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
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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