“Eight years ago, Tim Cook, then Apple’s chief operating officer, was so bullish on the performance of the company’s stores in China he told analysts its four retail locations in the country—one of which sat beneath a glittering 40-foot tall shaft of glass in Shanghai’s ritzy Pudong district—were generating more revenue than most others in the world. By the end of 2011, company executives predicted, Apple would have as many as 25 stores in China,” Wayne Ma reports for The Information.”
“Instead, Apple missed that goal by four years, hampered by China’s byzantine government bureaucracy and inventive forms of retail fraud as well as other dubious tactics for which it was unprepared,” Ma reports. “After finally hitting its stride with a total of 26 store openings in 2015 and 2016, Apple has slammed the brakes on its retail expansion in China, launching only four new locations in the country since then, according to an analysis by The Information.”
Ma reports, “The primary reason, according to former Apple employees, is that some stores have fallen short of expectations, especially in China’s smaller cities.”
Read more in the full article here.
MacDailyNews Take: Basically, Apple faces myriad issue, from understimating the regulatory nightmare in China, to scalpers, to competition from resellers, to scams such as “returning shrink-wrapped boxes that were actually filled with pieces of bricks and other item,” among many ther issues.
I remember how China was begging to get some Apple retail stores and now those same people have basically turned their backs on Apple. I completely understand Chinese citizens wanting to buy their own domestic brands to show their loyalty but they shouldn’t have been asking for Apple stores in the first place. Anyway, China is still a BRIC nation and that means Android dominates by a huge amount. Not that Google is benefiting much as many of those Android smartphones aren’t running Google Services and that must hurt Google quite a bit.
Ah, well… Apple wants to keep pricing themselves out of the mid-range market so it’s to be expected that the average Chinese citizen isn’t going to be purchasing iPhones or any other Apple products for that matter. Still, isn’t China just about Apple’s biggest market? Android smartphones are simply giving Apple the bum’s rush and there’s nothing Apple is willing to do anything about. That country is saturated with Chinese-made Android smartphones and Chinese citizens are not going to stop buying them.
I expect more of these articles as we’re rapidly approaching earnings season. The news media has to make sure big investors start worrying about Apple’s iPhone business in China going down the toilet. Apple will still be making quite a bit of revenue, so I’m not going to sweat it as there’s increased ASPs and services revenue to balance out iPhone unit sales decreases.
Apple should exit communist China completely and let King Xi get on with the job of subjugating his people. By staying in any form, Apple is complicit with state sponsored theft, kidnapping and murder on an industrial scale.