Competitive Strategies Case Study

Apple’s iPhone in China: Can Apple Cash in on the World’s Biggest Mobile Market?

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Abstract:
The phrase – “To strive, to seek, to find, and not to yield,” stands apt for all the foreign companies who venture into the toughest market in the world – the Chinese market. Winning the Chinese market has been a herculean task for most of the companies. Yet, they never give up, despite setbacks.

After establishing itself in several countries, on August 28th 2009, Apple iPhone entered the Chinese smartphone market to tap the world’s biggest mobile market. But, Apple iPhone, a cult brand across the globe, is finding difficulty in replicating its success in China. Marred by copycats, the company’s previous launch of iPod was not a big hit in the Chinese market. This time Apple entered into a non-exclusive licence deal with the second-largest mobile carrier of China – China Unicom – to sell iPhones in China. Apple is optimistic about the Chinese smartphone market where players like Nokia and Motorola already have a strong foothold and are bound to give a tough competition to the brand. Moreover, Apple iPhone has lately made its debut in China 2 years after its US launch. In the meantime, there was an unofficial distribution of iPhones into China. Hence, the questions arises, can Apple iPhone grab a share in the Chinese mobile market, by competing with the existing players? Will grey market be a boon or bane for Apple iPhone’s sales? What factors can drive the company’s success in China? In other words, what strategies can be adopted by Apple to make its product a success and thereby generate revenues?

Pedagogical Objectives:

• To critically analyse and understand the Chinese mobile industry (mobile services and handsets) and its competitive landscape
• To understand the consumer preferences and the critical success factors in the Chinese mobile market
• To analyse the reasons behind Apple’s foray into the Chinese mobile market and evaluate the possibility of success and failure for Apple’s iPhone in China.

Keywords : Chinese Mobile Handset industry, Late mover advantage, Apple iPhone, Consumer Buying Behaviour, Non-exclusive license deal, China Unicom, Grey markets, China Telecom restructuring, Pioneers vs Late Entrants, 3G Technology, Smartphone market

Contents : 
Mobile Handset Market in China
Adoption of Mobile Phone Technologies
Mobile Phone Subscribers in China
Mobile Handset Market Share in China
The Source of Technology for Local Handset Makers
Chinese Consumer Preferences
Chinese Consumers’ Preference