The Chief Executive Officer of Apple, Tim Cook, recently visited China and there are now reports that Apple intends to increase their investment in the world’s most populous country. This is being done since the forecast that Apple had predicted regarding the opening of new stores has not happened yet. There is an increasing demand for Apple products in China and Apple Stores haven’t been able to meet it yet. According to Apple spokespeople in China, Cook was involved meetings with a number of high-up Chinese officials via telephonic conversations. Cook also visited the Xidan Shopping area in Beijing and took photos with fans outside the Apple Stores there.
According to Tim Cook, China is the second largest market for Apple after the United States. Chinese telecom carriers have only just started carrying the iPhone officially, and demand for Apple products is sky high. When the iPhone 4S was released a few weeks ago in China, such was the interest that eager customers started pelting store employees with eggs when the launch was delayed slightly. Cook admits that the company had not expected such a staggering response from consumers in China, and said that the company intends to make amends by increasing the number of stores there immediately.
According to David Wolf, CEO of a marketing strategy firm based in Beijing, Apple has performed rather well despite the small number of stores that they have been able to set up. In his opinion, their biggest challenge would be to replicate their retail model (which they introduced in the US) in China as well. This is now a test phase for Apple, and the company is looking to expand fast. Apple has only six stores in China, with three in Shanghai itself. That’s less than a quarter than what Ron Johnson (Head of Retail, Apple) had predicted two years ago.
According to Cook, China is a market they cannot ignore and they are planning for greater growth in the country. They are also trying to increase the number of staff in existing Apple Stores. According to most customers, there is not enough staff to manage the demand effectively. Apple is also considering setting up more manufacturing and research facilities in China. Currently, Apple devices are manufactured in China by Foxconn Technology Group.
China’s biggest problem is that the carriers do not offer the iPhone with service contracts (unlocked phones are the norm in the country). Also, the home-grown 3G network in China is not compatible with the iPhone modem. 3G incompatibilities notwithstanding, there are still over 20 million users in China running the iPhone on 2G speeds. However, the next generation 4G network in China is expected to be compatible with the iPhone 4S, which should come as great news for users.