Very often, whether in Europe, the United States or Latin America, we are not aware of the size of the Chinese market. And not just big, but different. Nail highly developed society and countries outside of services like those of Google and with its own industry and software. Apple enjoys better treatment from the Chinese government, since its sale is authorized and Apple Stores open relatively frequently in that country.
Back to services, many such as messaging, cards, payments… are made with applications from China which are not used in the rest of the world. But given its size, China can be considered a world apart. For society and for the more than fourteen hundred million people who live there.
Actually, Many businesses have failed in China because they failed to understand the market or the society. from there we try to replicate the same thing that works in the rest of the world. These cases were as important as those of Ikea, McDonald’s or Starbucks. Companies that have had to adaptand much more, the way of communicating and functioning in the great Asian giant.
Apple has problems in China and they will try to solve them soon
While there are big brands that are successful in Europe and Latin America, like Xiaomi, OPPO, Huawei… you can imagine the use they will have in China, right? Since they are all created there, with software and philosophy from there, Apple is at a serious disadvantage. It happens like in the United States with Apple, but in reverse. They are banking on their national brands giving them more of what they need.
This is why Apple offers a drop in sales quite pronounced in this country. More precisely a 24% compared to its competition. Being the company that declined the most.
Apple Betas Fall in China Compared to Competitors
The drop in sales was such that, for the first time, Apple offered offers or discounts.
Those of us who buy Apple know well that it never officially lowers prices. We can find offers and Amazon, MediaMarkt, K-tuin, etc. But Apple stays true to its prices throughout the year. In the case of China, this January has been different. And to mark the Chinese New Year, Apple created a campaign of unusual offers for its customers in Asia. Direct discounts on new devices like the iPhone 15 or Apple Watch Series 9. For example, up to 500 yuan less ($70) on the latest iPhone model.
Apple wants to conquer us with its AI, but in China it will be more difficult
One of the reasons to update to iOS 18 will be the artificial intelligence it includes. And surely the new iPhone 16 They will have many other exclusive AI features to encourage your purchase. In fact, we already know that its A18 processors are designed with artificial intelligence in mind. On the other hand, we also know that Apple can rely on Google to create its AI platform. And what is happening with Google in China? That it is banned and you cannot use its services. This is why Apple has a problem in this regard.
Apple’s solution is to create an alternative AI just for China
The Chinese market is so large that Apple has already started negotiations with Baidu, the Chinese Google. It is the largest search engine in the countryand that’s why Apple chose it against other competitors of AI like Alibaba. The reasons that pushed Baidu to make its contribution to artificial intelligence in China are multiple.
Home page of Baidu, the Chinese Google
Accept and apply the Chinese regulatory framework, which not only prohibits the use of Google services, but any artificial intelligence must respect the country’s core values such as “social morality and professional ethics.” Furthermore, will be banned “generate content that threatens national security, territorial unity, social stability or the legitimate rights and interests of others.”
After, With an AI based in China, this knowledge or social adaptation is guaranteed and the content we talked about at the beginning. This happens to us ourselves, for example, with Apple Maps or other types of Apple services like Apple News. In the United States they work perfectly, but as soon as they cross the border or become unavailable or with limited functionality.
This is the plan of attack, we will know the results and whether it worked in a few months
On the one hand, the discounts offered during Chinese New Year We will know how they worked during the next presentation of Apple financial results. It will be exactly on May 2 that we will know the sales data for January, February and March 2024.
Then, the next meeting will be at WWDC 2024. On June 10 we will know the new operating system iOS 18 with all AI features available. It will have to be pay close attention to availability by country and chosen partners like Google or Baidu.
Eventuallythe presentation of the iPhone 16 in September. With even more artificial intelligence to encourage the purchase of new iPhone models. In this case, Apple must sell it very well all over the world, but especially in China for the reasons we have mentioned.
Source | WSJ, Counterpoint and Forbes
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