Is Apple fighting a losing battle in China?

In the smartphone market, Apple is playing catch up with Samsung in China, the world’s biggest mobile phone market.
Written by Liu Jiayi, Contributor

HONG KONG –The long overnight queue outside Apple’s Central flagship store in Hong Kong disappears almost as quickly as it was built up. Now you can easily buy new iPads in a mall -- if you are willing to pay US$100 for a bunch of Apple accessories and a pad that looks the same, but only hotter, heavier, and with shorter battery life.

Since it was first launched in early March, the new iPad hasn’t been doing a good job in persuading the customer to pay US$500 to upgrade their old models. All kinds of critiques started to kick in: few apps and games optimized for the A5X CPU and quad-core graphics, the body’s heating issue, charging problems, so on and so forth.

Bigger resolution on a same-size Retina screen and a 5-megapixels build-in camera don’t seem to be this generation’s selling point, nor does the “Ultrafast” 4G LTE connection, since China, Apple’s second biggest market, is still working on its 4G infrastructure. Fans in Hong Kong are also disappointed, as the new iPad there doesn’t support the local 4G network.

But thanks to the sluggish Windows 8 and chaotic Android, iPad’s share is expected to rise to 60%, according to a report issued by iSuppli and Deutsche Bank in March.

After Tim Cook took over Apple from the legendary Steve Jobs last August, the challenge for Apple has been how to maintain the momentum and keep on redefining people’s digital life. But it seems that the successors of first generation iPhone and iPad are anything but revolutionary.

In the smartphone market, Apple is playing catch up with Samsung in China, the world’s biggest mobile phone market. Samsung’s share is three times bigger than Apple’s and growing, according to a recent Gartner report. Apple’s marriage with China’s second- and third-largest carriers, China Unicom and China Telecom, can’t give it an edge in competing with Samsung’s partnership-with-all-carriers strategy.

“Having access to more subscribers gives vendors like Samsung an advantage,” said Beijing-based analyst Teck Zhung Wong in a talk with Bloomberg, “If Apple is going to continue to grow in the Chinese market, it has to consider very seriously a handset with China Mobile.”

China Mobile has over 655 million subscribers, an equivalent to the population of the US and Canada combined.

These are not the only monkeys that are on Apple’s back. Fair Labor Association recently released a report urging Foxconn Electronics, Apple’s biggest supplier, to improve the working conditions, employee welfare, and its labor union system. The ongoing trademark dispute between Apple and Proview, a Shenzhen-based company which originally registered the ‘IPAD’ trademark, largely hinders the iPad sale in China.

All of these cast doubts upon the future of Apple in China. Whether it can emerge on top of the war with other big players like Samsung, or with small but annoying ones like Proview, or fight against itself, trying to carry the legend of Jobs as one of the most innovative companies in the world. Only time can tell.

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