Apple in China: Building an Apple Chain Empire from Production to Market

Apple in China: Building an Apple Chain Empire from Production to MarketBesides the American and European markets, Greater China, with China as its core, is one of Apple's most important battlegrounds. Especially in Apple's core consumer business, the Chinese market holds irreplaceable value

Apple in China: Building an Apple Chain Empire from Production to Market

Besides the American and European markets, Greater China, with China as its core, is one of Apple's most important battlegrounds. Especially in Apple's core consumer business, the Chinese market holds irreplaceable value. Just at the recently concluded iPhone 16 Series launch event, Apple showcased Tencent's TiMi Studio's latest mobile game, "Honor of Kings: World," alongside the iPhone 16 Series. Many netizens hailed it as a mobile game masterpiece that rivals "Genshin Impact." This not only promotes the new iPhone 16 Series, but also hints at the strong and close relationship between Apple and Tencent, unaffected by the previous WeChat commission issue. After all, the Chinese region is a crucial market for Apple, and Apple is an important partner for Tencent. Nothing is beyond discussion for both parties.

So, besides collaborating with important partners like Tencent to push new products and games, what other efforts has Apple made to solidify its success in the Chinese market?

From Production to Sales: Apple's Long Journey in the Chinese Market

Apple's connection with the Chinese market dates back to the production and manufacturing of its products. Many of Apple's consumer products, including iPhone, Mac, and iPad, are manufactured in China. Notably, the quality of iPhones produced in China is widely recognized by consumers globally. Over half of Apple's supply chain comes from China, solidifying its vital role in Apple product production and manufacturing.

However, Apple's journey in the Chinese market, from production to sales, has been a lengthy one.

2009: China Unicom Introduces iPhone 3GS, Opening the Door to the Chinese Market

Back in 2007, when the first-generation iPhone was released overseas, it was already being brought into China through various channels. Due to overwhelming market demand, prices were inflated to over 10,000 yuan. The official iPhone for China didn't make people wait too long. In 2009, China Unicom emerged victorious in the competition among the three domestic mobile carriers, officially introducing the official iPhone 3GS in China through contract plans.

China Unicom customized different packages to attract consumers with the iPhone 3GS as its trump card. The initial batch of iPhone 3GS contract phones lacked Wi-Fi functionality, further boosting China Unicom's fledgling 3G network business. This collaboration resulted in a win-win situation for both Apple and China Unicom, marking the official entry of the Apple iPhone into the mainland Chinese market.

From Chaser to Leader: China Becomes the Largest Single Market for iPhones

China gradually transitioned from being the second and third batch of regions to receive Apple iPhones to becoming a launch region for new products. Chinese consumers became some of the first globally to experience and purchase Apple's latest products. According to TechInsights, in the second quarter of 2023, China officially surpassed the United States to become the largest single market for iPhone shipments. The significance of the Chinese market is undeniable. To this end, in addition to Apple CEO Tim Cook's increasingly frequent trips to China to discuss business, Apple Stores are becoming more numerous in China.

Offline Experience Layout: 57 Apple Stores Across Greater China

In July 2008, Apple chose to open its first official Apple Store in China in Sanlitun, a commercial hub in Beijing. It serves as a key platform for Apple to offer local consumers product experiences, repairs (Genius Bar), and free courses (Today at Apple). People can immerse themselves in Apple's products and services without any purchase pressure. PConline previously had the opportunity to experience Apple's latest VisionPro device at the Apple Store in Guangzhou.

As of August 2024, there are 57 Apple Stores in Greater China (47 in mainland China, 6 in Hong Kong, and 2 each in Macau and Taiwan), accounting for about 10% of Apple Stores globally. Beyond the number, the Sanlitun Apple Store, for example, was redesigned based on Apple's new store standards in 2020, with a new store built next to the old one, doubling its size.

This March, the Shanghai Jing'an Apple Store opened, spanning 3,835 square meters and with an investment exceeding 83.4 million yuan. It marks the 57th Apple store in Greater China and the largest Apple Store in China, even across Asia. It is also Apple's second-largest store globally (after the Apple flagship store on Fifth Avenue in New York), highlighting Apple's focus on the Chinese market.

Localized Product Experience: Meeting Chinese User Habits

In the core product experience, Apple has continuously made efforts to understand and satisfy the preferences and habits of Chinese users. For instance, Apple incorporated support for the lunar calendar in its iOS 8 update back in 2014, specifically for the Greater China region. iOS 8 also opened up support for third-party input methods, allowing users to freely choose between built-in, Sogou, QQ, Baidu, and other input methods, greatly facilitating users who prefer Chinese input methods. Previously, users could only install third-party input methods after "jailbreaking" their iOS devices.

Furthermore, Apple has partnered with AutoNavi Maps to provide precise navigation services, integrated with domestic payment platforms like Alipay and WeChat Pay. This makes the iPhone more user-friendly in China. Currently, Apple's iCloud cloud services are also provided by Cloud Upper Guizhou, ensuring service stability and data security. Apple's recently promoted Apple Intelligence (AI) feature might potentially collaborate with Chinese tech companies like Baidu in the future to provide localized AI service for official Chinese iPhones, iPads, and Macs.

Key Component of the Apple Chain: The Value of the Chinese Supply Chain

During his Shanghai trip in March, Apple CEO Tim Cook stated, "For Apple's supply chain, I don't think there's a more important place than China." China remains a crucial part of the Apple Chain, covering components like optics, chips, sensors, batteries, and molds, as well as being Apple's core production base. Moreover, China has become a vital partner for Apple in content ecosystems and services, including games and various app applications.

Driven by Commercial Interests: Competition and Cooperation in the Chinese Market

Undeniably, Apple's focus on the Chinese market stems from its commercial interests. However, in an open and competitive market, Apple can ultimately win over consumers only through the strength of its products. Furthermore, Apple's products and business model continuously stimulate the development of domestic counterparts. The maturity of companies within the Apple Chain has provided support for the entire tech industry in terms of upstream technologies and talent.

Dual SIM, Lunar New Year Films: Apple Tailors to Chinese Market Needs

In terms of the products themselves, starting with the iPhone XS and iPhone XR in 2018, Apple has offered a special dual-SIM version for the mainland Chinese market, meeting the needs of mainland Chinese users for two physical SIM cards. It's worth noting that in recent years, Apple has gradually been pushing for the adoption of eSIMs, which lack physical cards, to save valuable space within the phone. Even beginning with the iPhone 15 series, the US version has adopted dual eSIM design. Other countries and regions mostly offer a combination of single physical SIM and eSIM. Only mainland China and a few other countries/regions provide dual physical SIM card design.

Anyone who follows tech and digital circles is likely familiar with Apple's "Lunar New Year Films." From 2018 to 2024, Apple consistently released new year short films shot with iPhones leading up to the Lunar New Year. These films, including "Three Minutes," "A Bucket," "Daughter," "A-nian," "Return," "Five Passes," and "Garlic Sprout," boast impressive casts and crews, seamlessly blending technology with Chinese traditional festivals. They have become a designated program in the tech world before the Lunar New Year, inspiring other brands to imitate this Lunar New Year film approach.

Apple's Continuous Efforts: Can It Do Even Better in the Future?

In the face of intense competition in the domestic smartphone market, while Apple strives to improve brand recognition and product competitiveness, it's becoming increasingly adept at understanding the Chinese market's playing style. For example, Apple's Back to School offer was introduced to mainland China in 2019. In recent years, during the Double 11 event, Apple's official Tmall flagship store has offered surprise coupons and discounts. The new iPhones released that year could even be discounted by around 500 yuan. This year, Apple launched a promotional season in March and achieved notable results.

Apple has already made considerable effort in the Chinese market. However, with the constant internal competition among Chinese manufacturers, Apple still has room to strive for even better performance in the future. What do you think of Apple's performance in the Chinese market? Share your thoughts in the comments!