Two Challenges Apple Faces in Quest to Make China Number One Market
BOSTON, April 30, 2013 /PRNewswire/ -- Earlier this year, Apple's CEO, Tim Cook, affirmed that China will one day overtake the US as the company's number one market. In recent years, Apple has made significant inroads into the Chinese market, however, the iPhone has not been able to effectively tap the mass market for two reasons, according to a new research note from Pyramid Research Associate Analyst Guillermo Hurtado.
Read the full Pyramid Point here.
"First, the iPhone is too expensive for the average Chinese consumer," says Hurtado. While the smartphone ASP in China stood at $204 in 2012, all iPhone models are currently priced above $400. Second, Apple has not been able to finalize a deal with government-owned operator China Mobile, which as of the end of 2012 had more than 717m mobile subscriptions, making it by far the largest operator in the country. Revenue sharing disagreements and incompatible networks have reportedly held back China Mobile from carrying the iPhone. As a result, the mobile operator has been losing market share to China Telecom and China Unicom, which do carry the iPhone. "In light of its current situation, Apple has a difficult task ahead of it is to make China its number one iPhone market," he adds.
Read more about what Apple can do to make China its number one market here.
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SOURCE Pyramid Research