China's Phone Makers Must Work Hard to Take Advantage of Apple's Sales Slump
Xu Wei
DATE:  Jun 28 2017
/ SOURCE:  Yicai
China's Phone Makers Must Work Hard to Take Advantage of Apple's Sales Slump China's Phone Makers Must Work Hard to Take Advantage of Apple's Sales Slump

(Yicai Global) June 28 -- Apple Inc.'s [NASDAQ:AAPL] China sales have been stunted by the company's removal of tens of thousands of Chinese applications from its App Store, but domestically-produced smartphones will have to work hard to take advantage of the opening, state-run Xinhua news agency reported on June 27.

Successive moves from Apple this month concerning apps have triggered a dispute within the industry. The Cupertino-based tech giant pulled more than 40,000 Chinese applications from its App Store, and China-bound iPhone sales have continued their slump.

China was the only market with an income dip among Apple's major global markets, per the firm's financial results for its fiscal 2017 second quarter ended April 1, 2017. Apple witnessed a decline in operational revenue on the Chinese market for five straight quarters.

Tim Cook has made 11 trips to China as Apple's chief executive, and has worked to improve the company's position on the Chinese market. Apple has yet to complete its China acclimatization and has made insufficient localization efforts.

Its domestic counterparts have an opportunity. A new landscape dominated by three Chinese brands -- Huawei Technologies Co., Oppo Electronics Corp. and Vivo Electronics Corp. -- has emerged, per a smartphone market report jointly released by Weibo Corp. [NASDAQ:WB] and market research company Sino Market Research Ltd.

The sales morass Apple is mired in seems to be a good opportunity for those domestic players to consolidate their lead, but this cannot be achieved overnight amid their pronounced shortcomings.

Chinese smartphone makers follow others in developing key components and remain dependent on big international plants. Industry giants such as Apple have strong control over the upper supply-chain resources, giving them competitive power in this regard. Against such a backdrop, China's brands are slated to take an unprecedented supply chain hit this year.

Chinese firms lack patent reserves and are disadvantaged by their weak foundation, and their handsets use customized Android-based operating systems. Domestic enterprises have room to improve their products and marketing if they hope to join the ranks of Apple on the global market.

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Keywords:   Mobile Phone,Apple,HUAWEI,OPPO,Vivo,TECHNOLOGY