As Apple continues to slowly raise its stock price after a year of mediocrity due to lackluster product releases, it has been injected with a new spark of life because of same the products but better. Products such as the new iPhone 5S and 5C are intriguing to new customers of the phone as well as those who are upgrading their previous ones. Customers are also flocking to stores looking for that new iPad Air which some of my family members have done already. But besides the domestic US market, the global market is endless.
As Apple targets China due to its growing population and middle class, it hopes to partner with a company that already has a customer base and allow them to sell their product. In recent news, Apple has announced that it will partner with China Mobile who is also the world’s largest mobile carrier. Following the announcement, Apple’s stock price raised 0.5% alone and it also helps that China Mobile has over 700 million subscribers. However, what does this partnership really mean for the Chinese market?
Currently, the Chinese mobile phone market is filled with many low end models as well as many android users. Apple has struggled to take away market share from Android and fared poorly with their iPhone 5C which directly targeted the Chinese market. However, this new partnership with Chinese Mobile is important on numerous levels.
As China moves into the future, they are expected to become the world’s number one economy. Within this, the population of China is aging along with the creation of a growing middle class. Apple is betting on many of these adopters of low-end devices to make the switch toward its products and display them as a status symbol for others to see. The world is continuing to become more global and Chinese youth are continuing to follow the trends of Americans. As more youth enter college and join the career force, they will have the disposable income to afford these trends around the world.
Speaking from a competitor’s standpoint, I would be worried about these trends occurring in China. This partnership will allow Apple to give even better deals to its current China Mobile subscribers and become a true force to compete against in this market. The effects of this partnership can also transfer to India in the future. India represents another market that is still continuing to grow in regards to their middle class and development status. On a related note, Apple’s iPad Air is beginning to release this Saturday in India which would further gauge the demand for their new products. If this launch is successful, no doubt that Apple would be following up and try to expand their mobile line into this territory.
While Apple is determined to keep rolling out the same product lines throughout the world, they believe that they have created a product that is still differentiated enough for people to continue purchasing. The question remains whether or not these growing middle classes value Apple’s products as they do domestically.