Apple to add more sales outlets in China

Firm tries to revive growth by expanding sales outside of country's largest cities

PUBLISHED : Thursday, 31 October, 2013, 2:57am
UPDATED : Thursday, 31 October, 2013, 2:57am

Apple chief executive Tim Cook is working to broaden the company's distribution in China as a way to reignite growth after the iPhone maker reported its first decline in annual profit in at least a decade.

Cook said Apple is expanding how it sells the iPhone and iPad in China, focusing on areas outside the country's largest cities. The firm is adding more outlets besides Apple stores to sell its devices, and the iPhone is now available in 50 per cent more stores in the country than last year, he said.

Apple's sales in China rose 6 per cent in the recent quarter to US$5.7 billion, making it the company's second-biggest market after the US. Yet it lags behind Samsung Electronics and local manufacturers which offer cheaper smartphones and tablets with more design choices than the iPhone and iPad.

China is critical as Apple seeks to jump-start sales and profit growth, which have stalled in the increasingly crowded mobile market.

Apple's "one-size-fits-all" approach was more challenging in China, said Robin Li, a co-founder and chief executive of Baidu, China's largest search engine.

It would take more than new stores to pull customers, Li said.

Mobile phones needed to be more customised for the Chinese market, and buyers in the country tended to prefer larger screens and the ability to personalise their devices with software tools to tap out messages more quickly in Chinese, he said.

"Chinese characters are very different from English - you need an input method engine to do that," Li said. "Apple does not have a good one, and they do not allow good ones to be uploaded in the App Store."

Baidu, with more than 20,000 employees, manages about 80 per cent of China's search-engine queries and is working to make its service more accessible for the 464 million customers in the country that log on to the internet from a mobile device.

Devices running Google's Android software dominate the mobile-computing market in China, according to Li.

Worldwide, Android will have 75 per cent of the smartphone operating-system market this year, compared with 17 per cent share for Apple's iOS software, IDC estimates.

Like many Chinese customers, Li said he uses a Samsung Note smartphone because it has a larger screen than an iPhone. At the same time, Li also complimented Cook for appreciating the size of the Chinese market.