Apple with its iPhone may hold a dominant market share along with Samsung around the world and especially in the United States. However, enter China and you will find how the two global behemoths lack the punch to challenge the might of the local players leaving them completely vanquished.
In the biggest Smartphone market in the world, Apple and Samsung has found it difficult to find a foothold among the array of local players. Chances are that outside China, brands such as Oppo or Coolpad may not be even recognizable or heard. However, these brands and their offerings have found greater acceptance with the Chinese than iPhone.
With an estimated shipment of close to 354 million Smartphone handsets, China far outpaces any other market in the world including the United States with its measly 139 million handset sales. The forecast for 2014 for the Chinese market stands at 422 million. The current sales trend and the estimate predicted is an indication of the potential behind the humongous growth that is available for the local brands offering competitive products.
There are various reason associated with the success of the local brands in China. This includes capabilities to build hardware with advanced features at a highly competitive cost beating Apple and Samsung in its own Chinese vendor backyard. These local players have also mastered the art of a building a strong social media presence though effective marketing and online forums.
With great finesse, the homegrown brands have quietly slipped into the fantasy of Chinese Smartphone market. It is definitely an interesting case to study and research into how insignificant players in the market left Apple iPhone vanquished and capitalized on its weakness by packing local models with the punch that iPhone lacked in its features and selling techniques.
Ironically, they have done nothing special other than indulge in some smart marketing patterns to outperform both Apple and Samsung in many segments. It also helps that in the biggest handset market in the world, every local player offering a competitive product will be able to generate substantial revenue. This revenue once ploughed back into R&D helps them in introducing products with advanced features with a wide variety of designs capturing the attention of the users.
It should be recognized that China’ s local market enables domestic players to sell more handsets than their global counterparts. Coolpad ranks third in the Chinese market with 11 percent market share trailing behind Samsung (21 percent) and Lenovo (13 percent). Apple stand relegated to the fifth position with a market share of only 6 percent.
This is set to change as Apple is expecting a turn in its fortunes with the recent partnering effort with China Mobile. Tim Cook, CEO Apple, has already announced that Apple has experienced “the best week for activations we’ve ever had in China.” However, the cost of owning an iPhone with its pricier contracts will prove a deterrent to a large-scale shift to the premium model.
Local brands have also prospered with the strong relationship standards that they have been able to maintain with Chinese carriers. This was one of the reasons for Apple to forge a collaborative association with China Mobile to market and sell its products though the network of China’s leading operator. A similar collaboration can also be found in Japan when Apple joined hands with NTT Docomo, a leader in the Japanese mobile network space.
The result of these synergistic relationships with will be revealed by the end of this financial year when the fourth quarter results emerge for Apple. Meanwhile, Apple should work towards strategies that would reverse its fortune from the current vanquished state. It is time to follow Steve Jobs to Think Different and re-discover how Apple can bring-in the punch it lacks to impress the Chinese.
By Daris Abraham
The Wall Street Journal