There’s a lot to process in this 110 slide presentation on Apple’s China business. At its core, China is placing restrictions that are breaking the stickiness of Apple’s ecosystem.
From the China Channel presentation:
TO MOST CHINESE IPHONE USERS THE IPHONE IS JUST A LUXURY PHONE. THEY HAVE NO SIGNIFICANT INVESTMENT IN APPLE’S SERVICES ECOSYSTEM
APPLE’S CHINA SERVICE ECOSYSTEM HAS BEEN SYSTEMATICALLY STRIPPED AWAY BY LOCAL COMPETITORS
FROM APRIL 2016 IBOOKS AND ITUNES STORE HAVE BEEN BLOCKED IN CHINA. CHINESE AUTHORITIES ORDERED THEM TO BE TAKEN OFFLINE.
In most markets, Apple can depend on ecosystem loyalty. Most iPhone users would never even think of shifting over to an Android device. There’s brand loyalty, for sure, but there’s also ecosystem stickiness at work here. My photos, music, documents, etc., are all on my Apple devices, and I already have a great deal of expertise in using all this data, moving around the ecosystem. There’s little incentive to shifting over to Android.
According to this presentation, the Apple ecosystem stickiness is broken. For example, iMessage is hardly used in China. China is dominated by Android devices, iMessage is Apple device specific, spam is a huge issue, and WeChat is an entrenched tech in China, making it hard for iMessage to gain a foothold.
Can Apple overcome these obstacles? No doubt. But understanding the problems and retooling to overcome them is key.