Apple's iPhone slipping in China because company won't adapt, says Oppo & Vivo founder

AppleInsider

Apple's decline in Chinese iPhone shipments during 2016 can be blamed on the company refusing to adapt its tactics to the local market out of fear of risking its business elsewhere, according to Duan Yongping, the founder of Chinese smartphone brands Oppo and Vivo.

Apple is for instance unwilling to pair lower prices with high-end features, Duan suggested in a Bloomberg interview. Without an installment plan an iPhone 7 starts at 5,388 yuan in China, or about $780, potentially as much as a person's monthly wages. Even an iPhone SE is 3,288 yuan, or some $476.

"Apple couldn't beat us in China because even they have flaws," said Duan. "They're maybe too stubborn sometimes. They made a lot of great things, like their operating system, but we surpass them in other areas."

Despite competing with Apple, Duan is actually a major Apple investor and a fan of CEO Tim Cook, with whom he claims to have met several times. Apple couldn't confirm any meetings between the pair.

Duan lives in Palo Alto, Calif., just a short drive from the new Apple Park campus in Cupertino.

During 2016 Apple slipped out of the top three smartphone brands in China to land in fifth. Huawei claimed the top spot, while Oppo and Vivo took second and third. Xiaomi claimed fourth, even though it was also hit with declining sales.

Apple is known to insist on high profit margins for the iPhone, in fact claiming the lion's share of profits in the smartphone industry. While the strategy has been succesful overall, it has also hindered the iPhone's entry into markets like China and India, where high prices can easily put it out of reach for the average person.

Oppo is hoping to entrench itself in India before Apple can achieve any substantial foothold, Bloomberg said. The latter company controls a tiny share of the Indian smartphone market, and is working to improve its lot with things like more resellers and local manufacturing. For years it has even resorted to selling cheap iPhones that are outdated in other regions -- most recently, it launched a 32 gigabyte version of the iPhone 6.

quadra 610

"We love Apple and look forward to them taking the lion's share of our country's market"...





Said no Apple competitor ever. 

SpamSandwich

Easy for companies which rely on intellectual property infringements to create their cheap phones to say.

rob53

I don't get it. The founder of two cheap Chinese phone brands lives in the US? Go figure.

teejay2012

These companies would love for Apple to appear to 'adapt', as then they would be seen as true competition. But for the market that Apple is currently interested in, they are really not, not even close. Until such point that Apple can no longer command the high end and take most of the profit in this sector, I think they will (and should) stay on the present course and ignore the Oppo, Vivo and Dittos.

fotoformat

Quotes... "Apple is for instance unwilling to pair lower prices with high-end features" and "They made a lot of great things, like their operating system, but we surpass them in other areas."

Ah yes... you are fastest in the race to the bottom!

Metriacanthosaurus

fotoformat said:

Quotes... "Apple is for instance unwilling to pair lower prices with high-end features" and "They made a lot of great things, like their operating system, but we surpass them in other areas."

Ah yes... you are fastest in the race to the bottom!

Almost verbatim what I came here to say. 

"Winning" the race to the bottom, is not winning.

jbdragon

A race to the bottom in profits. Put it in simple terms as this is pretty much what is going on. Who would you rather be, Apple selling 1 iPhone and making a $50 profit or these other company's selling a zillion Android phones and breaking even? How about Apple selling 10 iPhones and now making a $500 profit while they sell 10 zillion Android phones and still break even. So who's winning? Well for them, they say they are, they sold 10 zillion phones and have a biggest chunk of the market share. Anyone else with a brain will say Apple won. They actually made a $500 profit and only had to sell 10 phones to do it. As they say work smarter, not harder!!!!

StrangeDays

This just in -- competitors think Apple isn't perfect. Film at eleven."

brucemc

Apple has developed a strong global brand that is, among other things, "aspirational".  It is one of the many parts, aside from the product features & quality, that allow Apple to command premium pricing.  You don't stay aspirational as a premium brand if you cut your prices to fight with the "good enough" mass market vendors.  For some reason, this simple reality fails to be understood by the media the world over.

magman1979

Apple couldn't beat us in China because even they have flaws," said Duan. "They're maybe too stubborn sometimes. They made a lot of great things, like their operating system, but we surpass them in other areas.

The most asinine, ignorant, arrogant, obtuse thing I've heard so far this Monday...

sog35 said:

Check out their website:

http://www.oppo.com/en/smartphone-f1-plus

Its pretty pathetic how much they shamelessly copy Apple.

I mean seriously. Copying App icons and even friken screen savers. my god. so pathetic.

WOW, just WOW... They put Samsung to shame!

Here's what I tell that douche:

mike1

So, in other words, Apple's insistence on making profitable products is hurting marketshare.
Do they ever learn that those who chase marketshare over profits never win?

getvoxoa

I still think that Apple didn't make what many high-end users want in China: dual SIM cards iPhones. They go nuts over there dual sim card phones.

leavingthebigg

The Oppo/Vivo CEO sounds similar to the LeEco CEO last year.

Let's see what happens to the company throughout this year.

randominternetperson

sog35 said:

Check out their website:

http://www.oppo.com/en/smartphone-f1-plus

Its pretty pathetic how much they shamelessly copy Apple.

I mean seriously. Copying App icons and even friken screen savers. my god. so pathetic.

But they also added a "Beautify 4.0" feature that--as you can see from the on-screen demo--will allow you to make yourself whiter in your selfies.  That's innovation, baby!

levi

Market share at the expense of profits. Weren't the pundits just concerned about Xiaomi, then Huawei? A close family member works for the latter and noted concern internally regarding margins over the last year. I think Apple's real concern is copyright infringement, and anti-competive gov't interference - e.g. blocking the sale of certain models, closing down iTunes and other content, etc.

blastdoor

There are certainly ways in which Apple does need to "adapt" to do better in some markets. 

But cutting prices on existing products is very rarely what I would want to see Apple do. They usually price things appropriately.

I wonder what Mac marketshare is in China.... I'll hazard a guess that it's pretty low. For me, having both iDevices and Macs makes the entire Apple ecosystem much more appealing. If I wasn't a Mac user, the iDevices would be far less sticky for me. 

gmgravytrain

Do the Chinese auto manufacturers say the same thing about Porsche, Mercedes-Benz and BMW in China? Maybe they do, but Chinese consumers are still paying top dollar for those high-end vehicles. I'm not sure what cars are being made in China but the rich Chinese are going after those imported cars. If some companies want to go after the financially strapped consumer that's all well and good but for these manufacturers to be saying Apple is foolish to not lower prices makes very little sense at all. They should be grateful Apple isn't trying to step into their price range. They shouldn't be grousing at Apple, they should be thanking Apple. Oh, well. Everyone has to be a critic. These manufacturers should tend to their own business and leave Apple to do its own thing. Is Tim Cook telling Oppo and Vivo how they should run their business? Hardly. Apple has its own business formula and sticks with it and it seems quite successful so far.

lozblanko

If there's one thing I've learnt over the years, it is that Apple knows exactly how to price things. You get what you pay for and there's no discounting to compete with inferior competitors.

mike1

blastdoor said:

There are certainly ways in which Apple does need to "adapt" to do better in some markets. 

But cutting prices on existing products is very rarely what I would want to see Apple do. They usually price things appropriately.

I wonder what Mac marketshare is in China.... I'll hazard a guess that it's pretty low. For me, having both iDevices and Macs makes the entire Apple ecosystem much more appealing. If I wasn't a Mac user, the iDevices would be far less sticky for me. 

You might be surprised. Haven't moved over from a Windows PC yet, but multiple iPhones, iPads and an Apple TV are pretty sticky too. That said, when I need to get a new home computer, I would probably get an iMac at this point.

mistergsf

I don't know much about Oppo's business with smart phones but Oppo Digital, an independently operated division of OPPO based in Mountain View, California makes great Blu-ray players, headphones, and headphone amps.