Over the past year, iPhone sales in China have dipped some, but the company may gain ground with a licensing deal from China’s largest mobile carrier.
According to Mashable, China Mobile—China’s largest carrier—plans to offer the iPhone on its network. It’s a coup for Apple, considering that China Mobile has some 700 million customers—a large piece of the market that Apple has been trying to break into for a while.
In the last year or so, Apple’s sales have dropped slightly in China. Reuters is reporting that Greater China accounted for 19 percent of Apple’s sales in the first quarter, then fell to 13 percent in the second.
Although that hasn’t bothered Apple CEO Tim Cook, who sees China as a long-term project.
“In the arc of time, China is a huge opportunity for Apple,” Cook told National Public Radio. “And I don’t get discouraged over a 90-day kind of cycle.”
In fact, both Apple and Samsung are seeing stiff competition coming from Chinese manufacturers that are building cheaper phones that do more, according to Business Insider.
While Samsung, Apple, Sony and other foreign brands focus on China’s high-end mobile phone market, Chinese brands selling cheaper handsets are taking over the middle range of the market.
From Business Insider:
We think local brands will take share away from Samsung in the middle range market and its smartphone will soon lose its No.1 position in the China smartphone market. We think Lenovo and Huawei will become the No.1 and No.2 players in China.
At the moment, Apple’s handsets are only available on China’s two smaller carriers, China Unicorn and China Telecom Corporation, both of which are “dwarfed” by China Mobile, according to Bloomberg.
With its new iPhone 5C (the cheaper iPhone), Apple seems to be trying to recoup some of the market share lost to the rising Chinese brands and Samsung. The company even introduced the new phones at an event in Beijing, which marks the first time Apple has included Mainland China in its global product release events, according to Bloomberg.
However, there’s a question of whether the 5C is still too expensive for the market.
The 5C will start at 4,488 yuan ($733) and compete with handsets sold for as little as $100 that helped erode Apple’s market share to 5 percent in the second quarter from about 9 percent a year earlier.
“It’s not cheap enough,” Hong Kong-based HSBC analyst Tucker Grinnan told Bloomberg. “We are disappointed with the price point. It is a high-end phone in China.”
So, is it two steps forward and one back for Apple in China?