After much debate with Chinese regulators, Apple announced this morning the iPhone 6 will go on sale in China beginning October 17th. Although Apple initially planned to release the new iPhone in China on September 19th, the same date as when it went on sale in the U.S. and Hong Kong, privacy concerns from China’s Ministry of Industry and Information Technology forced the one-month delay.
Chinese regulators worried Apple’s iPhone contained backdoors “through which U.S. agencies can access users’ data” (Reuters). This does not mark the first time China has publicly questioned the notion of these backdoors, as earlier this summer China’s state run media echoed these same concerns. However, now that Apple has appeased the regulators and quelled these concerns, Apple is aiming to expand its footprint in the worlds largest smartphone market (Reuters). Apple does not have the same name and clout in China as it does in the United States, as it faces stiff competition from both Chinese manufacturers in addition to other foreign competitors.
Chinese smartphone companies such as Xiamo Inc. and Huawei Technologies Co. offer comparable features on their phones at a substantially lower cost. According to Counterpoint, a technology market research firm Apple only had a 10% market share of the smartphone market in China during Q1 2014 and “ranked No. 6 in China’s smartphone market in the second quarter, with a market share of 6.5%” (Wall Street Journal). However, the iPhone 6 will be available on the 3 largest mobile carriers in China. It will be interesting to see if China is able to increase their market share and compete with cheaper brands when the phone hits the open market.
Photo Obtained:http://www.counterpointresearch.com/q12014marketmonitorchina
Sources:
Counterpoint,
Reuters and WSJ
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Other than brand name, how much advantage is there to an iPhone if you’re not an Apple computer owner? See a short post I made on the larger smart phone market. I note prices in it, but don’t know what an iPhone costs in China.
It will be difficult for apple to increase their market share in such a price conscious market. It seems as though they would have more success through developing a budget model exclusively for China. It will also be interesting to see if issues such as the NSA continue to affect trade with China or if the country’s initial resistance was more of a statement than an actual concern.