered by China Mobile is at least a half-inch (1.27 centimeters) larger than Apple’s models… Samsung captured 21 percent of smartphone shipments in China in the third quarter, compared with Apple’s 6 percent, according to Canalys. Samsung ranked first and Apple fifth, with three domestic vendors in-between.”

MacDailyNews Take: What share of the mid- to high-end smartphone market did Apple capture? That’s really all that maters to Apple. They don’t compete in the bottom of the barrel like Samsung with 155 feature phones that magically get counted as “smartphones.” Comparing the entire market to the subset in which Apple actually competes is meaningless and disingenuous. If the high-end wants larger phones (and if our polling is any indication, the high-end most certainly does), then Apple should already have larger screen iPhones available. This is Tim Cook’s mistake. He’s left money on the table. Fortunately, contracts run out every day. There’s still time to for Apple to offer proper choice to the mid- to high-end customers that Apple actually wants. One size does not fit all.

And, many Chinese customers do not “prefer” to have one device, one device is generally all they can afford. This is the case in many markets around the world. Apple needs to provide choices to quality customers everywhere. The 4-inch iPhone simply isn’t cutting it for far too many people.

Bloomberg News continues, “Pre-orders for the iPhone have reached about 1 million units…”

MacDailyNews Take: Oh, have they really? That also runs contrary to news reports:

“China Mobile Chairman Xi Guohua said that millions of Apple’s iPhones already have been ordered by its customers.” – The Wall Street Journal, January 15, 2014

That’s “millions,” Bloomberg. Plural. With an “s.” As in, not “about 1 million.” Nice work.

Bloomberg News continues, “Screen size also matters in China because mobile phones often take the place of tablets, personal computers and televisions. Apple’s potential customer pool is limited by the cost of the iPhone, which is more than the equivalent of $700.”

MacDailyNews Take: Actually, in reality, Apple’s potential customer pool is targeted by the cost of the iPhone.

Full article, for what it’s worth (not much), here.

MacDailyNews Take: Again, Apple isn’t targeting the entire smartphone market, just the worthwhile part of the smartphone market. The wheat, not the chaff, if you will. Samsung et al. can have the bottom of the barrel.

If Apple needs iPhones with larger screens – and they do, because in some places, quality customers are still somewhat economically challenged and therefore try to do it all with a phone versus owning an iPhone and an iPad and in every market healthy percentages of quality customers simply prefer more screen real estate – then Apple should release iPhones with larger screens ASAP.

Apple is late on this, but there is still time to recover. Release the Kraken, Apple!

26 Comments

    1. I agree 100%.

      To me it’s a phone first with the all the myriad other capabilities and functions second, third, fourth, and so forth. I want something that I can slip into my shirt pocket and not have it weigh that pocket down or stick out the top.

    2. Exactly! It’s going to be up to individuals as to what is too large or too small. But there’s a limit where it becomes a two-handed device. That’s the point where it is no longer a phone. It’s a tablet, no matter what you call it. ‘Phablet’? I don’t think so.

  1. I’ve been watching Bloomberg via AppleTV all week, along with all their CES pieces, and reading their website. There is a constant flow of “Apple is broken Samsung is Best” material on all of the above.

    One piece that was particularly ridiculous was about Samsung’s upcoming eye tracking user interface for phones and tablets being proof that they were more innovative than Apple. There was nothing to demonstrate.

    They went on about how all the tech bloggers were carrying Android devices at CES and not iPhones.

    1. What did you expect from bloomberg? Slanted financial news to make money for their friends in the ends. I would not be surprised if Bloomberg himself starts to ban phones that weigh more than 16 oz.

    2. There was a predictable amount of posturing going on. There was an over arching yawn factor. After two days I was drawn to the casinos, where my luck proved to be much better.

    3. This paragraph I just found over @ Seeking Alpha. The BS is getting DEEP & we are only half way through January in 14. The FUD just never ceases from these Bozos.

      “A lot of the Apple products are sold as “status symbols” rather than being superior to rival products. Given that technology trends are fickle, I think it might make sense to avoid Apple for now given strong risks and possibility of a big downside.”

      UTTER BULLSHIT

  2. I wouldn’t mind a 5 inch screen. I can operate my HTC ONE, with one hand. The 4.7 inch display is quite nice, I won’t deny it, but I’m not going to abandon the Apple ecosystem for a few tenths of an inch. Still I’ve witnessed many people making decisions on what phone to buy based on single issues like Swype, appearance, and wanting to look hip.

  3. Unless they asked every subscriber on China Mobile if they preferred smartphones with larger screens I would take what was said with a grain of salt. I just figure the Chinese consumer is buying whatever is available or what someone is trying to sell them. I would also think it would depend on what they were going to use the smartphone for. I honestly don’t think China Mobile would have entered into an agreement knowing that consumers wouldn’t buy iPhones because the displays are too small. I believe Chinese consumers buy iPhones for reasons other that sheer display size. Anyway, I’ll just wait and see who’s right. Besides, if Apple does introduce an iPhone with a larger display later in the year, then Apple will have that covered to some degree unless Apple is going to charge a lot more for it.

  4. Is it not somewhat difficult to produce a larger screen for the iPhone because the new dimensions would make it hard for all of the legacy apps to automatically adjust to the new screen aspect ratio, altered dimensions, etc.? I think with the iPad mini for example, they were able to scale down the screen size precisely proportionally, and therefore not force all of the legacy apps to be re-configured from scratch to fit. I’m sure Apple has been studying the import and all of the ramifications of a larger screen for years and they know what they are doing, but I have long thought that this is one (of the several) reasons they may not have rushed this into production too fast. I’m sure Apple desires to eschew fragmentation of its ecosystem like Android is so often accused of. Also, I am sure they want to keep the developers in the fold by not making their jobs any harder than it already is (by fragmenting the app store.) Can we hear from some engineers or app developers on this point?

    1. Apple already has a small amount of fragmentation in display formats for the iPhone and iPad. Disregarding the older “non-retina” devices (original iPhone, iPad, and iPod touch) that are no longer produced, Apple currently ships:

      – iPod touch: 1136 x 640 pixels at 326 ppi, 16:9 aspect ratio
      – iPhone 4s: 960×640 pixels at 326 ppi, 3:2 aspect ratio
      – iPhone 5s/5c: 1136 x 640 pixels at 326 ppi, 16:9 aspect ratio

      iPads (all 4:3 aspect ratio)
      – iPad 2 (non-retina): 1024×768 pixels at 132 ppi
      – iPad mini (non-retina): 1024×768 pixels at 163 ppi
      – iPad Air: 2048×1536 pixels at 326 ppi at 264 ppi
      – iPad mini (retina): 2048×1536 pixels at 326 ppi

      Apple could easily develop a larger iPhone by scaling the iPhone 5s (16:9) display proportionately and maintaining the same number of vertical and horizontal pixels. This would have the drawback of reducing display resolution (ppi). But it would have the significant advantage of seamlessly running all of the apps currently available for the iPhone 5s/5c/5 (and 4s apps with black bars).

      Apple could try to adapt the iPad retina display approach for a larger iPhone. However, that would pack a lot of pixels into a small display. Also, the 4:3 aspect ratio of the iPad would not work well on the iPhone.

      If Apple wants to retain legitimate “retina” branding for mid-sized iOS devices (5″ to 7″ diagonal), then it will likely have to branch into another 16:9 or similarly vertically stretched display format for mid-size displays.

  5. Ask a 3 year old would iPod dominate the mp3 market with just one form factor?

    Want to see the real deal, get on the subway in Hong Kong and count how many would be iphone users now happily tapping their life away with their Samsung S3,4, note2, note3, mega…

    Only die-hard fans like me stay with 4″ phone, and my eyes are screaming…please Mr. Tim Cook, how long more i have to wait???

    Give us the freedom to choice!

    1. Cook is sleeping on the job. He’s deluded if he thinks people in China are even a tiny bit interested in a tiny 4″ screen phone. People have moved on to larger screen phones – as usual Apple is behind the curve again without Steve Jobs’ guiding hand.

      1. So you do remember that the past and current screen sizes were set by Steve right….. even touted, very vocally by him … so hows continuing with Steves original plan put; “Apple behind the curve again without Steve Jobs’ guiding hand.”?

        Apple makes more in the sale of just iPhones than any three other companies combined, so it would seem that thier strategy seems to work.

        ….. get out and do better yourself… if you can……

        1. zscurvydogz, your comment is spot on. I am really weary of comments coming from people who’s delusional point of view is that Steve Jobs single handedly made every thing Apple come to fruition. Let’s face it. He was a visionary. He new where to take Apple and what direction it should go. But that has been established and these directives have not changed. The creative minds of Apple are still there. So what is the problem?

  6. I don’t presume to know what everybody wants, but I am personally happy with the size and fit of my iPhone 5. If apple had a bigger screen model as a choice, I would still stick with the iPhone 5 size. It works very well for my needs. Now that said, I have access to a large 27″ screen 75% of my day, so I realize that I am not within that segment of the market.

  7. MDN editors seem the get frequently bogged down by semantics. Call it what you like, Apple would clearly like to sell a lot more iPhones in China. MDN editors would do well to stop trying to control how people describe things. Frank Luntz must be their hero.

    1. I completely agree, Thomas. I generally agree with most of the MDN Takes, and most of this Take is fine as-is. But this part of the Take is a bit flawed in its zeal:

      MDN Take
      “Are they? Is that really what Apple’s is trying to do, increase share? That runs contrary to everything Tim Cook says, so, somehow, we doubt it.”

      The truth is that Apple is trying to sell more units and, if possible, increase market share at the same time. Apple wants to increase profits and keep the iOS ecosystem vibrant and relevant.

      What Apple management has repeatedly said and demonstrated is that they will *not* go after market share at the expense of profits or product quality, functionality, user experience, etc. – the aspects that make Apple products so desirable. Apple will not produce junk or slash margins for the sake of market share. But, as a for-profit corporation, Apple is always seeking to grow unit sales, revenues, and profits. That can happen to a limited extent without increasing market share through growth in the market segment. But smartphones have already taken over the majority of cell phone unit sales, and the world’s population can only grow so fast (hopefully, it will stop growing and start shrinking, soon). In a mature market segment, increased unit sales implies increased market share.

  8. Just another heaping, helping of steaming pile of horse manure dished up by Apple haters that exist AND are paid to produce heaping, piled higher helpings of horse manure about Apple by Samsung, Bloomberg and others in the finance world… Just like the right-wing hate machine… don’t feed it and it WILL shrivel up and blow away…

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