CEO's visit comes as Apple faces headwinds

2016-05-17 09:03Global Times Editor: Li Yan

App developers' event gives Cook chance to take pulse of mainland smartphone market

Apple Inc CEO Tim Cook is visiting China at a crucial time, with the U.S.-based handset maker facing headwinds in the world's largest smartphone market.

On Monday, Cook arrived in Beijing to attend a conference with a panel of Chinese app developers to seek further improvements for Apple's App Store. He also just bet on the country's largest ride-hailing service provider Didi Chuxing with a $1 billion investment announced on Friday.

Liu Qing, president of Didi Chuxing, Mu Rongjun, senior vice president of Meituan-Dianping, and photo editing app Meitu's founder Wu Xinhong took part in the panel, which was held at the Apple Store in Wangfujing, a busy shopping zone in Beijing.

One improvement they strongly suggested is that the App Store should add a function allowing developers to reply to users' reviews, according to a transcript of the conference obtained by the Global Times.

Cook was quoted in the transcript as saying that Chinese developers on the App Store have created $7 billion revenue to date, half of that in the past 12 months.

Cook said that Apple and the App Store can be a talent incubator.

China is a vibrant market, he said, and "I wish that I can have the chance to visit here frequently."

Cook has been to the nation many times already since he took the helm of Apple five years ago.

"The latest trip to China followed a quarterly weakening of sales of iPhones in the market, so his presence is intended to show that Apple attaches great importance to Chinese consumers and developers," Zhu Dalin, an industry analyst with Beijing-based market research firm Analysys International, told the Global Times Monday.

Apple's first-quarter revenue in China, its second-largest market by revenue, dropped 26 percent year-on-year to $12.49 billion, the sharpest among all markets.

Correspondingly, Apple slipped to fifth position in the first quarter from second place a year earlier, with an 11 percent share of the smartphone market by shipments, according to a report issued by Strategy Analytics in late April.

"Mixed demand for the iPhone 6s and stronger competition from OPPO and others were among the key factors for its lackluster performance," Linda Sui, director at the Boston-based market consultancy, said in the report.

OPPO, a lesser-known domestic brand, ranked second with a 12.6 percent share of the market in the first quarter, thanks to its innovations such as flash-charging technology.

Apple's handset sales in China will continue dropping "unless it comes up with some killer apps and features to make itself stand out amid the increasingly fierce competition of China's maturing smartphone market," Li Yi, a Shanghai-based independent IT expert, told the Global Times Monday.

Communicating with developers can help Apple get a better feel for the Chinese market and its bottlenecks, he said.

"Cook's visit may also be a promotional stunt, facilitated by Didi," said Li.

On Monday, Cook caught a cab in Beijing with Didi's president via Didi Chuxing, according to Cook's posts on Twitter and Weibo.

Zhu agreed with Li, adding that the investment in Didi, which has more than 300 million users, can facilitate Apple's diversification into autonomous-driving cars, a technological breakthrough that may help the US technology company woo users.

Zhu said that Cook also wants to deal with other hurdles in China like cybersecurity challenges and regulatory uncertainties.

Apple's entertainment services - iBooks and iTunes Movies - were shut down in the Chinese mainland in April, pending the local authorities' examination of their online content, according to media reports.

Cook is also expected to meet with local government officials in charge of propaganda, Reuters reported in early May, citing unidentified sources.

Apple couldn't be reached for comment on this issue on Monday.


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