Apple’s China Struggle

Bloomberg said last week that two firms in China have upset the Apple (smartphone) cart as of late, having garnered attention and market share in that country.

The two firms have been challenging Apple and Samsung for users in China, targeting local stores that “dominate sales in China’s far-flung provinces.” The pair has garnered one out of every three smartphones sold in China in the third quarter, said the newswire, with the iPhone take at 7 percent of the market, its worst showing in three years.

The targeting of rural customers, said Bloomberg, means that Oppo and Vivo have been able to garner attention and yuan beyond the cities and also share profits with those local store owners, a strategy that Jin Di, an analyst with IDC, told Bloomberg was, and is, responsible for “an extremely active and loyal nationwide sales network.”

That may signal concern for Apple, where a large part of growth, and fast growth at that, came from China. Apple grabbed $59 billion in sales from China in its last full fiscal year, double the tally seen two years previously. Then, Apple had some snafus in the region tied to certain products being blocked from the country. At the same time, cheaper alternatives, such as Oppo and Vivo, gained traction. In the third quarter, those two firms shipped 40 million phones, which equated to 34 percent of the devices sold in the Chinese market. Those sales overwhelmingly came from physical retail locations, numbering in the hundreds of thousands, while Apple has a few dozen stores in China and has another 40,000 locations where its iPhones are sold.


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