Roger Fingas
Apple's decline in Chinese iPhone shipments during 2016 can be blamed on the company refusing to adapt its tactics to the local market out of fear of risking its business elsewhere, according to Duan Yongping, the founder of Chinese smartphone brands Oppo and Vivo.
Apple is for instance unwilling to pair lower prices with high-end features, Duan suggested in a Bloomberg interview. Without an installment plan an iPhone 7 starts at 5,388 yuan in China, or about $780, potentially as much as a person's monthly wages. Even an iPhone SE is 3,288 yuan, or some $476.
"Apple couldn't beat us in China because even they have flaws," said Duan. "They're maybe too stubborn sometimes. They made a lot of great things, like their operating system, but we surpass them in other areas."
Despite competing with Apple, Duan is actually a major Apple investor and a fan of CEO Tim Cook, with whom he claims to have met several times. Apple couldn't confirm any meetings between the pair.
Duan lives in Palo Alto, Calif., just a short drive from the new Apple Park campus in Cupertino.
During 2016 Apple slipped out of the top three smartphone brands in China to land in fifth. Huawei claimed the top spot, while Oppo and Vivo took second and third. Xiaomi claimed fourth, even though it was also hit with declining sales.
Apple is known to insist on high profit margins for the iPhone, in fact claiming the lion's share of profits in the smartphone industry. While the strategy has been succesful overall, it has also hindered the iPhone's entry into markets like China and India, where high prices can easily put it out of reach for the average person.
Oppo is hoping to entrench itself in India before Apple can achieve any substantial foothold, Bloomberg said. The latter company controls a tiny share of the Indian smartphone market, and is working to improve its lot with things like more resellers and local manufacturing. For years it has even resorted to selling cheap iPhones that are outdated in other regions — most recently, it launched a 32 gigabyte version of the iPhone 6.
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33 Comments
"We love Apple and look forward to them taking the lion's share of our country's market"...Said no Apple competitor ever.
Easy for companies which rely on intellectual property infringements to create their cheap phones to say.
I don't get it. The founder of two cheap Chinese phone brands lives in the US? Go figure.
These companies would love for Apple to appear to 'adapt', as then they would be seen as true competition. But for the market that Apple is currently interested in, they are really not, not even close. Until such point that Apple can no longer command the high end and take most of the profit in this sector, I think they will (and should) stay on the present course and ignore the Oppo, Vivo and Dittos.
Quotes... "Apple is for instance unwilling to pair lower prices with high-end features" and "They made a lot of great things, like their operating system, but we surpass them in other areas."
Ah yes... you are fastest in the race to the bottom!