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Apple Opens Shanghai Store Amid iPhone Troubles in China

Apple store in Shanghai

Apple’s new store opened in Shanghai on Thursday (March 21), with Tim Cook in attendance.

The chief executive got “thunderous applause” from the crowd, according to a report by Bloomberg News, which notes that his appearance comes at a precarious time for Apple.

Among the company’s various troubles: a less-than-thunderous response to its flagship iPhone in China recently.

The report quotes Shanghai resident Caesar Xu, a 35-year-old tech worker who attended the opening and said the price of the latest iPhone model is “acceptable” but expensive compared with domestic smartphones.

“Those who love the iPhone will always love the iPhone, but there will be others switching to other brands,” said Xu, who owns both phones from both Apple and Chinese rival Huawei, and argued Huawei offers a better signal and battery life.

Last month saw reports that resellers in China were offering steep markdowns on the newest edition of the iPhone. The phone launched in September but hasn’t sold as well as past versions, due in part to economic pressures and competition from Huawei.

“Apple is catching up with the ‘deflation’ trend in China, intending to boost the demand for iPhones,” IDC analyst Will Wong told Bloomberg.

“Based on IDC’s preliminary January data, the pressure was mainly coming from other Android vendors as we saw Apple decline by around 10% year-on-year in the month while Huawei grew triple-digits over the same period.”

Cook visited China in October and met with Chinese Commerce Minister Wang Wentao. The Chinese government last year issued a ban on iPhone use by government workers and employees of government-owned companies.

The store’s launch came the same day that the U.S. Department of Justice (DOJ) filed an antitrust suit against Apple, accusing the company of monopolizing or attempting to monopolize the market for smartphones.

“Consumers should not have to pay higher prices because companies violate the antitrust laws,” Attorney General Merrick Garland said in a news release.

“We allege that Apple has maintained monopoly power in the smartphone market, not simply by staying ahead of the competition on the merits, but by violating federal antitrust law.”

In a statement provided to PYMNTS, Apple countered that the court action threatens the principles that help its products stand out.

“If successful, it would hinder our ability to create the kind of technology people expect from Apple — where hardware, software, and services intersect,” the company said.