Apple is to launch two new research and development (R&D) facilities in China, aiming to expand its presence in this burgeoning consumer market and facilitate closer working relationships with some of the world’s leading consumer electronics and hardware manufacturers. Whether this investment will reverse the trend of falling revenues, however, remains to be seen.
In September, it was revealed that Apple is planning to open a $45m research centre in Beijing, employing 500 people tasked with the development of innovative hardware. One month later, it was announced that a further R&D facility will go ahead in Shenzhen, Guangdong, an area often described as China’s ‘Silicon Valley’. Read more
By Kevin Martin, HSBC
China’s consumers are by no means the wealthiest in the world. But they are years ahead of their counterparts in many developed economies in terms of how they shop and pay for what they buy. In this, they are revolutionising the way consumer finance is conducted in the world’s second-biggest economy.
Like so many of the changes sweeping China, the uptake of internet and digital technologies has happened with head-spinning speed.
As recently as 2000, a mere 1.7 per cent of mainland Chinese were online. Now, the country has more than 700m internet users – a penetration rate of more than 50 per cent. Read more
The end is in sight for Google’s seven wilderness years in China. With none of the theatrics that accompanied its voluntary withdrawal from the country due to web-search censorship in January 2010, Google is now firmly on a path not only to return to China but also to potentially seize a spot alongside Apple as one of the most profitable tech companies there.
This is a likely outcome of Google’s announcement last week that it is entering with full force the global consumer hardware industry. Google Pixel mobile phones, Google Home artificial intelligence-enabled speakers, Google Daydream View virtual reality headsets, these will be the engines of Google’s revival in China. Based on what Google has so far revealed – including pricing – these products may find a large market among Chinese consumers.
The company has made no specific mention of plans to re-enter China. China’s government will not likely strew the ground with rose petals to welcome Google back. Read more
As rumours swirl about the design of Apple’s iPhone 6 ahead of its hotly anticipated debut next week, economists have made some more hard-headed – but no less remarkable – predictions about its impact.
Bank of America Merrill Lynch Global Research has estimated that the “expected large scale” of sales of the iPhone 6 will push up GDP in Taiwan by 40 basis points this year, add 1 percentage point a month to China’s export growth for the rest of 2014 and boost Taiwan’s export growth by around 2 percentage points a month between August and October and then 1 percentage point a month until January 2015. Read more
Which company added over 50m new paying subscribers in 2013 alone? Yup, China Mobile. The company now has 763m customers, all of whom as of Friday can now buy an iPhone.
Success! No wonder Apple chief executive Tim Cook looks excited to be in Beijing. But it might not be quite that simple. Read more
The App Store has recently celebrated a milestone, achieving $10bn in app sales since its inception. Something certainly remarkable, but how far will this success stretch beyond the western world? With the western market reaching saturation, there are swathes of potential new customers in markets including Latin America, Asia and sub-Saharan Africa who are eager for mobile content.
But can Apple and other players emulate their success further afield? Read more
Apple and Nokia’s latest quarterly results always throw up something interesting – usually in different directions, as the Finnish phonemaker declines and the US tech giant forges on.
So here’s one nugget from the recent reports: in revenue terms year-on-year, Apple added the equivalent of Nokia’s entire China services and devices business in just one quarter. Read more
It was a quarter to forget for China Mobile. The world’s largest mobile operator on Monday reported an 8.7 per cent year-on-year drop in net income to Rmb28.37bn ($4.6bn) for the third quarter, well below analyst expectations of Rmb30.9bn.
The disappointing set of results, if anything, should bolster the case for the company to strike that long-awaited iPhone distribution deal with Apple. Read more
A Burberry mask, but not an iPhone
As Angela Ahrendts “transitions” from Burberry to Apple, giving shares in the fashion group a 4 per cent plus drop on the way, it might seem odd to ask what Apple, a company that has reinvented consumer devices and retail, can learn from Burberry.
It certainly isn’t scale – Apple is one of the world’s biggest companies. Or brand value – Apple is ranked #1 in the global Interbrand index.
So what can it learn from Burberry’s outgoing chief executive? In a nutshell: emerging markets. Read more
Apple’s launch of its iPhone 5S and 5C has generated as much speculation over its business in China as it has interest in the models themselves.
Can Apple pull off a deal with China Mobile, the world’s biggest mobile carrier? Or would a better question be: is it too late? Read more
Apple’s simultaneous product launch in California and Beijing was the latest sign that the global brand is attempting to push into Asian markets.
But Apple’s foray into China has not so far been an unmitigated success, write Kate Allen and Sarah Mishkin. In fact, the brand seems to be struggling to seize the market. Why so? Here are six key points about the Chinese mobile market that might help to explain. Read more
Apple will on Tuesday hold its first product launch event in nearly a year. But the buzz surrounding the event has been less about a new range of low-cost iPhones expected to be rolled out, than on whether Apple will finally announce a long-awaited partnership with China Mobile, the country’s largest mobile operator.
If it comes, a deal would represent a major game changer for Apple, which has seen its share of the smartphone market in China eroded by the likes of Samsung and local manufacturers – including Xiaomi, a three-year-old start-up with a $10bn valuation. Read more
So more on those dismal China numbers.
According to Tim Cook, Apple’s CEO, the company is still doing well in the country despite the 43 per cent slump reported in quarter-on-quarter revenues. The problem – if Cook is to be believed – is not mainland China, but Hong Kong. Read more
China has proved to be a drag on the results of corporate America so far this earnings season. From Coca-Cola to McDonald’s, even companies that have long been seen as experts in mining the country for profits are finding the goings tougher as growth in the world’s second economy hits the wall.
On Tuesday, it was Apple’s turn to feel the pinch. While the company posted better-than-expected earnings thanks to strong iPhone sales, revenue from China – now Apple’s second largest single biggest market behind the US – hit the skids. Read more
Just a few weeks ago, Foxconn was apologising profusely for poor performance as rival contract manufacturer Pegatron was riding high on reports that it had won out over Foxconn, Apple’s main manufacturer, for a contract to make Apple’s upcoming cheaper version of its iPhone.
Things have changed. Now it’s Pegatron’s shares that are falling, battered by local reports that it is will not get as many orders as initially forecast, with Foxconn getting them instead. Read more
India has overtaken Japan to become the world’s third largest market for smartphones, joining China and the US on the podium.
In some ways, it’s unsurprising. With a population of over a billion people India is bound eventually to be among the largest markets for pretty much anything. What is interesting is how Indians are using their phones – and the local handset makers that are seeing lightning fast growth. Read more
Pieces of HTC’s recent management shake-up seem to be falling in place with its announcement on Thursday of new leadership for its south Asia operations.
Most notably, the struggling Taiwanese smartphone maker says its new head of south and southeast Asia has come over from the key competitor HTC has been trying hard to emulate – Apple. Read more
China Mobile has this month quietly launched Jego, an app to rival Skype’s free voice-calling system, in an effort to extend its international reach.
Callers from outside China will be able to call China numbers (landline and mobile) for free. The app is now available on Google play and in Apple’s iTunes store.
One curious fact that hasn’t got in the way of the arrangement is that China Mobile and Apple have been locked in a long stalemate over the distribution of Apple’s iPhone. So could Jego mark the start of an Apple-China Mobile rapprochement? Read more
Samsung Electronics is on a roll thanks to the huge popularity of its latest smartphone. The Galaxy S4 has sold 10m units within a month of its release, making it Samsung’s fastest-selling smartphone ever – the Galaxy S4 reached the 10m mark in half the time taken by its predecessor. Read more
Apple may be souring the market with its unimpressive forecasts, but not all the suppliers who rely on the US tech group for orders are suffering.
Shares in Largan Precision, a Taiwanese lens maker, gained 7 per cent on Friday after it reported stronger than anticipated earnings for the last quarter and, against expectations, forecast more growth ahead. Its secret? Growth of other brands has been strong enough to offset Apple. That’s a change from the days when Apple was component companies’ key driver of growth. Read more