Apple's difficulty in garnering a larger share of the smartphone market in China has been looked at recently by The Wall Street Journal, which described the ubiquitous mobile app WeChat [Direct Link] as the iPhone's "toughest rival" in the country. Citing data from QuestMobile, on average WeChat is said to have captured nearly 35 percent of each user's monthly smartphone usage time, averaging about 1 billion monthly active users in total.

The problem for Apple is that WeChat is an entire ecosystem, with one app allowing users to pay for services, text, call cabs, watch videos, play mobile games, and access cloud-based "mini programs," or apps that don't need to be downloaded to a device to be used. Because all of these WeChat features are universal across smartphone brands, analysts speaking with The Wall Street Journal questioned whether or not Apple is "losing its edge" in China.

wechat itunes
Specifically, Apple saw a sales drop in Greater China (including Hong Kong and Taiwan) in the first half of this past fiscal year, with revenue falling 13 percent in the period. According to analysts looking towards the launch of the iPhone 8, that device's success "largely depends on sales in China."

Skeptical investors are asking whether consumers in China will pay $1,000 for a new iPhone, when they spend more than 60% of their phone time inside a system from Tencent or from rivals Baidu Inc. and Alibaba Group Holding Ltd. “That’s the question: Is Apple losing its edge?” said Katy Huberty of Morgan Stanley, who remains optimistic about Apple’s prospects in China.

Apple has been making moves recently to focus on China, including naming Isabel Ge Mahe as vice president and managing director of Greater China, who is said to ensure that Apple's products and services appeal specifically to China users. Just this weekend, Apple also removed VPN apps from the China App Store, a move that could potentially help Apple gain favor with Chinese authorities.

Some iOS 11 features -- such as the new QR code scanner in the Camera app -- are also seen as a way for Apple to appeal to users in China who are used to having these abilities on hand with WeChat. If Apple doesn't continue to bolster its software, solely relying on upgraded hardware changes might not be enough to convince iPhone users to stick around, according to analyst Ben Thompson.

Tailoring software for the market could be critical to keeping the iPhone competitive. Otherwise, Mr. Thompson wrote, Apple runs the risk that the phone’s appearance becomes the only thing that matters when Chinese consumers buy a new device.

Such a shift potentially would force Apple to overhaul its entire business model, moving to a system where it releases a new-looking phone annually rather than every other year, as it does currently.

In terms of market share, market research firm Warren Capital noted that Apple and the iPhone have taken fourth place in China, behind Oppo, Vivo, and Huawei. Apple dropped to fifth place in terms of smartphone devices shipped in Q4 2016 (with Xiaomi added into the mix along with the previously mentioned Chinese brands), and in April Kantar Worldpanel's data noted that iOS dropped to its lowest share of the China smartphone market since 2014.

Thompson points to WeChat as a major reason only 50 percent of China-based iPhone owners stayed with Apple when purchasing a new phone, while in other countries that number is closer to 80 percent on average. Since users spend so much time within WeChat and rarely see any other advantages to owning an iPhone, the app "has turned Apple into just another vendor in China," which analysts see as particularly problematic for Apple as the iPhone 8 launch grows nearer.

During a visit to China earlier in the year, Apple CEO Tim Cook told local media outlet Caixin, "We're not just someone who's here to access the market. We've created almost 5 million jobs in China. I'm not sure there are too many companies, domestic or foreign, who can say that." Ultimately, Cook said that Apple isn't afraid of the challenges it faces in China, telling the site that Apple is "here to stay."

Tags: China, WeChat

Top Rated Comments

nicho Avatar
47 months ago
It's time to make iMessage multiplatform.
It's too late. That would just give existing iOS users even less reasons to stick with iPhone.
Score: 6 Votes (Like | Disagree)
TwoBytes Avatar
47 months ago
Apple could pull WeChat from the app store but then face the backlash. If it's not pulled, the popularity of WeChat grows. It's a tricky situation.
Score: 3 Votes (Like | Disagree)
furqan8421 Avatar
47 months ago
Apple could pull WeChat from the app store but then face the backlash. If it's not pulled, the popularity of WeChat grows. It's a tricky situation.
If they did that then based on the article Apple would surely lose more ground in china

The app seems to be popular independent of Apple in which case people may feel that any smartphone capable of running it is good enough for them
Score: 3 Votes (Like | Disagree)
willmtaylor Avatar
47 months ago
I've always considered WeChat a backdoor for China to access users phones.
That’s because it is.
Score: 3 Votes (Like | Disagree)
szw-mapple fan Avatar
47 months ago
Apple could pull WeChat from the app store but then face the backlash. If it's not pulled, the popularity of WeChat grows. It's a tricky situation.
Apple doesn't have that kind of leverage in China. If WeChat is pulled, Apple can say goodbye to almost all of its sales in China.
Score: 2 Votes (Like | Disagree)
LordQ Avatar
47 months ago
It's time to make iMessage multiplatform.
Score: 2 Votes (Like | Disagree)

Top Stories

2021 mbp sd slot feature2

Kuo: New MacBook Pro Models With HDMI Port and SD Card Reader to Launch Later This Year

Monday February 22, 2021 8:52 pm PST by
Apple plans to release two new MacBook Pro models equipped with an HDMI port and SD card reader in the second half of 2021, according to analyst Ming-Chi Kuo, who outlined his expectations in a research note obtained by MacRumors. The return of an SD card reader was first reported by Bloomberg's Mark Gurman last month. "We predict that Apple's two new MacBook Pro models in 2H21 will have...
m1 mac mini

M1 Mac Users Report Excessive SSD Wear

Tuesday February 23, 2021 7:07 am PST by
Over the past week, some M1 Mac users have been reporting alarming SSD health readings, suggesting that these devices are writing extraordinary amounts of data to their drives (via iMore). Across Twitter and the MacRumors forums, users are reporting that M1 Macs are experiencing extremely high drive writes over a short space of time. In what appear to be the most severe cases, M1 Macs are sai...
iphone 12 pro display video

BOE Rumored to Supply iPhone 13 Display Panels After iPhone 12 Failures

Monday February 22, 2021 9:54 am PST by
Display manufacturer BOE will be one of the main suppliers of OLED panels for iPhone 13 models, according to a new report today from Taiwan's Economic Daily News. BOE is said to be working with touch panel manufacturer General Interface Solution (GIS), part of the Hon Hai Group to develop OLED panels. Multiple iPhone 12 rumors suggested that BOE would supply some panels for the devices,...
mac security privacy

Apple Takes Step to Prevent Further Spread of 'Silver Sparrow' Malware on Macs

Monday February 22, 2021 6:13 am PST by
Over the weekend, we reported on the second known piece of malware compiled to run natively on M1 Macs. Given the name "Silver Sparrow," the malicious package is said to leverage the macOS Installer JavaScript API to execute suspicious commands. After observing the malware for over a week, however, security firm Red Canary did not observe any final payload, so the exact threat to users remains a...
jon prosser imac 2021colors

Prosser: 2021 iMac to Come in Five Colors, Apple Silicon Mac Pro to Resemble 'Stacked' Mac Minis

Wednesday February 24, 2021 7:26 am PST by
Hit-and-miss leaker Jon Prosser has today alleged that the upcoming 2021 iMac models will offer five color options, mirroring the colors of the fourth-generation iPad Air, and revealed a number of additional details about the Mac Pro with Apple Silicon. In a new video on YouTube channel FrontPageTech, Prosser explained that the redesigned iMacs will come featuring options for Silver, Space ...
whatsapp privacy banner

WhatsApp Reveals What Happens to Users Who Don't Agree to Upcoming Privacy Policy Changes

Sunday February 21, 2021 1:11 am PST by
WhatsApp has revealed how it will gradually limit the features available to accounts held by users who do not accept the platform's impending privacy policy changes, due to come into effect on May 15. WhatsApp's new banner explaining the privacy policy changes According to an email seen by TechCrunch to one of its merchant partners, WhatsApp said it will "slowly ask" users who have not yet...
new airpods leaked image 52audios

Alleged Leaked Image Claims to Show Third-Generation AirPods and Case

Sunday February 21, 2021 2:49 am PST by
A new image claims to offer our first real world look at Apple's next-generation AirPods. The image, shared by 52audio, showcases both AirPods and the charging case for what the site claims to be the third iteration of the wireless earbuds. 52audio has in the past shared images claiming to showcase different parts of the third-generation AirPods. Most notably, the site in November shared...
anker magsafe powercore battery pack

Anker Releases MagSafe-Compatible Battery Pack for iPhone 12 Lineup

Tuesday February 23, 2021 7:49 am PST by
Following rumors that Apple is working on a MagSafe battery pack for iPhone 12 models, popular accessory maker Anker has beaten Apple to the punch with the release of its PowerCore Magnetic 5K Wireless Power Bank. First previewed at CES 2021, the PowerCore battery pack magnetically attaches to the back of any iPhone 12 model and provides 5W of wireless charging. With a 5,000 mAh capacity,...
iPad Pro Mini LED

New iPad Pro and MacBook Models With Mini-LED Displays Again Rumored to Launch This Year

Monday February 22, 2021 9:32 pm PST by
Taiwanese company Ennostar will begin production of Mini-LED backlight units for an upcoming 12.9-inch iPad Pro in the late first quarter or second quarter of this year, according to industry sources cited by DigiTimes. Ennostar is a holding company that was jointly established in January 2021 by LED-related manufacturers Epistar and Lextar Electronics. Apple is expected to unveil the new ...
14

iOS 14.5 to Make Zero-Click Attacks 'Significantly Harder'

Monday February 22, 2021 9:05 am PST by
Apple's impending iOS and iPadOS 14.5 update will make zero-click attacks considerably more difficult by extending PAC security provisions, according to Motherboard. Apple has made a change to the way in which it secures its code in the latest betas of iOS 14.5 and iPadOS 14.5 to make zero-click attacks much harder. The change, spotted by security researchers, has now been confirmed by...