Apple Could Finally Conquer The Chinese Market This Year

By Luis Fran , Feb 22, 2017 07:41 AM EST
Despite the fact that Apple´s recent numbers in China have been surprisingly outstanding, there´s a key element that could make the Cupertino company conquer the Chinese market and beat its competitors. (Photo : Android Authority/YouTube)

Apple´s outlook for China sales is more optimist than ever after an upbeat research report from Morgan Stanley revealed that the company shares rallied to another record onTuesday. This way, Apple´s biggest goal of making a major hit in the Chinese market is possible to the point in which the Cupertino giant can actually beat Xiaomi, Vivo and Oppo, three top brands in the nation´s smartphone market.

Apple´s Latest Numbers In The Chinese Market Is Outstanding

Naturally, this is something that definitely changes Apple´s perspectives in 2017, considering that the company is considering the Chinese market as an impossible goal for now.  It wanted to focus on its upcoming iPhone 8 and the ways this flagship could increase its hegemony in the U.S. and Europe market. Apple´s stock climbed 0.7 percent to $136.70 just in the intraday high of $136.75 hit in the afternoon trade, which topped Friday´s record close of $135.72, and the recent intraday record of $136.27 that was reached on February 15.

According to analyst Katy Huberty, the investors' concerns that the Cupertino giant lost its edge in China are misguided, even when the company faced a concerning decline of 24 percent in China sales over the past year. The reason of this position is because she raised her stock price target to $154, which was 13 percent above current levels from $150.

In fact, she also explained that a base case of 72 million iPhones shipped in China during Apple´s fiscal year ending September 2018 is expected, being 27 million above the current run rate and above consensus expectations for a 19 million increase. Also, she raised her fiscal 2018 total iPhone sales estimate to 260 million being above the ambitious consensus of about 241 million.

Chinese Customers Remain Loyal To Apple

Another important thing that she revealed was that Apple´s revenue in its "Greater China" region was down to 12 percent in the December-ending fiscal first quarter, but its growth in mainland China returned up to 6 percent. Naturally, this reveals that even when the Cupertino company was downgraded to the fifth place in China´s smartphone market, its rise is starting to be so outstanding that the nation´s greatest brand are seriously threatened.

Actually, considering that Chinese consumers are especially sensitive to form factor changes, the iPhone 8 could make a really major hit in this nation, considering that it will have revolutionary features like the wireless charging. Also, this mobile device will offer a quality that might justify its high cost, given the fact that even when Chinese smartphones are more affordable, no one offers the same perfection as Apple´s.

Combined with this particular element, another huge detail that could represent a big help for Apple is that just as it happens in the U.S., Chinese customers remain loyal to this brand. Naturally, this represents a major success for the Cupertino giant, given the fact that the loyalty effect that this brand usually creates in its consumers around the world hasn´t been that effective in China.

This happened not only because of the great performance of Chinese smartphones but also because of the way in which China´s government has clashed against Apple on several occasions. Nevertheless, this loyalty is definitely Apple´s main weapon to beat these mobile devices, considering that even when its popularity in this nation is out of the question, it is quite possible that some of its customers will switch to the iPhones.

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