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January 23, 2013

Apple to Reassess its Chinese Marketing Approach

The Chinese market is at the top of the list of every CEO that is heading a major corporation. Apple like other companies wants the Chinese mobile market but has priced itself out of the market. The average Chinese citizen can’t even think about buying Apple’s cheapest product much less the iPhone. With 1,091.9 billion active customers as of November 2012, the mobile customer base is more than the combined population of North America and Europe.

While there is a significant opportunity for Apple in this location, the company has to take a new approach if it wants a larger share of this market.

The three largest mobile companies in the country include: China Mobile, China Unicom and China Telecom who have 703 million, 232.9 million and 155.5 million customers respectively. These companies realize the average monthly salary in China is about 4,672 Yuan or $730 in the biggest cities while smaller cities and provinces have lower annual salaries. That is why a company that is 99 percent smaller than Apple is outselling it with a product that is very similar to the iPhone.

The Coolpad 8060 sells for less than $100 or 619 Yuan and although it is still more than 10 percent of the monthly salary for someone living in Beijing, it is far more tolerable than an iPhone. This concept so far has been eluding Apple and if it wants to stay relevant in the world market, the company will have to start introducing new product sthe emerging markets of the world can actually afford.

The developed world cannot sustain the profits the company is experiencing because average ownerships of Apple smartphones is around 22 months. And with the introduction of new models from Samsung and other companies, other markets have to be explored for long term sustainability.

It is has been rumored that the company will soon be introducing iPhones in the $99 to $149 range for these developing markets. This news is going to be welcomed for shareholders of the company as it has seen a 23 percent decrease of its smartphone sales in the third quarter of 2012 compared to that of the first quarter of the same year. With a total of $5.7 billion in sales in China, Apple generates around 16 percent of its worldwide total from this country. If the new line of phones are introduced later this year as expected, the company will likely capture a larger share of a very desirable mobile market.

Edited by Jamie Epstein

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