Apple is courting China. In September 2018, apple introduced the dual-card and dual-standby feature for the first time, with the iPhone XS Max and iPhone XR only supporting dual-card and dual-standby physical cards in China.

At 10 o ‘clock in the evening of October 30, just over a month after the last release, Apple once again released a new product, in the newly released iPhone XR to provide a variety of colors for domestic users to choose and Apple for the first time iOS system text completely Chinese, so as to achieve more suitable for Chinese users.

Apple has been courting China since 2007, when it first appeared in the eyes of the Chinese people and first sold its products in Hong Kong, Macao and Taiwan. In 2008, Direct apple stores opened in Beijing and Shanghai, and now they have spread across the Chinese mainland.

Ten years after entering China, Every new product of Apple is now aimed at the Chinese mainland market in the first time, which can be described as “vast money”.

1. Apple’s first entry into China focuses on innovation and cooperation

There was an argument a long time ago that the iPhone 4 wasn’t popular, it was the iPhone 4 that was popular.

In fact, before Apple entered China, the first two generations of iPhone were not launched in China at all, and the third generation was launched in China five months later than the United States, which led to missing the market cycle. Therefore, the first three generations of iPhone were not well known in China.

After entering the Chinese market, Apple aggressively promoted its new iPhone 4, most impressively embedding its mobile ads in various TV dramas. At the same time, the domestic mobile phone environment at that time was also very important, because there was no “smart phone” in the real sense at that time. After Apple entered the country, it interpreted the revolutionary development.

What’s revolutionary about the iPhone is that it creatively answers the question “what is a touch phone?” and “what is a smartphone?” Many people would argue, touch screen is a smart phone, this is not to, for example before touch phones, to do a page in the address book function, then the designers of the inertial thinking at the time on the screen drew a “next page” button, can only be carried out by click on the touch screen pen pages, now looks may feel very funny, But that’s really what happened. So when Apple introduced intuitive swiping, people realized that no matter how well you design the “next page” button, it just doesn’t work. In other words, after Apple entered China, it immediately proposed and realized a new interactive logic for touch screen to the public.

Apple worked closely with China Unicom in 2009. China Unicom and Apple have reached a three-year exclusive sales agreement on the sale of iPhone in China: Apple sells naked phones to China Unicom at the price of 3,000 yuan per unit, and China Unicom is responsible for the exclusive sales of 1 million to 2 million mobile phones every year, guaranteeing the sales volume of not less than 5 billion yuan. Apple doesn’t take a share of Unicom’s business, but phones have an App Store built into them to sell software and services to consumers.

The cooperation between the two sides is undoubtedly a “win-win” thing. On the one hand, Apple’s sales in China are guaranteed to a certain extent, and on the other hand, Unicom also increases a lot of customers for itself. In any case, new entrants to China will not be the ones to lose out.

Second, Apple’s motives for courting China

Although the tie-up with Unicom has boosted sales, there are also domestic rivals. At that time, the domestic market had already been divided by Nokia and MOTOROLA, especially nokia held a large share in the domestic market at that time. It was not easy for Apple to completely leverage the domestic market.

Apple wins on strategy. After entering the Chinese market, in order to attract more Chinese users and make iPhone surpass its rivals in an all-round way, Apple not only increased the standby time of the phone, but also shortened the release time in China and the United States, so that Chinese users could have iPhone as soon as possible. Apple reportedly sold 1.7 million iPhone 4s in China in the first three days of its release, with scalpers fighting for seats at apple stores in Beijing.

The development momentum of Apple is too fast, also let domestic mobile phone manufacturers see business opportunities. Since 2012, Chinese mobile phone brands have mushroomed, especially those represented by OPPO, VIVO, Huawei and Xiaomi, which strongly impacted the domestic market. When Apple’s model was at its low point, they released a variety of new products one after another, as if in a “encirclement raid” against Apple.

Apple has always been not to be outdone, positive and domestic competition. Notably, Apple, which has never used discounts in China, has for the first time introduced an “education discount” policy that qualifies students and faculty members of Chinese universities to buy once a year. As soon as the event was launched, it was warmly welcomed by many college teachers and students. Apple products instantly became the “social hard currency” of young people and became the mainstream among the post-80s and post-90s generation.

In general, the purpose of Apple’s initial entry into China is to seize the Chinese market as soon as possible. Apple is not only confident of its product advantages, but also has a firm grasp of the consumer psychology of young Chinese people and knows what kind of mobile positioning is suitable for them.

Iii. Strive to create “Apple consumption” for Chinese people

After gradually gaining a firm foothold in the Chinese market, Apple was not satisfied with the development of hardware at the present stage and began to expand diversified businesses. It is worth mentioning that Apple started the way of mobile payments.

Apple Pay, an NFC-based mobile payment feature released by Apple Inc, has been officially launched in China. At the beginning of its launch, Apple Pay attracted numerous doubts in China. Of course, these doubts are not unreasonable, because Alipay and wechat Pay have already occupied more than 90% of the domestic mobile payment market share.

Of course, Apple has not been unaware of this, and the launch of Apple Pay is aimed at quickly conquering the Chinese market. After all, the iPhone has a large number of users in China, and if all of them use Apple Pay, the profits can be expected, not to mention the fees that Apple charges banks.

However, the reality is very cruel, people who have long been used to scanning code payment are not very acceptable to this method of payment, so Apple has to use “down-to-earth” way to please Chinese users again. According to the official website of Apple China, from July 18 to 24, 2017, those who Pay with Apple Pay at designated stores with unionPay flash payment signs can enjoy discounts of up to 50% and rewards of up to 50 times bank credit card points.

Apple chose the subsidy to attract more users to use it. Although the effect achieved certain results in just 7 days, it was not a long-term solution. Many users even joked that the event had already ended before they heard the news.

Obviously, Apple’s sincerity of letting profits still needs to be improved. Frankly speaking, it is still reluctant to do more investment, still thinking about its profits and making a fortune. However, the education and cultivation of users is a long-term process. If you have been so stingy, the habits of users can not be cultivated at all, and often the result is a futile “please”.

Four, some “thankless”

Since 2013, Apple has launched simultaneous sales of new products in the Chinese mainland. Although Apple has occupied a large share of the Chinese market for a long time, according to apple’s financial statements, the Chinese market has seen a “negative growth”.

On August 2, 2018, Apple announced its fiscal third quarter 2017 results, with quarterly revenue of $45.4 billion, up 7.2% from $42.4 billion in the same period last year. However, a careful comparison of 2016 financial statements shows that 2016 is not high either. If the growth rate is 7%, the “growth” is likely to be the same as that of 2016, showing a “neutral” trend in revenue.

Apple’s revenue in China was $8.04 billion, down 10% from $8.848 billion a year earlier, with negative growth of 10%. Maybe it has something to do with the “assault and suppression” of domestic phones, because they are targeting the lack of innovation in apple’s downturn; Or apple’s successive price increases make the original “Apple fans” difficult to cope with, and then turn to the current domestic “Android fans.”

On the other hand, Apple’s arrogance has also made everyone unhappy. The “Apple wechat fight” incident in 2017 dominated the topic for some time. The reason was simple: Apple wanted to take a share of wechat, but wechat refused to let it. The incident has exposed apple’s App Store’s “take a percentage” model, and the company’s impatience in China.

Chinese users said that if Apple dared to remove wechat, most of them would abandon apple products. Apple sees the situation is not good, a rare response to this, response implies that wechat did not abide by the spirit of the contract, very intriguing. In fact, the root cause of this “fight” is apple’s view of its own interests, without considering other factors. Because apple understands that whoever it is must play by the rules of my game.

What Apple forgets is that Chinese consumers are more interested in the emotional side of the business, and if apple doesn’t put a stop to its bullying, it could suffer even more.

How can Apple win hearts in the future?

Shanghai was the first stop of Apple CEO Tim Cook’s surprise visit to China on October 8, 2018. Although he has visited China more than a dozen times in the past few years, this visit comes at a critical juncture in Apple’s 10-year history in The country, as well as an important stage in the sino-U.S. trade battle.

Cook’s visit lays an important foundation for Apple’s future presence in China. Cook made it clear that he will continue to increase investment in Shanghai and expand cooperation areas. When talking about the Chinese market, Cook said, “I have never been so optimistic as now”, which shows that Cook is very optimistic about the future prospects, and has a clear development orientation for the layout in China.

Apple officially announced that it will set up r&d centers in Beijing, Shanghai, Suzhou and Shenzhen, and that more Chinese developers will participate in the construction of Apple systems in the future, and Apple will also invest more development funds in China. Indeed, Apple has paid more than 100 billion yuan to Chinese developers so far.

In addition to the r&d center, Apple’s investment in China continues to grow, including the familiar Didi Chuxing. According to analysis, the investment in Didi is likely to be based on its data, and can not rule out the future of Apple’s driverless car project service. More surprisingly, Apple even has most of its final assembly plants in China, including 14 owned by Foxconn, Pegatron, Quanta and others.

Apple’s interest in China has been growing for a decade. Just like a “love beans” with high traffic, it is still worth looking forward to despite the constant gossip.

Article/Liu Kuang public number, ID: Liukuang110, this article first kuang Venture capital network