There’s a lot to process in this 110 slide presentation on Apple’s China business. At its core, China is placing restrictions that are breaking the stickiness of Apple’s ecosystem.
From the China Channel presentation:
TO MOST CHINESE IPHONE USERS THE IPHONE IS JUST A LUXURY PHONE. THEY HAVE NO SIGNIFICANT INVESTMENT IN APPLE’S SERVICES ECOSYSTEM
And:
APPLE’S CHINA SERVICE ECOSYSTEM HAS BEEN SYSTEMATICALLY STRIPPED AWAY BY LOCAL COMPETITORS
And:
FROM APRIL 2016 IBOOKS AND ITUNES STORE HAVE BEEN BLOCKED IN CHINA. CHINESE AUTHORITIES ORDERED THEM TO BE TAKEN OFFLINE.
In most markets, Apple can depend on ecosystem loyalty. Most iPhone users would never even think of shifting over to an Android device. There’s brand loyalty, for sure, but there’s also ecosystem stickiness at work here. My photos, music, documents, etc., are all on my Apple devices, and I already have a great deal of expertise in using all this data, moving around the ecosystem. There’s little incentive to shifting over to Android.
According to this presentation, the Apple ecosystem stickiness is broken. For example, iMessage is hardly used in China. China is dominated by Android devices, iMessage is Apple device specific, spam is a huge issue, and WeChat is an entrenched tech in China, making it hard for iMessage to gain a foothold.
Can Apple overcome these obstacles? No doubt. But understanding the problems and retooling to overcome them is key.
“Can Apple overcome these obstacles? No doubt.”
I assume you’re emphasizing that they can overcome the problems, not that they necessarily will.
Governmental interference, market conditions, and strong competition all make for a very challenging landscape, particularly for a company like Apple, which does tend to rely on consumers buying (and essentially locking themselves — with good reason) into their ecosystem.
Wow, slides.
Anyway, I don’t know about anyone else here, but this is not alarming nor surprising to me. At all.
In China, the more Apple succeeds, the more China will strip away Apple’s advantages and privileges.
But neither one can live without the other—at the moment.
The Chinese are our enemies.
This is the capitalism our current administration no doubt would like to get to. They get to control what we know, and what we can do about it. China has little problem controlling the exchange of information. I imagine it’s hard to be Apple and thrive in China.
As for the fashionable part, it’s now China’s middle class who love the status symbol items, such as clothes with logos, phones, etc. The wealthiest in China eschew such logo-oriented trappings. When I was in China I saw it happening. The millionaires I was in contact with did not display their consumption on their sleeves. The middle class on the other hand looked like walking ads.
As long as you don’t threaten power in any way, you’ll do fine pushing facile coolness.
Not counting current US leadership I see.
“Can Apple overcome these obstacles?”
I highly doubt it. WeChat is the king in China.