China Mobile’s Explosive Growth is Positive for Apple
Forbes.com
Feb. 19, 2015
Feb. 19, 2015
Coded Expectation
BTV.03- assess how international business can affect one or more of a company’s business functions
Summary
Over the past 12 months, China’s largest communication company, China Mobile, has grown its number of 4G users to 106.8 million users. Many of these new users are using Apple’s phone, which is reflected in Apple’s profits in the emerging Chinese market. In Apple’s June quarter earning report, they noted a 26% growth of revenue year-over-year in China. Then, in December, after the release of the iPhone 6 and 6 Plus, Apple reported a 70% year-on-year growth in China. These strong numbers have helped Apple to experience a significant increase in profit, even when their other markets, such as Europe and the US, have largely stalled.
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Apple has seen a huge increase in their Chinese market, selling more phones in China last year than in the US (Sources: Photo (4), Info (3)).
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Connection
In the past, Apple has focused predominately on the North American and Europe markets, and for good reason. Their products are expensive, and those continents hold a majority of the world’s wealth. However, Apple discovered an untapped market when they opened stores in China. Due to China’s enormous population, Apple realized that even if a small percentage of citizens could afford their products, they would be able to sell an enormous number of their devices. Apple’s gamble on the foreign market has paid off, and Apple’s largest area of growth is now China.
This has greatly affected Apple’s business functions. It has forced them to invest in Chinese infrastructure such as stores and staff. Additionally, they will likely focus more on marketing to an Asian culture, with the US and Europe taking a backseat. For example, if privacy isn’t much of a concern for Asian customers, but they’d prefer lower prices, it’s reasonable to see Apple focusing more on lowering costs than building the safest phone. In the next few years, customers may see a difference in Apple’s products, simply due to the Chinese market's impact on Apple.
This has greatly affected Apple’s business functions. It has forced them to invest in Chinese infrastructure such as stores and staff. Additionally, they will likely focus more on marketing to an Asian culture, with the US and Europe taking a backseat. For example, if privacy isn’t much of a concern for Asian customers, but they’d prefer lower prices, it’s reasonable to see Apple focusing more on lowering costs than building the safest phone. In the next few years, customers may see a difference in Apple’s products, simply due to the Chinese market's impact on Apple.
Video
The following video shows one of Apple's newest stores in China, and demonstrates the number of loyal customers they have already gained.