Apple's Strategic Shuffle in China: Navigating Slumps,...

Posted: March 22, 2024

Tech giant Apple has always been in a great professional relationship with China. The company’s products are heavily consumed by people in China year after year. According to IDC research, Apple was China’s top smartphone in the market in 2023 for the first time, with a market share of 17.3%.

However, according to Counterpoint Research, the first six weeks of 2024 have seen a slump in the iPhone sales record, amounting to a 24% drop. Apple fell behind Vivo, Huawei, and Oppo, with Huawei experiencing a 64% increase in sales. Hence, the company attributes the slump to two reasons—tight competition with the local company Huawei and the abnormally high sales in January 2023.

In a tedious effort to reverse the country’s deteriorating iPhone sales, Apple CEO Tim Cook launched a charm offensive in China coinciding with the opening of a new Apple store in Shanghai.

The new Apple outlet costs a little over $11 million and is the biggest in China and the second biggest worldwide. The outlet is located in Jing’an, the central district of Shanghai.

Tim Cook arrived in the country Wednesday and promptly shared the news with his 1.68 million Weibo followers. In the Weibo post, Cook said, “Nonghao Shanghai! I’m always so happy to be back in this remarkable city.”

The CEO’s schedule in Shanghai happened to be fully loaded day after day, starting with a traditional breakfast of dumplings and soy milk followed by a meetup with Zheng Kai, a local TV personality. Zheng Kai and Tim Cook paused for a selfie along the famous Bund waterfront.

Additionally, Cook visited the studio of local director Mo Lyu, who the latter claims to be using Apple products in all stages of his creative process, from storyboarding with his iPad to shooting on an iPhone 15 Pro Max to editing with a MacBook Pro.

The tech behemoth now has eight stores in mainland China’s financial hub, Shanghai. Today, Apple has 47 stores in 24 cities all over mainland China, with Shanghai having the most stores.

Tim Cook’s visit to China highlights the country’s profound significance to the tech company as a vital part of its manufacturing supply chain and biggest market overseas.

According to Ivan Lam, counterpoint’s Senior Analyst, “China remains a critical market for Apple, particularly in the premium segment above $800, where it holds a dominant position.” He adds, “With Huawei’s resurgence and other Chinese [phone makers] gaining traction in offline sales, Apple is proactively strengthening its offline presence, leveraging flagship stores as a key tool to promote high-end smartphones.”

In early April, Apple shared the news of expanding its research center in Shanghai in a bid to support its product lines. It plans to launch a new applied research lab in the city later this year. There’s a lot in store for Apple and China in 2024, and the company can only hope that it signals the start of a rising sales record and improved business relations.

As far as business is concerned, China remains to be at the heart of Apple. So, the company will take the necessary steps to regain its sales footing there.