We are now living in the last days of the USA being the biggest power on Earth. Buried under a tremendous amount of debt and a continuing struggle to understand which direction to take in order to stimulate growth, American companies are now looking at the ‘East’ for solutions. KitGuru analyses the data and considers if Apple is planting seeds in the right part of the Earth for future harvest.
Tim Cook, Apple CEO, has told China’s Xinua News Agency that China will not be the second largest market for long. Apple fully expects that China will yield the single biggest chunk of its sales in no time at all.
To give you an idea of the scale of the opportunity, China Mobile is the world’s biggest mobile phone company – and it DOESN’T offer Apple products at the moment. For Tim to court/win business with China Mobile is like McDonald’s deciding to switch from Coke to Pepsi.
KitGuru has already reported on the move to make Apple iPhone products and accessories cheaper. Perfect preparation for entering an enormous market where salaries etc will, overall, be lower. That kind of product adjustment shows that Apple knows what it will take to hit China and hit it hard.
Remember, Apple is not only interested in pushing iPhone into China. It will also be very keen on the idea that hundreds of millions of new subscribers to the ‘Apps Culture’ will start to spend small amounts every month on tiny, but cool, bits of software.
So what can Apple do to ensure this smooth entry?
Well it will need to be able to put products in front of people. One of the biggest successes for Apple in the West is that its ‘store oriented’ approach has flown in the face of dwindling economies where recession has forced Comet, Jessops, Woolworths etc into administration. KitGuru expects Apple to unveil plans for something like 100 new stores in key locations around China.
You need to be in bed with the largest reseller in the country – and Tim is doing that right now as he plays fiscal footsie with Yu Lei, President of China Mobile.
Also, Apple’s products will need to be cheap in order to gain penetration. Which the new ‘Plastic iPhone’ will be.
The one thing that Americans can be reassured by, is that their leader has been contemplating a future ‘post America’ for quite some time – so, hopefully, the next round of stimulus/austerity in the USA will help create a better future in a world dominated in every physical way by China.
KitGuru says: Sounds like a 1-2-3 for Apple in China. If the deal with China Mobile, the production of cheaper iPhones and opening of ~100 stores all go ahead before the end of 2013, then Apple’s stock price will shoot up even higher.
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