Apple's exclusivity may be its downfall in China

  • Technology
  • Monday, 21 Aug 2017

Apple and Samsung are under pressure to showcase innovation in China.

BEIJING: When it comes to app innovation in China, one brand stands out above all else for having won over the hearts and minds of its users. Tencent Holdings is behind the two most popular instant messaging apps in the world's largest consumer market, not least because of the myriad of activities they offer on a single platform.

Over and beyond texting, the apps enable their users to shop online, detect nearby users, watch videos, play games and even order food or book a taxi.

Figures released by Tencent's research division, Penguin Intelligence, revealed that in the fourth quarter of 2016, there were 898 million and 868 million WeChat and QQ users respectively. 

That still trails Whatsapp's 1.2 billion active users, but considering that the vast majority of WeChat and QQ's following is in China, it's enough to show that Tencent has a stranglehold in the domestic messaging market.

All this is bad news for Apple, which is looking to China as its most promising growth market.

WeChat's convenience and ability to integrate many different app services into one single platform means that Apple's greatest strength - its unique ioS ecosystem - is no longer as attractive to users.

WeChat and QQ do not run on Apple, and given the price premium of the latter's iPhone in the smartphone market, Apple is feeling the pinch of being both outpriced and outclassed by cheaper Android phones.  According to the Financial Times, Apple's revenues in Greater China have fallen for six consecutive quarters, with a 10% drop in its latest quarter announced earlier this month.

Apple's habit of exclusivity is serving to be more of a hindrance than a strength in the China market, as noted by the Financial Times. 

Recently, Apple was excluded from Beijing's public transit payment system because the former would not grant access to third-party apps such that belonging to Yikatong, China's public transport payments company, or Tencent's WeChat Pay and Alibaba's Alipay.

Android phones, with fewer restrictions on what apps they can run, have no issue with utilising the services of the abovementioned Chinese payment service providers.

Apple may have got this far on the premium and novelty it places on its technology and design aesthetic - the idea that it stands out from the rest - but in China at least, it seems that conformity, connectivity and convenience may be the smarter way to go.
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