Why Apple Company Came To China Marketing Essay

There’s no doubt that China is a good market for Apple. Besides, with cooperation with China, Apple can smooth its global expansion more easily. To reach the goal, Apple must solve the problem that iPhone doesn’t compatible with Chinese communications network. It is reported that Apple is looking forward to extricate it from arrangements with AT&T in the American which indicates a global strategic shift. A Dow Jones story said that Apple have dealt with China Unicom. The apple agree the big changes between two oprators.Besides, China Unicom is the first company that provides iPhone in China, but it’s sure that China Unicom is not the only one to do that.

Moreover, China Mobile Chairman Wang Jianzhou insists that his company still have the intention to sell iPhone and this desire is keep ongoing since 2007. He also gave some evidences that China Mobile is the better player in the market. The above mentioned shows that Apple will still be interested in doing business.

However, things may not be plain sailing all the time. A financial reality of the deal is not so satisfying for Apple. The monthly average revenue per user is about $6.19 which simply isn’t the kind of money that Apple wants for exclusivity. What’s more, strategic pressure also follows to this series of events. Apple ‘s current situation must limit iPhone’s popularity in China in many aspects, but management should be smart, and it can not last forever. Apple has already taken effort to working out the problem. However, some indication shows that Apple moves slowly and falls into the dilemma that it has to rely on traditional consumer electronics firms gradually.

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On the other hand, Apple must admit that the competition is much more intense than that in expectation. Apple sticks to the principle that its product should fundamentally different from those of everyone else. While in order to shift to a broader distribution strategy, they have to meet customers’ requirements.

In this new strategic reality, Apple has to compete with others to keep make it more large.

¼ˆCbsnews, CBS Interactive Inc, http://www.cbsnews.com/8301-505124_162-43441460/apple-wants-more-chinese-carriers-signs-of-global-strategy-shift/, 23 October 2012¼‰

Except for China, apple also expands to many other areas. The first external retail store was opened in November 30, 2003, which is located in Ginza, Tokyo. It’s a street-level store in Tokyo’s major shopping district. The first floor is the “pro” and “home” sections which place desktop models and the usual laptops, along with accessories to display the iLife applications like music, video and photos. It includes every element at a U.S. store. The second floor has a Genius Bar in the front of the store. On the third floor there is an 84-seat theater. It’s a full, tiered, luxury-seating presentation venue, with a giant rear-projection screen and presenter podium, and upholstered walls for sound control. The fourth floor is the top floor. Different from other floors, it has windows which are covered by glass panels. In this way, ventilation can be improved.

One year later, Apple came to the UK, the largest store in the Regent Street was occupied by it. This is the first Apple flagship store besides the grove but not to be on a corner. Two months later after opening, the store took the achievement of the second-highest grossing store among Apple’s retail chain.

Then Apple expanded to Canada in May 21, 2005 by opening the Yorkdale store in Toronto. The Yorkdale Shopping Centre has more than 200 stores in 1.3 million square-feet, and visitors flow rate reached 450,000 visitors a week where Apple occupies a 40-foot, 3,500 s.f. spaces. The store was moved to other place because of Mall’s expansion.

What’s more, Apple also opened retail stores in many other European countries such as Switzerland, Germany and France and marched in China in December 6, 2008. In addition to that, Apple plans to realize cooperation with Ireland, Brazil, Portugal, New Zealand and Belgium in several years.

(ifoapplestore, Apple, http://www.ifoapplestore.com/stores/apple_stores.xlsx, 23 October 2012)

The obstacles of expansion are from many aspects. Apple may come across differences in government, business practices and customs and even internal debates may emerge.

In terms of differences in government, plenty of reasons should be taken into consideration including politics, economy, culture, population and legislation. Apple entrust Foxconn to process products. However, work conditions at Foxconn, which is supplied by Apple, have lead to a debate about labor regulations. It is said that Apple may have a suspicion of going against Chinese labor law. It’s fact that two iPad factories exploded. Beside, 140 employees on the iTouch line of Wintek were hospitalized. Apple considered that the chief criminal is exorbitant market requirement. The ipad factory explosion also decreased working efficiency. As a result, government may command Apple to stop producing. Otherwise, there would be a consumer boycott.

Apple is informed of these problems in China, but it still doesn’t take any action. Apple said that reforming is a process for several years. Fortunately, Apple clearly understands the problem and consequence so it can take measure to repair if things become worse. Secondly, it’s important for Apple to satisfy Chinese organizations as well.

(The Atlantic, Asia Society, http://www.theatlantic.com/international/archive/2012/03/whos-really-to-blame-for-apples-chinese-labor-problems/253892/, 23 October 2012)

Differences in business practices and customers also play an important role in Apple’s expansion. Obviously, iPone is a special smart phone which differs from normal mobile phone in many ways. Despite these differences are criticized for bring trouble when using, Apple still keep them.

The first case is that iTunes doesn’t allow to connect to a normal MP3. Apple’s lack of openness makes its customers to give up cheap MP3s after buying an iPod. To solve the problem, Apple only has to charge a simple licensing fee of $1-5 a unit for attaching an MP3 to iTunes.

The second case is Apple’s Monopolistic practices in telecommunications. If people want to use an iPhone, they must insert a special kind of SIM cards in it. As a result, they can’t insert the SIM card in a normal mobile phone. An easy solution to the problem is equipped iPhone with two SIM card slots.

The third case is related to Draconian App Store policies. Many applications in the iPhone are forced to execute. There’s no way to close them. Frankly, it is somewhat violate customers’ rights. Actually, a basic setting allowing users to restore system can solve the problem.

The last one is banning other browsers on the iPhone. People have no choice although they dislike iPhone’s browser. If the limitation can be got rid of, iPhone can provide a better mobile data service.

Those limitations mentioned above slow down Apple’s expansion in China to a certain degree.

(Businessinsider, Jason Calacanis, http://www.businessinsider.com/the-case-against-apple-2009-8, 23 October 2012)

Although Chinese customers have deep love for Apple, they still expect it to be more personalized. IPhone is comparatively expensive for amount of people in China. Plenty of piratic iPhones being sold in China is also a great obstacle for Apple. Those fakes are much cheaper than real iPhone, so people who are unable to afford iPhone may choose the former. Though, there’re many things Apple can do to prevent piracy, such as expand its retail network faster and open more shops in mainland China.

The ultimate weapon of Apple to win profit in most countries is not only the beautiful appearance but also the programs. In the beginning, Apple considered China as a promising market because app downloads increase sharply by 300%, rising to 18% of the global total last year. However, most of the Chinese consumers except free applications and take measures to ‘escape from prison’. This phenomenon makes Apple flounder around in china.

To solve these problems, Apple has arguably helped to modernize Chinese attitudes towards enterprise and design. What’s more, Apple plans to help Chinese government to evolve stricter protection of intellectual property.

(economist, from the print edition, http://www.economist.com/node/21559624, 23 October 2012)

Besides, personal differences within the company should be taken into consideration as well. Many customers never hesitate when buying iPhones and iPads, yet the circles of technology executives and designers who is outside Apple complain more often than before about how products look and work. The internal critics are mostly focus on Apple’s software, but designers say that some of Apple’s software which is controversial are still useful, such as the trash bin on the Mac. There is also a Passbook app that is responsible for deleting loyalty and payment cards through something like a paper shredder.

Some applications are really old-fashioned. Apple’s Podcasts app displays a reel-to-reel tape machine for its mobile products. It’s certainly useful because no one use the old machine nowadays.

Use of textures representing physical materials is often derided as well. Luckily, Apple has found the method to decorate the borders of its software.

Designing the next generation of iOS and OS X is the next goal of Apple. This action can help Apple make further efforts to satisfy Chinese customers.

(nytimes , Nick Wingfield, http://www.nytimes.com/2012/11/01/technology/apple-shake-up-could-mean-end-to-real-world-images-in-software.html?pagewanted=all&_r=0, 23 October 2012)