Sieren's China

The iPhone 7 and iPhone 7 Plus have been on the Chinese market barely a week, but sales are slow. Whereas Apple fans were camping in front of the stores when the iPhone 6 came out so that they would be the first to get hold of the latest model, there were no long queues this time round in Beijing or Shanghai. Only those who had ordered the new model online were able to pick it up in Apple stores.

In the period between April and June sales of the old versions of the iPhone in China dropped by over 30 percent. The iPhone 6 once saved Apple's sales in China when it first came out on the market. But Apple is now under pressure because of a poorly thought out marketing plan for China and increasingly strong competition from Chinese rivals. While Apple had over 10 percent of the market last year, this has decreased to about 7 percent. Apple is now in 5th place behind Huawei, Oppo, Xiaomi and Vivo. This would have been unthinkable three years ago.

Apple 'innovations' are not so innovative

Huawei is now the biggest player in China with an 18 percent market share. Oppo's share of the market increased from 6.9 percent to 14 percent in the second half of this year. Only insiders know the brand in the West.

The biggest problem the new iPhone has is that the "unique innovations" touted by Apple marketing head Phil Schiller are not so innovative in China and have long been features of Chinese smartphones. Customers know this of course and feel that they are being had.

Schiller struck the wrong tone when he talked of Apple's courage to make do without obsolete technology to make space for new features. He was referring to the controversial decision to not have a headphone jack in the new iPhone.

Users will only be able to plug in headphones by using an adaptor in the Lightning port used to charge the phone or connect wireless headphones via Bluetooth. But Chinese smartphone maker LeEco already brought out a phone without a headphone jack in June. The iPhone 7's new dual camera also has long been a standard feature of Huawei phones. So Apple has replaced obsolete technology with new technology that is not new in China.

Poor marketing on the Chinese market

The US firm also played its cards wrong in terms of marketing and design. While Scarlett Johansson can be seen on posters advertising Huawei in front of every shopping center in China, Apple has barely used posters to market its new iPhone. There are posters advertising small Chinese rivals such as Meizu at Beijing's bus stops. But the real mistake was not to radically change the design. Chinese customers get bored fast. If they can afford a new smartphone, they want this to be visible. Otherwise it's not a good status symbol.

The new phone does not have what it will take to put a brake on Apple's decline in an important market. While Apple is losing contact with its customers, Apple CEO Tim Cook continues to act in public as if everyone wants an iPhone. This is no longer the case in China and will probably never be the case again. Even stories such as the one about the son of Wang Jianlin, the richest man in China, who bought eight iPhone7s for his dog Coco will not help. These just prove that Apple's iPhones are going to the dogs.

 

DW's Frank Sieren has lived in Beijing for over 20 years.