The Apple iPhone has always been the most expensive smartphone in the market. Last year, its price shot up to USD 999. Before the launch of iPhone X in September last year, market analysts were highly skeptical about the sales of this expensive product, especially in the China market. That's common sense! Who would buy a smartphone which is literally 5 times more expensive than a reasonably performing competing product? The reality, however, proved all analysts wrong!
Apple iPhones still topped all smartphones in China in terms of sales revenue, though it ranked fifth in terms of quantity sold, behind Huawei, OPPO, VIVO and Xiaomi. Obviously, Apple earned more money than any of its competitors because its products were a lot more expensive. From the viewpoint of strategy, Apple has obviously been super successful in positioning itself above its competitors, and as long as it remains superior in the hearts of its fans, it will continue to succeed. The point is that, unlike its Chinese counterparts, Apple never aims to sell more at cheap price. Instead, Apple sells less but at a much much higher price!
The China market is clearly highly uneven and plagued by upstart mentality. As long as there are enough nouveau riche who love Apple because it's not cheap, Apple can continue to shoot up prices to offset the shrinking market share1. Apple has already verified this strategy in 2017. Should Tim Cook see the intensifying upstart mentality of Chinese fans, iPhone prices will continue to escalate. Of course, the more rational global market would disrupt this strategy to some extent. The question is where and when an equilibrium be reached under the influence of the highly skewed China market.
August 9, 2018
_______________ References:
1 Apple grew 32% YoY in China's shrinking phone market due to "strong performance of iPhone X" — Daniel Eran Dilger (April 2018)
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.