Yearly upgrade cycles for smartphones are a thing of the past and smartphone makers are struggling to keep their profitability and revenue up. Apple has been focusing on bolstering it’s digital services to boost earnings and it seems to be working.
If we take a look at Apple’s services it’s easy to see how they’ll work in Western markets but China has it’s own set of services. People aren’t used to paying for music and the country doesn’t have access to the iTunes movie store.
And of course there is always WeChat to consider.
WeChat’s multitude of features — bolstered by an array of mini programs from third parties — means it can handle almost every situation from inside the app itself. While outside China you might use one app to message someone, another to call a taxi and a third app to pay for dinner, inside China, all of that can be handled by WeChat.
Since WeChat is virtually identical on iOS and Android — and since people in China spend most of their time inside WeChat — the differences between iOS and Android matter less in the country. In fact, it’s the one place where people are more likely to switch between iOS and Android. Recent data shows that more Chinese iPhone owners have been switching to Android handsets compared to a year ago.
Lack of device loyalty is a challenge for Apple.
If you don’t feel like you’re locked into the Apple ecosystem, you’re less likely to commit to an Apple service.
What about Music?
In China Apple isn’t even on the map when it comes to streaming music, it’s service launched in 2015. The countries music services are primarily provided by Tencent who has 3 music streaming services.
Paying for music is not a mainstream concept in China where piracy has largely declined over the last three years, but people remain reluctant to pay. The average streaming music platform only sees 4% of it’s users pay for content.
Apple isn’t catering to what people want
Apple is infamous for controlling have their services look across markets and this could be their downfall in China.
Apple has not added features that are common on other platforms like live-streamed sessions from artists and karaoke recording, which lets users cover their favorite songs and share it with friends.
When it comes to payments Apple Pay uses NFC contactless payment. Alipay and WeChat Pay allow users to pay using QR codes (and more recently, facial recognition), which are far more prevalent in China.
To make money in China, you have to have actually offer services
Apple Books, iTunes movies and Apple TV have been shut down by state authorities. On the flip side thanks to the government Apple did see double digit growth in games. The tech giants fate in China when it comes to services is very much linked to being in favor with the government.
If Apple is looking to be successful in China they’ll need services to sell, as much as people may want to give Apple their money, they can’t pay for something that doesn’t’ exist.
Via Abacus News