Apple's China Strategy: 10 Reasons Other IT Companies Should Pay Attention

 
 
By Don Reisinger  |  Posted 2012-03-29 Email Print this article Print
 
 
 
 
 
 
 

NEWS ANALYSIS: Apple CEO Tim Cook has been in China meeting with the country’s political and business elite. But what is Apple's overall plan for a country that holds huge potential for its products such as the iPhone and iPad? Why should other companies pay attention?

Much has been made about Apple CEO Tim Cook€™s visit to China this week. Nearly everywhere he goes, Apple fans and reporters are wondering why he€™s there and what he€™s discussing. Meanwhile, Apple has only said that the chief executive has met with the government officials, declining to provide more details on his schedule and whether he€™ll be making an appearance in many other places.

However, Cook has been spotted at China Mobile offices and reportedly visited a company factory to ensure everything was going smoothly there. He also went to an Apple Store in Beijing to talk with employees. Although Cook is a chief executive of an American company, he€™s being followed like he€™s a country€™s leader visiting China and being given the red carpet treatment to see how things are going across the country.

But there€™s a reason for that. As Tim Cook himself has said, China is vastly important to Apple, and in some ways, Apple is vastly important to China; both parties have a mutual need for each other.

The questions then are: What is Apple€™s overall strategy in China, and why should other IT companies pay attention?

1. Mobile device usage is skyrocketing

The sheer number of mobile device connections in China might shock you: 1 billion. In other words, there are 1 billion devices connected to mobile networks around the country. Apple, meanwhile, is delivering the world€™s most sought-after smartphone. See why China is so important to Apple (and should be to other companies)?

2. The population is going after technology

There was a time in China when only those living in big cities like Beijing and Shanghai were using technology. But as the economy in the country grows and more people have disposable income, they€™re turning to tech goodies. Apple knows that, Apple wants to capitalize on that, and it wants to take advantage before others do.

3. Few companies are dominating industries

Following that, it€™s important to point out that, aside from the Web, few companies are dominating any industry in China. The mobile space is very much up for grabs, as is the computing market. Apple has the cash to invest in those areas and start appealing to customers. And if it€™s lucky, it might just be able to corner those markets before any other firms move in.

4. China Mobile. Period.

Following on the mobile theme, it€™s important to note that Apple currently works with two Chinese carriers€”China Telecom and China Unicom. And although both carriers are sizable by U.S. standards, they€™re dwarfed by China Mobile, which is 660 million subscribers strong. Apple has been trying to woo China Mobile for years, but so far, has failed. Is Tim Cook€™s visit designed to change its luck? Perhaps.



 
 
 
 
Don Reisinger is a freelance technology columnist. He started writing about technology for Ziff-Davis' Gearlog.com. Since then, he has written extremely popular columns for CNET.com, Computerworld, InformationWeek, and others. He has appeared numerous times on national television to share his expertise with viewers. You can follow his every move at http://twitter.com/donreisinger.
 
 
 
 
 
 
 

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