This article will discuss why Samsung beats Apple in China. In China Samsung smartphones sell much better and more that Apple iPhones. This article will analysis why this happens. Previously, Apple CEO Tim Cook thought, “over time” China will give Apple a huge opportunity. But now the “Time” seems to stand on the Samsung’s side.
Apple said this week that third-quarter revenue in Greater China fell 43 percent compared with the second quarter to $4.65 billion, decreasing by 14% over the previous year. Why Apple’s revenue in Greater China declined mainly due to the regional sales plummeted in Hong Kong. Cook said, “At present, the exact cause is unknown.”
It is not entirely clear how Apple copes with Samsung and many mobile phone manufacturers in China yet.
In the battle for market share in China, Samsung beats Apple. Market-research firm IDC’s data shows that Samsung smartphone occupies 19% of the market out of $80 billion in China. In 2017 China’s smartphone market will expand to $117 billion. Apple’s smartphone market share in China is 10 percentage points less than the Samsung’s, only being the fifth-largest smartphone vendor.
Samsung stores in China are three times the number of Apple stores and in attracting consumers, cooperation with mobile operators, Samsung is more active. Compared with Lenovo, Huawei, ZTE and other Chinese rivals, Samsung’s situation is more favorable.
Different models provide different choices; Samsung does well in providing different smartphones. The number of Samsung phones on the shelves is 4 times the number of iPhones.
Apple just introduced a model per year, aiming for the high-end market; but Samsung released many models each year with different configurations and prices to suit different customers.
Analysts said Samsung phones have customized functions for Chinese users. For example, many phones in China support two SIM cards while the iPhone only supports one SIM card.
“Chinese users like more functions, they want their phones to have 50 fundamentally irrelevant features. Apple does not pursue such a strategy. Unfortunately, in order to occupy the mainstream mobile phone market in China, manufacturers must provide products that meet customer’s needs. “
Analysts believe that Samsung’s advantage is growing in China, which is the main reason why Apple intends to launch a low-cost iPhone model and large-screen models worldwide.
Samsung’s strategies to challenge Apple do not only include the cheaper smartphones, but also high-priced models.
Samsung and China Telecom jointly launched the “Heart of the World” smartphone with Jackie Chan’s endorsement, pricing about 12,000 RMB. Samsung’s handset division, executive vice president Lee Young-hee said, “China has a large number of high-end users, which helps us aim to the smaller group of users and increase the brand reputation.”
Although such luxury mobile phones’ sales may not be good, cooperation with carriers to develop these phones shows Samsung’s willing to enter the market, to cater to the niche market.IDC analyst TZ Wong said, “Samsung ‘s key strategy is to consistently adapt to the local market.”
1985, Samsung opened its first office in Beijing. Samsung is the pioneer in the market, mainly produced electronic products in China and sold to foreign markets. In contrast, Apple has only recently entered into Chinese market. Therefore, Samsung gained undeniable advantages, Samsung can quickly adapt to changing environments.
In addition to the three carriers, Samsung cooperates with Gome, Suning, as well as many other small retailers in China to set Experience stores.
Apple’s sales channels and Samsung’s are similar, but entering into the Chinese market later means that its retail business scale be smaller. For example, Samsung has more than 200 authorized dealers in Guangdong province; in contrast, Apple only has 95.
Samsung’s former executives Mark Newman said that Samsung’s success in China has its reasons: it does not want repeat the mistakes of Japanese rivals, “Samsung spends a lot of time researching Sony, Toshiba and Panasonic. One of the results is that the isolated strategy is flawed, so Samsung has been vigorously implementing globalization over the past decade. This is particularly evident in China; the number of employees in China is only less than that in Korean.
According to IDC, Currently, Samsung is leading the high-end and low-end smart phone market in China. Due to the relatively lower salary of about $640 per month, many Chinese users who consider upgrading their phones cannot afford an iPhone. In such environment, Samsung phones can cater to users with different purchasing power, which facilitate Samsung to cope with other rivals such as Lenovo, Huawei, etc.
Maybe there are more reasons why Apple was beaten by Samsung in China, leave your comments here to discuss with others.