Apple in Greater China Past performance and What the Future

Whenever any USA company  or business man thinks about expanding and diversifying their business outside the USA , the answer comes to mind is China. 1.4 billion people, Developing economy at a very high speed from 400 billion in1990 to almost 17.5 trillion in 2023. American companies see it as a Gold mine but it has been very hard for American companies to crack china. Only a few companies have been able to do this Nike, Starbucks, Apple , KFC , and coca-cola.

China has been very tough for American companies to crack, especially for technology companies. Because the Chinese communist party always protects their local businesses and Chinese are very hard working and very competitive people.

Once we talk about their general public they are very loyal to their local companies unless the product is too good from the outside company. But the Chinese people also believe in status symbols, the things that enhance their value in the society, are important to them.

So, Because their desire to be socially high give rise to Apple in china. A market where locally produced were very cheap, but people started valuing iphone and other Apple products. Apple started separately highlighting a separate portion about Greater China sales since 2013. Since, apple has seen an unprecedented rise in sales. And Greater China became third biggest region in terms of sales for apple.

Apple sales in china from 2014

SrYear Sales in billion dollar

How many people use Apple product in china 

China is a huge market. If any come get 10 to 15 % of the market it is very successful. It would be more than the population of most of the countries.

In 2024 iphone took the biggest share of mobile users in 16 % of the total market .

What The Future Holds for Apple in China .

China seems a huge market with huge potential but , But this is not US market the issue Apple will have to face are different. 

The potential Problem Apple might have to face.

  1. Innovation 

Lake of innovation in last decade is going to have a impact on apple performance in every market. Apple innovation once were it’s competitive advantage. Since it is not the way it was once. This puts Apple at very vulnerable position comparing to it’s competitor.

  1. Price 

It’s a very tricky matter once it comes to china. Most of the people can’t afford apple product, because of its price, even those the income level are risen significantly in past three decades, but these are still far far behinds when it comes to America. And most people who buy these products are the those who feels Apple is status symbol. This will give them a special position in the social hierarchy. 

But since lately in last couple of year apple’s management is flirting with the prices to increase the sales. They must really be careful how down they can go interms of prices. Because if they went too low their may come a point where Chinese may start to think Apple products are not status symbol. Every one can buy those.

For me the risk is the temptations to decrease prices, to a point where it will start to burn their own boat.

  1. Geopolitics 

Since American and China in war to gain global superpower. They both are trying to weak one and other, and this thing could lead to hammering the one an other companies. Since Apple is American owned company it could be hurt because of this geopolitics of two nations. Apple CEO once said we can’t really completely relay on china. Because of the geopolitical reason. She said they will have to look for some other venues.

And recently Apple has started to double down their operations in India. Apple might see India as potential alternative to china. Since both countries are has almost the same population.

Positive Things for the Apple in China.

Their are some positive for apple in the Chinese market.

  1. Population 

China is a huge population, those who are improving quality of life pretty rapidly. Their still over a billion people who may never used the apple product. Everything things goes apple still can improve upon the market share.

  1. Brand value 

If something holds value in the minds of the people that is Apple. People still love to buy Apple products. If nothing bad happened interms of geopolitics, and apple start flirting with the prices. They still could make a lots of money because they own the apple logo.

But in the recent past sales of coming down pretty rapidly. This might be the reason flirting with the prices. 

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