Tim Cook to Visit China Following Losses and iTunes Movies and iBooks Shutdown

Tim Cook to Visit China Following Losses and iTunes Movies and iBooks Shutdown
May 12, 2016 Translated by eChinacities.com

Editor's Note: American tech companies have met certain "setbacks" in China, namely Alphabet, Inc.'s Google services and Facebook being completely blocked by the Great Firewall. And recently Apple's iTunes movies and iBooks were shutdown overnight. Mark Zuckerberg and Tim Cook have put on their diplomacy hats, or maybe diplomacy running shoes, in order to discuss how to offer their products and services to China that the government is ok with. Tim Cook's visit coincides with a 25% decline in business last quarter. This translated article reports on Apple's recent challenges in China.

Apple CEO Tim Cook has already visited China seven times, and will visit again in the end of May. The main purpose for his next visit will be to have a dialogue with the Chinese government.

Last month, Apple had one of its worst quarters in the past 13 years. Revenues dropped 13% compared to the same period last year. iPhone sales are on the decline worldwide and Apple sales have fallen in China—the company’s second largest market.

Revenues from Services, Not Hardware
In the past few weeks, Apple has had other problems in China as well. The company’s iTunes movies and iBooks were suddenly shut down within Mainland China. As of the third week of April, the two stores were completely inaccessible within Mainland China.

Last quarter, Apple’s overall revenue took a hit, but service products like Apple Pay and Apple Music raked in $5.91 billion for the company. This is an increase of 20% from last year in service revenues. The number of paid Apple Music subscribers increased by 200 million in the last two months.

While services are booming, growth has slowed down for Apple’s hardware products. Revenues are higher from music, movies, apps, books and mobile payments. In addition, Apple’s investors are concerned over China’s shutdown of iTunes movies and iBooks.

Chinese Customers Not Impressed by iPhone 6s
Cook has said that investors should not “overreact.” However, Apple’s stock prices have fallen nearly 20% over the past month.

Apple sales in the Greater China region fell by 26% this past quarter. Cook addressed these numbers in an interview last week with CNBC. He said that in the past two years, the Chinese market has grown by 70% and that he is optimistic about the company’s future prospects in China.

Chinese customers were not excited by the iPhone 6s and 6s Plus that were released in September. The phones were very similar to the previous generation iPhone 6 and 6 Plus. The new iPhone SE, a revised version of the 6s, has not done well with Chinese customers either.

Challenges in the Chinese Market
Apple Music and the App Store have had issues in China as well. The apps have experienced bugs and users occasionally have trouble downloading them. However, at least the services are still accessible.

Cook promised in his CNBC interview that iTunes movies and iBooks will be back and accessible in China. However, there may be special China versions that will go up to replace the originals.

It seems that Apple is facing more and more challenges in China, especially as the company’s dependence on the Chinese market increases. There are still many issues Apple must tackle in the future and some of these problems will not be easy to solve。

Source: QQ News

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Keywords: Apple China Apple shutdown losses

12 Comments

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1

ahopkins767
comment|71049|102175

Maybe I have a different idea of Market-skimming to you. My bad.

May 18, 2016 13:51 Report Abuse

2

naveed_8989
comment|70947|1625168

Today's launching of world cheapest mobile phone of 360 n4 (4GB Ram, 32Gb Rom) only priced 900RMB will decrease the sales of I-Phone

May 13, 2016 18:47 Report Abuse

3

Lord_hanson
comment|70948|279026

Not really, people buy iphones because they are expensive, expensive = face. The people who buy cheaper phones buy Xiaomi. Xiaomi will lose money but not Apple.

May 13, 2016 18:51 Report Abuse

4

naveed_8989
comment|70973|1625168

Xiaomi is also facing competition in the low priced market with Meizu and 360. New mobile by 360, named n4 is short in the market after releasing. As far as , I-Phone is also thinking to change the policy of market skimming pricing.

May 15, 2016 15:02 Report Abuse

5

ahopkins767
comment|71017|102175

I-phone is a product made by Apple, and Apple won't do market skimming. They make premium products and price accordingly, with no discounts.

May 17, 2016 16:05 Report Abuse

6

naveed_8989
comment|71023|1625168

I-Phone is already having market skimming pricing that includes premium pricing in start to capture the market share.

May 17, 2016 16:53 Report Abuse

7

Guest2239322
comment|70936|248813

Chinese are greedy so they want chinese phones to be adventagous in china. Nobody cares for copyright in china.Cook should prepare some money to share....

May 13, 2016 10:36 Report Abuse

8

Guest388182
comment|70924|43131

bent over and bleeding from behind, Cook cried "sales, please!"

May 13, 2016 03:16 Report Abuse

9

kuntmans
comment|70915|307009

Adapt or die. It's not a western society.

May 12, 2016 16:52 Report Abuse

10

RandomGuy
comment|70917|1589639

Western companies can also withdraw from China altogether sending their factories to India or Bangladesh instead and let you starve to death. I wonder how long China will survive without FDI and manufacturing demand to provide jobs for the nongs. Chinese people will still buy their brand new iPhone in import even if it's made in Bangladesh and not distributed in China, but rest assured that no one will buy Huawei, Xiaomi or Oppo outside the Middle Guo.

May 12, 2016 17:54 Report Abuse

11

Lord_hanson
comment|70912|279026

I bet he will still be kowtowing even after they deliberately reduce his companies competitiveness.

May 12, 2016 15:49 Report Abuse

12

dom87
comment|70909|102513

better take some lube to the meeting still didn't learn that china's market is not fair for international companies. It doesn't matter how big the companies are, they will get fucked over eventually

May 12, 2016 12:32 Report Abuse