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Apple’s China Problem

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Re: Apple’s China Problem

#41

Post by mikhailt »

dilemma wrote: post #7
macintux wrote: post #4

Earlier quoted context omitted.

He's not saying that Apple has a monopoly on smartphones; he's saying it has a monopoly on iOS. His overall point is that while iOS has a strong lock-in effect for people already on the platform, in China the real platform is WeChat, so the iOS monopoly isn't as useful.

No, he is saying that Apple has a smartphone monopoly in the quoted paragraph.

From the beginning of the article, which defines the rest of the them:

> Moreover, the advantages go beyond margins: the best way to understand both Apple’s profits and many of its choices is to understand that the company has a monopoly on not just MacOS but even more importantly iOS. That means Apple can not only capture consumer surplus on hardware, but developer surplus when it comes to app sales; that some apps are not made is deadweight loss that Apple has chosen to bear to ensure total control.

Re: Apple’s China Problem

#43

Post by anjc »

ForrestN wrote: post #35
anjc wrote: post #32

> hardware differentiated by software such that said hardware can be sold with a margin much greater than nominal competitors running a commodity operating system. Apple's hardware is not differentiated by software. Their creaking software is an ancillary requirement to use their excellent hardware. If their software was their differentiator then Hackintosh's would be more widely used. Secondly, OSX is a commodity op…

While you may find it creaking, myself and many other people find the experience of using Apple software far better than any competing systems. I wouldn't work somewhere that asked me to use Windows. For me, and maybe I'm overly aesthetically sensitive, it would make my day to day life much worse. This is just to say that the authority with which you dismiss Apple's software as a point of differentiation is probably…

Differentiation also has a precise meaning in literature, and just feeling that software which comes free with Apple hardware is better than other software doesn't indicate product differentiation or a differentiation strategy. That's just personal preference.

I'm not saying that you don't/shouldn't genuinely and rightly prefer Apple software, I use Apple devices every day myself. That being said, I'd hazard a guess that you wouldn't use OSX on a Dell as your primary machine? Or iOS on a cheap Android if that were possible?

Re: Apple’s China Problem

#44

Post by mikhailt »

Devid2014 wrote: post #10
staticelf wrote: post #2

> None of that lock-in exists in China: Apple may be a de facto monopolist for most of the world, but in China the company is simply another smartphone vendor, and being simply another smartphone vendor is a hazardous place to be. Don't get that part. I live in Europe and sure a lot of people has an iPhone but I believe strongly that more people have an Android. Doesn't Android have like 80% or more of the world mark…

"Apple may be a de facto monopolist for most of the world" May this is how some peoples from USA see Apple ? But here in EU Apple is just another smartphone vendor and most peoples are using Android.

From the very beginning, it is clear what the author was talking about:

> Moreover, the advantages go beyond margins: the best way to understand both Apple’s profits and many of its choices is to understand that the company has a monopoly on not just MacOS but even more importantly iOS. That means Apple can not only capture consumer surplus on hardware, but developer surplus when it comes to app sales; that some apps are not made is deadweight loss that Apple has chosen to bear to ensure total control.

Re: Apple’s China Problem

#45

Post by jordanlev »

tormeh wrote: post #39

So WeChat did what Java couldn't do: Build an abstraction that made OS irrelevant client side. I guess you could say that the browser has done this too, but not fully, I guess.

The browser absolutely did this -- just compare the importance and dominance of MS Windows in the late 90's / early 00's to today.

Re: Apple’s China Problem

#46

Post by ctvo »

dilemma wrote: post #37
xiaq wrote: post #18

Earlier quoted context omitted.

I agree with the first part, but the article has a point on WeChat. It is a very good example of how app vendors have stronger brands while smartphones are seen as commodities in China.

No, the article contradicts itself and makes an incorrect claim. First, it says that iPhones are bought as statement pieces, ie their hardware. Then, it says iPhones aren't as popular in China because Androids can use WeChat too. These are incompatible claims.

They are not incompatible claims.

People buy things for multiple reasons. The point of the article is Apple has a problem, one of the reasons, iOS, isn't applicable in China due to WeChat being the dominate platform (and works on all devices).

The author circles back to mention that it doesn't mean Apple is eliminated from that market since they still have other differentiators (status symbol).

Re: Apple’s China Problem

#47

Post by Kurtz79 »

yabatopia wrote: post #16

I don't know if most people really consider the OS to be that important anymore, as the author strongly believes. The Windows Surface Laptop is no threat to Apple because it doesn't run macOS. Samsung's smartphones are no threat to Apple because the phones don't run iOS. Then he continues with the WeChat factor to explain the shrinking market share of Apple in China. If you consider China the trendsetter in tech, tha…

Fair point.

As long as your most used apps area available on more platforms, and those are more or less equal in terms of features/performance/usability, on which platform they run it shouldn't make a big difference.

The author says "WeChat it's not Whatsapp/Facebook/Twitter", but even in there is not such a centralized service outside of China, most of the same uses are covered by ubiquitous apps.

Re: Apple’s China Problem

#48

Post by sortaThrowaway »

naskwo wrote: post #33
imron wrote: post #30

Earlier quoted context omitted.

> but I believe strongly that more people have an Android. If you go by people, Android has more market share. If you go by profit, iOS has more market share. https://www.macrumors.com/2017/03/07/apple-global-smartphone... > None of that lock-in exists in China This is true. If all your friends and family use iMessage and PhotoStream, then once you start using that too it creates lock-in specifically tied to software…

Try www.famipix.com - we'll be launching a React Native app (iOS & Android) soon, for platform-independent, no BS photo sharing.

from your page: >No facial recognition. No public search. >We do not index faces nor do we allow external search engines >to index your photos.

might move that up to #2 point. add in no creepy facebook like face features storing (worded better) to drive home the point

Re: Apple’s China Problem

#49

Post by mikhailt »

This seems to confuse some people, the author is not saying Apple have a monopoly on smartphones. What the author is talking about is the locked-in ecosystem that Apple owns, iOS and macOS (watchOS/tvOS).

> Moreover, the advantages go beyond margins: the best way to understand both Apple’s profits and many of its choices is to understand that the company has a monopoly on not just MacOS but even more importantly iOS. That means Apple can not only capture consumer surplus on hardware, but developer surplus when it comes to app sales; that some apps are not made is deadweight loss that Apple has chosen to bear to ensure total control.

The problem that Apple is having in China is that WeChat is the driving "platform" ecosystem, not the OS or the brand.

In other words, people aren't buying iPhones for its integration with Apple services in China, which could lead to an increase in growth due to the halo effects. Instead, they run WeChat and they buy things through there, which leads to no growth in Apple's services and revenue. Which also means, the customers have no desire to buy another Apple device. They can do the same on any device that can run WeChat.

If Microsoft sells a Windows Phone with WeChat as the default app for everything, they may have a hit in China but it would not be a sustainable hit because again, WeChat can run on iPhone or Android or any other OS.

Re: Apple’s China Problem

#50

Post by endorphone »

rm_-rf_slash wrote: post #21
yabatopia wrote: post #16

I don't know if most people really consider the OS to be that important anymore, as the author strongly believes. The Windows Surface Laptop is no threat to Apple because it doesn't run macOS. Samsung's smartphones are no threat to Apple because the phones don't run iOS. Then he continues with the WeChat factor to explain the shrinking market share of Apple in China. If you consider China the trendsetter in tech, tha…

Are you kidding? It's like every other day we hear about a new Android exploit or security flaw. At least Apple is committed to strong encryption and privacy. The OS - and the hardware integration - is an enormous selling point to me. As much as I oppose Apple's direction as of late for many business decisions (iPhone 7 headphone jack for example), the reasons stated above are why I still cannot see myself switching.

It's like every other day we hear about a new Android exploit or security flaw

Aside from the absurd exaggeration, you're vulnerable to clickbait journalism. Extraordinarily few of those "exploits or security flaw"s had any material impact on the market at all, seldom having a practical or real world exploit. Instead it's a theoretical by some security group looking for some free press.

They're a couple of good platforms. Rhetoric online isn't useful.

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