Mainland China has 243 million iPhone users. But seriously, how many of those iPhone users could really afford the latest iPhone Xs?
As perhaps the founding company of smartphone, iPhone’s reputation has been great in mainland China. For many iPhone users, having a smart device made by Apple Inc. is not only about having a smartphone, but also a sign of high caliber of taste and choices. Despite the fact that smartphone devices become more and more prevalent in China, iPhone series remains the most prestigious and recognized brand among the Chinese smartphone brands.
However, the latest versions of iPhones seem to be out of the budget lines for many smartphone lovers. With an amazingly high price of ¥10,999 ($1249) for a 256GB iPhone Xs Max with a 6.5-inch display, it is certainly a product that’s not affordable to the general public: the worth is, frankly, three-month salaries of some Chinese working professionals.
Perhaps it is worthy of investing that money into a first-hand experience on the latest trends in smartphone devices, but it only took six days for some iPhone lovers to find out that third-party sellers are offering a discount. Depreciating ¥600 in merely six days, the products start to make people doubt the cost of pursuing the latest versions: With a fast depreciation like this, smartphone users may find themselves better off with other brands or devices.
It is certainly outstanding and innovative to have new features on the latest Apple products. But when changes are overly huge and dramatic, they might trigger negative feedbacks from loyal users whose favourite features got removed.
The latest iPhone Xs had some huge changes that may not be appreciated or liked by all iPhone users. For instance, previous iPhone users were not used to a device with no home button. The removal made it impossible for some users to use Touch ID to unlock phones and initiate mobile payments.
The phone also invests heavily in promoting its newly developed Face ID system. However, with privacy being a serious concern for most smart device users, the wide application of Face ID may be a huge turn-away for long-time iPhone users.
Statistics results have shown signs of iPhone’s decline. According to a report by International Data Corporation, iPhone’s market share in China dropped by 12.5 percent in the second quarter of 2018. iPhone is losing out to brands such as Huawei in the Chinese market. Benefited from strong numbers of sales, Huawei secured around 27.2 percent of the Chinese market. Another Chinese local brand, OPPO, also performed well by taking about 20.2% of the Chinese market share.
In addition, the shifting Chinese market does not seem to help Apple from bouncing back. Goldman Sachs warns that Apple may face larger falls in revenues from China due to a weaker demand in the market. For average Chinese consumers, the decreasing disposable income and rising cost of living are draining the amount of cash available for them to purchase new phones and products.
It is true that for Apple, there is yet to be a strong competitor. But Apple’s dominance does not exclude its products from having issues. Facing pressure from the Chinese government, iPhone users are now required to upload their iCloud data to a server located in Guizhou China. The change in iCloud service has negatively impacted Chinese iPhone users as many started to receive spam messages and random calls. These negative changes may lead future Chinese consumers to switch to other smartphones like Samsung, Huawei, and Xiaomi. iPhone, known for its high-caliber products, is now under serious challenge to maintain a satisfactory user approval rate while facing unpredictable factors from non-market stakeholders.
Apart from all these factors, Chinese consumers might be willing to spend more on smartphone devices that has better quality and designs. But don’t be mistaken, the future of the smartphone markets remains uncertain. For Apple, the Chinese market might turn into a situation similar to that in India one day: users will start to put more emphasis on price and affordability, making iPhone products sales decline.
Different from receiving huge attention and sales revenue in China, iPhone in India shows a vastly different market with lower number of sales in the second most populous country. Indian smartphone buyers are more interested in purchasing cost-efficient, affordable smartphones rather than the prestigious and expensive iPhones.
In addition, Apple products are likely to face more restrictions and taxes in India in the near future. Clearly, Apple did not successfully create an “iPhone culture” where smartphone users have little loyalty to the company’s products in India. Their decisions are mainly driven by market prices and features.
Will Chinese consumers act more like those in the Indian market? It is a question that we do not have a certain answer. However, with more and more former iPhone users complaining about the unaffordable iPhone prices, it is a clear sign that people are not willing to spend that much money on a smartphone that no longer has the spiritual award of owning something superior. With other smartphone devices catch up quickly with Apple products, Apple need to evaluate its strategies on reaching a balance between affordability and innovation for its later smartphone products.