smartphone market is almost saturated
Americans still think of China as an emerging market. Not for smartphones. They are now a common tool, owned by the average family, like washing machines or rice cookers. More than 90% of cellphone sales in China are smartphones.
In the first quarter of 2015, according to IDC, China’s smartphone shipments dropped to 98.8 million units, a 4.3% drop from a year earlier, the first quarterly fall in six years.
“Apple is high quality designer replica handbags perceived as a luxury brand in China, so its brand status is just as important as its utility in the Chinese market,” says Liz Flora, who watches the China luxury market as editor in chief at Jing Daily. “It can benefit even in a saturated smartphone market since rising incomes mean that many Designer Louis Vuitton Replica Handbags consumers will upgrade in order to benefit from the status of owning an Apple product.”
Apple is already experiencing an extraordinary boom in China with its iPhone 6 and 6 Plus, propelling the company to the top in China in terms of shipments in the first three months of this year, according to IDC. It beat out homegrown upstart Xiaomi, which is known for its powerful but very affordable phones devices that cost about one third the price of the newest iPhone models. That has reversed a couple of years of decline for Apple in China, when its early strong start in the country was eroded by rival brands making bigger screen phones than Apple offered until very recently.
After the iPhone 6 duo were first revealed, Benedict Evans of the Silicon Valley venture capital firm Andreessen Horowitz argued that Apple had systematically “done its best to close off all the reasons to buy high end Android beyond simple personal preference.” He went on: “You can get a bigger screen, you can change the keyboard, you can put widgets on the notification panel (if you insist) and so on. Pretty much all the external reasons to choose Android are addressed what remains is personal taste.”
That apparently un Apple nod toward greater choice allied with the 6’s attractive form factor that bears many aaa replica designer handbags premium design elements seems to have cemented Apple’s catwalk chic in China, placing it above the hoi polloi Samsungs and the Xiaomis that all the university students are high quality replica handbags china fiddling with. That will only be bolstered by an even more saturated phone market. Like BMWs or Mercedes in China’s cities, the newest iPhone model is a fairly common sight, but it’s still clearly a cut above all the Fords, Chevrolets and BYDs out there.
The Cupertino, Calif., company’s huge brand cachet is no accident. “Apple has been actively cultivating its luxury brand status in China. After hiring Angela Ahrendts from Burberry, it was able to land the Apple Watch on several prominent Chinese fashion magazines including Vogue China,” Flora says.
“Thanks to its luxury status in China, Apple is in a different league from other smartphone brands in the country. People aren’t just buying Apple smartphones for themselves; the brand is also seen as a great gift option. Luxury cheap replica handbags gifting is on the decline due to China’s anti corruption campaign, but high quality designer replica handbags wholesale brand name consumer electronics are considered a Fake Louis Vuitton Replica Bags discreet alternative to traditional luxury brands such as Louis Vuitton Perfect Quality Louis Vuitton Replica or Herms.”
2. More premium competition
In China’s saturated smartphone market, other brands will realize that they not only need to make more premium models, they need to do a much better job of them than they have in the last few years.
Samsung made the recently released Galaxy S6 and S6 Edge look more premium, with more metal and no cheap plastics. But Xiaomi is also doing the same with its Mi Note and Mi Note Pro, which look set to affect Samsung more so than Apple.
Samsung is replica designer handbags feeling this pain the most. Once the China market leader, IDC says Samsung has now slipped to fourth place in terms of shipments plummeting 53% year on year louis vuitton copy bags uk , in contrast to Apple’s 62% gain and it looks set to sink further if the new phones don’t produce a turnaround.
3. Sub brands aimed at younger buyers
Looking at the phone market as a whole, many Chinese brands will create or expand sub brands to challenge Xiaomi. Yes, Xiaomi has been pushed down to No. 2 by Apple, but Xiaomi still grew 42% in terms of shipments in the first quarter of 2015 from a year earlier dolabuy.su , and it’s still the fastest growing Chinese brand. Xiaomi’s effect on Apple might be less significant than many analysts first thought, but Xiaomi could still spell ruin for several other Chinese and overseas brands aiming at the lower to mid price segments.
The dirt cheap Coolpad, from China’s Coolpad Group, briefly outsold Apple in late 2012 before its utilitarian phones started to fall out of favor. It was one of the first to set up a (hopefully hip and cool) sub brand to take on Xiaomi, and now others are following. Lenovo, which is struggling with falling shipments after failing to live up to its promise of beating Samsung to the top spot in China aaa replica designer handbags , will come out with fake designer bags its Shenqi sub brand this year.
In China, smartphones are already cheap, and price competition won’t work by itself. The average selling price of a smartphone in China more than halved from 2010 to replica louis vuitton 2014; but in North America, prices declined by only 25%, according to Citicorp.