The Apple Jing'an retail store is set to open on March 21st, second only to the global Apple flagship store on Fifth Avenue in New York. It is the second largest Apple retail store in the world and the largest in Asia. This is also the 57th Apple Store retail store opened by Apple in Greater China.
On the day before the opening of Apple's Jing'an retail store, Apple CEO Tim Cook launched a "fancy marketing" campaign in Shanghai. Popular Chinese elements such as the Shanghai language TV drama "Flowers", lion dance, and paper folding games have gradually appeared in Cook's itinerary. In addition, Cook also contacted multiple Apple suppliers, including BYD, and said, "I don't think there is anything more important in Apple's supply chain than China."
According to research firm Counterpoint Research, Apple's iPhone sales in China decreased by 24% year-on-year in the first six weeks of this year. In the first quarter, Apple's revenue in Greater China decreased by nearly 13% year-on-year. How to revive its past glory in the Chinese market will still be a topic that Cook cannot avoid during his trip.
Fantastic "Circle Powder" Journey
On March 20th, a "Bund Encounter" entry between Apple CEO Cook and actor Zheng Kai made it to the hot search on Weibo early on. Cook wrote on Weibo, "Good Shanghai! This morning, I strolled along the Bund with @ Zheng Kai and tasted a traditional Shanghai breakfast. Returning to this extraordinary city always brings me special joy."
In the Shanghai language TV drama "Flowers", the role of "Pure Love Warrior" Mr. Wei won a lot of fans for Zheng Kai, and this collaboration is also seen as one of Cook's localized marketing strategies for his trip to Shanghai.
During Cook's one-day itinerary thereafter, he showed a strong desire for the Chinese market.
The reporter from First Financial News sorted out his itinerary and found that Cook visited director Lu Mo's production studio and watched an upcoming work called "Eye Catcher", which is about a girl chasing her dream of lion dance. Lion dance is an excellent folk art in China. During festivals or gatherings, people use lion dance as a means of entertainment. In Cook's publicly posted photos on Weibo, the huge red lion head became the most eye-catching protagonist.
Cook wrote on Weibo, "From drawing storyboards on iPads, to shooting with iPhone 15 Pro Max, and then editing with MacBook Pro, it's great to see how she and her filming team use Apple products in every aspect of their creative process."
In addition to showcasing Chinese elements on Weibo, Cook also closely contacted multiple local Chinese companies on the same day.
Stacking paper games have also become one of Cook's popular moves this time. Cook posted a group photo with founder Yao Runhao on Weibo, stating that "the creators of the @ Warm Nikki series and the Love and Harmony series under the Folding Paper Game brand have created some popular games on the AppStore."
The influence of paper folding games on the women's track is increasing day by day. Cook's Weibo account has received a large number of fan comments, with some fans expressing their anticipation for the vision Pro version of paper folding games.
According to public information, on March 20th, BYD Chairman and President Wang Chuanfu appeared at Apple's China headquarters in Shanghai to meet with Cook. During this period, Apple suppliers such as BYD Electronics, Lansi Technology, and Changying Precision also showcased intelligent manufacturing technology and the components and products produced for Apple. Wang Chuanfu and Cook visited BYD's booth together.
Cook said, "For Apple's supply chain, I don't think there's anything more important than China."
IPhone faces fierce competition in China
For Apple, what is important is not only the supply chain, but also the vast market that cannot be underestimated.
On the eve of the Chinese Lunar New Year, Apple launched a "limited time discount", and in March of this year, third-party retailers once again conducted a comprehensive price reduction of up to a thousand yuan on Apple's iPhone 15 series phones. The basic iPhone 15 model with the greatest price reduction is priced 1300 to 1400 yuan lower than the Apple official website, and the maximum price reduction for a specific version of the iPhone 15 Pro Max model exceeds 1000 yuan.
A series of price reduction and promotional actions are interpreted as actions taken by Apple to address the decline in sales, which also reflects the fierce competitive environment facing Apple in China.
On March 5th, according to market research firm Counterpoint Research, Apple's iPhone sales in China decreased by 24% year-on-year in the first six weeks of this year, ranking fourth among smartphone suppliers in China. Its market share decreased from 19% in 2023 to 15.7%. Counterpoint data also shows that in the first six weeks of this year, Vivo, which has more models and a wider market layout in the lower tier, replaced Apple's best-selling position. In addition, Huawei's sales surged by 64% in the first six weeks, with a market share rising from 9.4% to 16.5%, surpassing Apple.
At present, the iPhone 15 series still uses 128GB of initial storage. For the increasing application and media content, this storage space has become insufficient, which has become one of the key points of roast from users in the Chinese market. The iPhone recently released a promotional video claiming that "there are too many masterpieces and too much space", stating that even the basic 128GB iPhone 15 can have "ample space to store massive photos" through cloud storage. Netizens have expressed that both cloud storage and upgrading memory mean a significant additional expense.
In February of this year, Apple released its financial results for the first quarter of the 2024 fiscal year (i.e. the fourth quarter of the 2023 calendar year) as of December 30, 2023. In the quarter, Apple achieved a revenue of $119.58 billion, a year-on-year increase of 2%, and analysts expected it to be $117.97 billion; In the first quarter, iPhone revenue was $69.7 billion, with analysts expecting $68.55 billion.
Compared to the global market, the performance of the Chinese market seems unsatisfactory. Compared to the same period last year's $23.905 billion, the revenue of Greater China in the quarter decreased by 12.91% year-on-year, far below the market's expected $23.5 billion, marking the worst first quarter performance since the beginning of 2020. Apple CFO Luca Mesteri expressed dissatisfaction with the decline in revenue in the Chinese market, but there are still significant long-term opportunities in the Chinese market.