Apple seems to be catching up where many believed it was lacking. The Chinese market, the biggest in the world in terms of consumer base, has emerged as the fastest growing market for its flagship smartphone, the iPhone. The revelation came when Tim Cook, COO of Apple Inc., in an interview with a news agency, said the company managed to generate $5 billion in revenue from the Chinese market.
The sales figure indicate a jump of 250% from the same period last year and equals 10 percent of the company's revenues for the first quarter of 2011. On its home turf, iPhone sales witnessed a growth of 155% and this was during one of the worst American. Moreover, Steve Jobs may not be around much, but Apple's success just seems to be as consistent and awe inspiring with or without his presence at HQ.
Wait and Watch
This was not always the case as far as Apple and the Chinese market was concerned. The company launched the second generation smartphone in the Chinese market almost two years after its launch in the U.S. Since the third generation, or iPhone 3G was about to be launched shortly worldwide, Chinese consumers decided to adopt a wait and watch policy.
Cannot Build Enough
Interestingly enough, the iPhone is considered not just a smartphone by Chinese consumers. Possessing an iPhone is considered to be associated with a higher class; it is actually a significant status symbol there. When the iPhone 4 was launched in China along in other markets, the iPhone was quickly flying off the shelves leading to shortage of this iconic product. The earlier versions however did not enjoy such a fan following.
Chinese Made and Bought
Market research firm The Nielsen states that in the U.S., Apple controls 29 percent of the smartphone market whereas in the Chinese market, the share is just 8.3 percent. That may soon change if Apple aggressively markets and sells the phone in this particular market. After the latest figures have been accounted for, The Nielson may want to conduct this assessment again. Since most of the manufacturing of the iPhone is done in China, the company would find it extremely profitable to market the smartphone there – and sensible.
No Contract
Analysts are of the opinion that Apple was certainly slow in chalking out strategies for the Chinese market. Perhaps because they were too busy tearing it up in America and other parts of the world. Some are even of the opinion that by now China should have been the largest market for the iPhone. The reason probably is the way smartphone's are sold in the Chinese market. Unlike the U.S. market, carriers do not sell the phone to the consumer along with a contract. They are sold directly by the store. Many Americans would favor foregoing the contract.
The Floodgates have Opened
Another reason why Apple was not so keen on the Chinese market is the fact that Apple derives more business from selling apps, music, and e-books from its online stores. As far as the Chinese market is concerned, low credit card penetration, unwillingness to buy applications, music and books in U.S. dollars, and slower networks, might have put off company executives from focusing more on China.
A New Frontier has been Breached
Nevertheless, Apple now seems to have realized the potential of the Chinese smartphone market and will be fine tuning its strategies there. Till then, America will remain the most vital market for Apple.
