Apple China Stories February 16, 2016

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Industrial and Commercial Bank of China (ICBC) has confirmed earlier reports that Apple Pay would launch in China this week, social media posts stating that its service will go live on Thursday 18 February. A further 18 lenders are signed up to the service, Reuters reporting that two of them – China Guangfa Bank Co and China Construction Bank Corp – will launch on the same day as ICBC.

Apple has been working on bringing its mobile payment service to China for some time, creating a Shanghai-based company to manage the rollout back in September of last year, with this month long rumored to be the target launch date. China will be the fifth country to go live, after the USA, UK, Canada and Australia.

As Reuters notes, however, Apple may face something of an uphill battle in signing up users in China …

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Apple China Stories January 25, 2016

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At its current rate of expansion, Apple could conceivably hit its October goal of 40 retail stores in China within a couple of months. The company has just announced that its 33rd Apple Store in China will open on 31st January, making it the fifth new store in the country in one month …  expand full story

Apple China Stories November 23, 2015

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Apple is making good progress with its aim of having 40 retail stores open in China by next October, announcing that the 27th store will be opening on Saturday in the Chaoyang Joy City shopping mall, Beijing. It will be the fifth Apple Store to open in China’s capital city.

Apple has doubled its year-on-year revenue from China for two quarters running, with the country already representing a larger market than Europe and on track to become a bigger one that the USA …  expand full story

Apple China Stories October 29, 2015

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The old world was a simple one. Apple needed two things to succeed: a well-off market willing to pay a premium price for its products, and a low-cost manufacturing base to build them. The U.S. and Europe provided the former, China the latter.

The idea that China could become Apple’s biggest market in less than a decade would have seemed unimaginable back when the first iPhone went on sale in 2007. It now looks inevitable.

Let’s run the numbers …  expand full story

Apple China Stories October 22, 2015

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Apple CEO Tim Cook, who is currently visiting China, has told the official Xinhua news agency that nothing has changed Apple’s view of the country.

I know some people are worried about the economy. We’ll continue to invest. China is a superb place to be. Nothing has changed that … 

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Apple China Stories September 29, 2015

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With Apple having announced all-time record iPhone sales, you might have expected analysts and investors to be impressed, and to see the AAPL share price rise as a result. Instead, the stock is actually down a little – so what gives?

The answer, like the one to so many questions today, is: China. This is the first iPhone launch where mainland China, and not just Hong Kong, has been included from day one. This means the opening weekend sales of 13M versus 10M last year aren’t like-for-like.

Apple hasn’t revealed what percentage of iPhone sales were made in China, but we can do some back-of-an-envelope sums to get a rough idea …  expand full story

Apple China Stories September 18, 2015

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Apple is one step closer in its plans to take Apple Pay into the company’s second-largest market, China. The WSJ reports that Apple has created a company in the Shanghai free-trade zone specifically to operate its Apple Pay business in the country, and seeded it with $13.4M of capital.

The Apple Inc. entity, named Apple Technology Service (Shanghai) Ltd., was registered in the city’s free-trade zone on June 10, according to the Shanghai government’s company-registration database. Its business operations include technical consulting, services and system integration in the field of payments, the database showed.

With China already a bigger market for Apple than Europe, and looking set to overtake the USA in size, the potential for Apple Pay in the country is huge. Mobile payment is already widely accepted in China, with more than 300 million people using Alipay, the mobile wallet service created by ecommerce giant Alibaba …  expand full story

Apple China Stories August 12, 2015

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From some recent news reports and analyst pronouncements, we could easily get the impression that the relatively weak Chinese economy poses a major threat to Apple. The argument doing the rounds is that China is where Apple is seeing most of its growth at present, and the Chinese economy is tanking.

It’s absolutely the case that the importance of China to Apple cannot be overstated. Apple does continue to grow its sales in both the Americas and Europe, of course, and there is no suggestion that this is showing any sign of slowing, despite a saturated smartphone market. But worldwide growth of 33% was dwarfed by that seen in China, as one recent graph vividly illustrated.

If Chinese demand for Apple products were indeed to weaken significantly, there is no doubt that this would be a major problem for Apple. But it seems to me that the issue is being substantially over-stated …  expand full story

Apple China Stories August 3, 2015

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Apple has lost its top position in smartphone shipments in China, reports Canalys, falling from the #1 slot it achieved in Q4 of 2014 to #3 in Q2 of this year.

Canalys did not reveal Apple’s market share (a number it would like its clients to pay for), stating only that Xiaomi took the top slot with a 15.9% share, with Huawei close behind at 15.7%. A separate market size estimate from Counterpoint, with similar numbers, suggests that Apple’s market share in the country may have fallen to around 12.2% …  expand full story

Apple China Stories July 30, 2015

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Tim Cook tweeted his thanks today to the “thousands of Hong Kong customers” who attended the opening of the company’s fourth Apple Store in Hong Kong.

Plans for the store were first announced in 2013, with construction photos first seen in February. Apple announced the opening date on its website a couple of weeks ago. The additional store is part of Apple’s ambitious expansion program in China, having so far opened six of the 25 new stores it plans to open within two years.

Photos of the new store can be seen below …  expand full story

Apple China Stories May 11, 2015

China approaches smartphone saturation point, shipments fall as penetration hits 90% – IDC

China – long viewed as one of the key growth markets for smartphones – is now approaching saturation point, according to data being released today by IDC. The WSJ reports that smartphone shipments fell for the first time in six years, 4.3% down year-on-year in the previous quarter. Other sources say sales are still growing, but at a much-reduced rate.

Experts say the slowdown is largely driven by the disappearance of China’s first-time buyers. Smartphones now have a more than 90% penetration rate in China, said Tom Kang, research director with market-research firm Counterpoint, meaning just about everybody in China who wants a smartphone already has one. “China is now a replacement market,” Mr. Kang said.

While the news may be bad for many smartphone manufacturers, Apple is less likely to be affected as existing owners upgrade from low-end and mid-range handsets to premium ones.

Apple now sells more iPhones in China than in the US, Kantar putting the company’s market share there at 26%. Tim Cook stated in the most recent earnings call that revenue was up 58% year-on-year in emerging markets, Apple also revealing that Chinese App Store sales doubled in 12 months, while online sales in China tripled in the same time.

The company this morning announced a number of new environmental initiatives in the country.

Photo: Darley Shen/Reuters

Apple China Stories February 27, 2015

U.S. says absurd Chinese rules on selling technology to banks violate trade agreements

The U.S. government has accused China of violating trade agreements by imposing “intrusive” and “protectionist” rules that would prevent companies like Apple selling technology to Chinese banks.

The regulations, announced by China last month, would have required Western companies to turn over source code for products sold to banks, supposedly to permit security checks to be made–a demand to which Apple and other tech companies could never agree.

The WSJ reports that U.S. Trade Representative Michael Froman said today that the rules were unacceptable.

“China’s new regulations on the use of information and communications technology in the banking industry go directly against a series of China’s bilateral and multilateral trade commitments. For example, the rules would require technology transfer and use of domestic Chinese intellectual property as a precondition for market access—both of which China has committed not to do,” said Froman.

The rules aren’t about security. They are about protectionism and favoring Chinese companies,” he said. “The administration is aggressively working to have China walk back from these troubling regulations.”

Apple’s aggressive expansion plans in China have meant the company has sometimes had to tread a careful line, such as agreeing to allow China’s State Internet Information Office to carry out security audits of Apple products sold in the country. It has, though, always refused to allow backdoor access to its products and stated it will never compromise the encryption used by its products and services.

Apple China Stories January 23, 2015

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Beijing News reports that Tim Cook has agreed to allow China’s State Internet Information Office to carry out security audits of Apple products sold in the country. Cook reportedly made the offer during his meeting with China’s Cyberspace Administration minister Lu Wei in December.

China has long expressed suspicion over the security of Apple products, seemingly resulting from frosty relations with the U.S. Government. A state-run TV station in China described the iPhone as a “national security concern” last July due to its location-tracking capabilities. Apple responded by pointing out that location data is stored on the phone, not on Apple’s servers, and is encrypted …  expand full story

Apple China Stories January 20, 2015

[youtube https://www.youtube.com/watch?v=8MAsPtCNMTI]

Update: Apple has posted a version of the video with English subtitles on YouTube (embedded above).

Apple is certainly not thinking small when it comes to China, with 25 new retail stores promised within a two-year period, and its latest soon-to-open store in Hangzhou features a massive mural covering the entire front of the store. The store is due to open on Saturday, January 24th, the second of five new stores Angela Ahrendts said would be opening by the Chinese New Year on February 19th.

Featuring a poem written around 2000 years ago celebrating the importance of the city—a provincial capital—the stunning calligraphy was hand-painted by Wang Dongling, a famous modern calligrapher. Apple has released a video of its creation …  expand full story

Apple China Stories November 11, 2014

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The potential partnership between Apple and Chinese ecommerce giant Alibaba could facilitate a far more rapid rollout of Apple Pay in the country than if Apple goes it alone, suggests a piece in the WSJ. Tim Cook first revealed that he was in talks with the company at the WSJ Digital conference last month.

One possible scenario is for Alibaba’s financial affiliate, which owns the Alipay electronic-payment business in China, to provide back-end services for Apple’s Apple Pay payment system, allowing iPhone users to pay with Apple Pay using the money from their Alipay accounts, Mr. Tsai said.

Such an arrangement would be significant for two reasons …  expand full story

Apple China Stories October 23, 2014

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Tim Cook noted during Monday’s earnings call that Apple was “investing like crazy” in China, but he took the opportunity of his current visit to the country to put a specific number on the company’s retail expansion plans: it will open 25 new Apple Stores in Greater China within the next two years. Greater China includes both Hong Kong and Taiwan.

Speaking to local media, Cook also said that China would in time become Apple’s biggest market, reports the WSJ …  expand full story

Apple China Stories October 22, 2014

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Two days after evidence emerged of a phishing attack on iCloud, allegedly due to the Chinese government firewall redirecting traffic to a fake login page, the Chinese state news agency Xinhuanet is reporting a meeting in Beijing between Tim Cook and Chinese vice premier Ma Kai.

Chinese Vice Premier Ma Kai and Apple Inc. CEO Tim Cook on Wednesday exchanged views on protection of users’ information during their meeting in Zhongnanhai, the central authority’s seat. They also exchanged views on strengthening cooperation in information and communication fields.

The Chinese government censors access to the Internet by deploying a country-wide firewall which blocks certain sites and which can redirect traffic from sites the government dislikes to officially-sanctioned ones … expand full story

Apple China Stories October 17, 2014

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The iPhone 6/Plus finally went on sale in China this morning after regulatory delays, in contrast to last year’s launch of the iPhone 5s and 5c in China on the same day as the US …  expand full story

Apple China Stories September 16, 2014

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Bloomberg is quoting a report from the major Chinese business paper 21st Century Business Herald that the iPhone 6 may not go on sale in China this year due to regulatory delays. Apple was unable to confirm a launch date in the country.

Apple may have to wait until next year to get approval for new iPhones in China after failing to reach agreement with the Ministry of Industry and Information Technology this month, the 21st Century Business Herald reported today, citing an unidentified person close to Apple.

Carolyn Wu, a Beijing-based spokeswoman for Apple, said she couldn’t provide a date for the China release. “China is a key market for us and we will get here as soon as possible,” Wu said in an e-mail today …

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Apple China Stories August 8, 2014

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The reported ban on national and local government departments purchasing Apple products was just a misunderstanding, according to statements by the Finance Ministry and Central Government Procurement Centre cited by Reuters.

The statements say that the procurement list referred to by Bloomberg was just one of many, and listed only “energy-saving products.” China claims that Apple products did not make this list despite qualifying because the necessary paperwork had not been completed …  expand full story

Apple China Stories August 6, 2014

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After a Chinese state-run TV channel last month described the iPhone as a “national security concern” (a claim Apple denied), Bloomberg reports that the Chinese government has stepped up its war on Apple by removing the company’s products from its procurement lists.

Ten Apple products — including the iPad, iPad Mini, MacBook Air and MacBook Pro — were omitted from a final government procurement list distributed in July, according to officials who read it and asked not to be identified because the information isn’t public. The models were on a June version of the list drafted by the National Development and Reform Commission and Ministry of Finance, the officials said …

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Apple China Stories July 22, 2014

Chinese sellers taking iPhone 6 pre-orders two months before anticipated launch

It might be two months before the rumored launch date of the iPhone 6, with a working phone yet to be sighted and no clue as to the retail price, but that isn’t stopping sellers taking pre-orders, reports the WSJ.

More than thirty sellers on Alibaba’s Taobao marketplace said they can help purchase the upcoming new iPhone 6s from the U.S. and Hong Kong. But there’s one catch: consumers have to pay a deposit ranging from 500 yuan ($80)  to 7,999 yuan ($1288).

One seller even went as far as putting together a laughable mockup of an Apple webpage for the iPhone 6 (the full page can be seen below).

Another seller claimed the price of the unsubsidized 4.7-inch model would start at 5,288 yuan ($851) , with the  5.5-inch version starting at 5,988 yuan ($964), but there is absolutely no reason to think they have any information on Apple’s pricing plans.

Back in the real world, it’s been reported that Apple is looking to produce 70-80M iPhone 6 handsets by the end of the year, with production expected to begin imminently after Foxconn confirmed hiring 100,000 new workers for the project.

Here, for your amusement, is that full hilarious attempt at mocking up the iPhone 6 page on the Apple website (complete with the line that it was ‘made for iOS 7’) …

Apple China Stories July 11, 2014

The WSJ reports that the state-run China Central TV has described the iPhone as a “national security concern” due to its location-tracking capabilities.

In its national noon broadcast, state-run China Central Television criticized the “frequent locations” function in Apple’s iOS 7 mobile operating system, which tracks and records the time and location of the owner’s movements. The report quoted researchers who said that those with access to that data could gain knowledge of the broader situation in China or “even state secrets” …

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Apple China Stories January 30, 2014

The changing world map of Apple’s customers in two charts

Apple’s efforts to secure the China Mobile deal were long, drawn out and likely involved rather more negotiation than the company is used to. But if you ever had any doubts as to the importance of those efforts in China, Japan and elsewhere in the Asia-Pacific region, the above two charts, compiled by Fortune, make the reason very clear.

The bad news for Apple is that revenue from its two biggest segments — Europe and the Americas — have begun to contract, not just as a percentage of total revenue, but in dollar terms as well. The good news is that Japan, Asia Pacific and Greater China have so far more than taken up the slack. In Q1 2014, Apple’s combined Asian sales were $17.4 billion, more than Europe ($13 billion) and closing in on the Americas ($20 billion).

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