Friday, January 11, 2013
Apple inc. (AAPL)'s CEO, Tim Cook, made some statements during an interview with Xinhua News Agency of China, that seem to indicate his belief that China will soon be Apple's number one market. The United States currently holds the top slot in Apple's list of revenue earners, however China is holding a close second at the moment.
"China is currently our second largest market," Cook is quoted as saying, according to CBS News. "I believe it will become our first. I believe strongly that it will." Cook did not specify when he expected China to surpass the United States in market share, and Apple Inc. spokespeople in the China office have not yet commented on the report.
During 2010 and 2011 Apple's sales doubled, although 2012 showed slightly slower growth. The iPhone, iPad, and other i-devices are very popular with China's upper class. However, the smartphone market in China is dominated by Google Inc. (GOOG)'s Android OS. The more affordable handsets by manufacturers like Samsung and HTC, as well as those made by Chinese companies, control the market.
Cook reportedly did not comment on whether the rumors that Apple Inc. is developing a new, more affordable iPhone are true or not.
While he was in China, Cook also met with the chairman of China Mobile Ltd., which is the world's largest carrier network, with more than 700 million customers. Apple has already struck a deal with China Mobile to begin offering the iPhone, and no doubt, this will be one of the biggest boosts for Apple's market share in China.
While the actual topics of discussion were not released to the public, the press was told that the two companies discussed "bilateral cooperation". China Mobile has also indicated that several million of their customers currently had unlocked iPhones on the network. These phones were most likely bought abroad and then brought to the country.
One of the biggest issues facing Apple Inc. in China is the accusations and scandal surrounding Terry Gou's Foxconn. Apple's largest supplier has been facing accusations of worker mistreatment and paying lower wages than average. Cook claimed that the Taiwanese company is being held to high standards regarding their workers. He said, "we care very deeply about every worker that touches an Apple product, whether they are making it, selling it, serving it, or marketing it." He went on to say, "we hold ourselves to a very high standard there."
Apple is also in talks with Taiwanese and Chinese companies to take over Samsung's current role of supplying the A6X processors for its devices. Due to the nature of the relationship between Apple and Samsung, the Cupertino company felt it would be wise to move its processor business away from its largest competitor. While Apple currently makes up 80% of Samsung's processor sales, the Korean tech giant will not be caught flatfooted when Apple finally moves their business elsewhere.
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