How Apple got it so wrong, especially in China!

I’ve been the prophet of doom when it comes to Apple for some time now. It didn’t start, like most people, with the death of Steve Jobs, because I believe one man doesn’t make an entire organization – even though in this case it’s almost certainly the truth.

The reason I’ve been so pessimistic is that I live in Shanghai and I get the opportunity to watch Chinese consumers in action every day. Such is the pull of China that if the consumers here switch you off you can almost kiss the next ten years of your business goodbye.

apple in chinaApple has been hanging on to the innovation they once found so plentiful, by a thread while Samsung has been delivering it in abundance on a regular basis to the world. Samsung has engaged and courted the Asian consumer while Apple has released new innovations late, after sales serviced poorly and outright just ignored the retail environment here, and finally, the Chinese are just not taking it anymore especially after this last effort at ‘innovation’.

As long as Apple keep delivering products that are sexier than the competition they remain the phone to be in everyone’s hand, and here I mean EVERYONE. Their safety was secured by virtue of their brand status, which in China is absolutely everything. This recent launch of the 5C however has done severe damage to this once impenetrable brand.

I’m pretty sure it all made sense by the numbers – someone in Apple worked out how many phones, in theory, they could sell if they brought out a ‘cheap’ phone, worked out the profits and then sent to whoever for approval of this new project. Somewhere along the way though they found out they couldn’t make it that much cheaper and so they skimped in the places the Chinese consumer least wants its, outward appearance!

Xiomi have innovated faster and delivered better in China + thei APP store has twice the downloads per person as Apple!
Xiomi have innovated faster and delivered better in China + thei APP store has twice the downloads per person as Apple!

The fact the Apple actually thought a cheaper phone would start taking back market share from local companies like Xiaomi or Huawei just shows how little they understand and how out of touch they are with their consumer here and really just how far behind they have actually fallen. It is said that ‘poor financial performance is a lagging indicator of a bigger problem’ and their lack of ability to even understand the Chinese market let alone develop a product for it shows exactly that.

The new 5C that I’m sure was hailed in its theoretical concept as a money printing machine, I can almost see Tim Cook rubbing his little paws together in eager anticipation of his first major mark on Apple, but sadly the current view of the Chinese consumer is that it’s a seriously large amount of money to pay for something that looks like a colorful potato peeler.

iphone 5c potato peeler

This is not the beginning of the end for Apple because even Nokia is still alive but this is certainly, if you weren’t convinced before, a strong indication of how far and fast they have fallen!