Advances in Economics, Business and Management Research, volume 211

Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)

The Market Strategies of Apple in China

Bingyan Lu
Malvern College Chengdu
*Corresponding author. Email: [email protected]

ABSTRACT
The purpose of this paper is to find the Apple' marketing strategies in Chinese market, one of the most successful
smartphone brands in the world. This paper will give the details of Apple marketing strategies in China, a marketing
strategy refers to a business's overall game plan for reaching prospective consumers and turning them into customers of
their products or services. A marketing strategy contains the company’s value proposition, key brand messaging, data
on target customer demographics, and other high-level elements. A thorough marketing strategy covers product, price,
place, and promotion. The methodology is literature review that the market strategies in China and why Apple can keep
the lead in China smartphone market. Apple had use a good market strategy, whether in attracting customers or selling
the product.

Keywords: Apple, Market strategies, Chinese smartphone market.

the iPhone 4 is an Apple mobile phone that makes

1. INTRODUCTION Chinese customers crazy. This is due to the desire for the
latest technology. October 28, 2021 Apple today
Apple is the biggest phone producer in the world, it announced the results for the fourth quarter of fiscal year
has companies in most countries, and this essay will 2021 ending September 25, 2021. The company
discuss the market strategies in China. In China, the announced that its September quarter revenue reached a
smartphone market has developed rapidly in recent years, record US$83.4 billion, a year-on-year increase of 29%,
whether it is domestic or foreign products. Competition and its diluted earnings per share for the quarter were
in the Chinese mobile phone market is also increasing, US$1.24.
but Apple still in the first place, so whether it is from
product quality assurance or marketing strategy, Apple is 2. PRODUCT STRATEGIES OF APPLE IN
still in a leading position. BUSINESS
In April 1976, Steve Jobs, Steve Wozniak, and
Ronald Wayne founded Apple. In January 1977, the According to the Yang Ying’s essay on the marketing
company’s name was officially identified as Apple strategies of Apple iOS product for business in China,
Computer, Inc. The first time Apple sale their product realize the marketing strategy of enterprise application
was On October 30, 2009, China Unicom’s iPhone 3G product portfolio[2]. IBM and Apple reach an agreement
was officially launched on Beijing Shimao Tianjie. When they can provide the data calculate for company or the
Apple first entered the Chinese market in 2009, its brand business, as a result we can see the most of bank,
awareness in China was not high. The author thinks the insurance and finical industries they use Apple more than
main reason is that the iPhone 3GS product itself does not other technology companies’ products. According to
have strong appeal. And there are no characteristics, and Baker and Hart(2007) stated that the product strategy
there are relatively backward places. One point behind is defines what your product should achieve and how that
that it does not support WiFi. Because 2009 is an help firms to contribute their profit[3]. The product
important stage of my country's WiFi development, after strategy is composed of a variety of sequential process in
all, it is a technology that is about to be introduced, so order for the vision to be effectively achieved. The
many people are looking forward to it. company must be clear in terms of the target market of
the product in order for them to plan the activities needed
The iPhone 4 was really hot. When Jobs opened the in order to reach the destination and to achieve its goals.
screen, the whole world was excited. It can be said that

Copyright © 2022 The Authors. Published by Atlantis Press International B.V.

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Wei, et al. mention about the product strategy for After Apple store brought to China, the quality of
Apple in essay[4]. “The adhocracy firm values service has improved a lot, and Apple could use the
innovation, novelty, and creativity as well as risk taking. personalized service to attracting customer. And Apple
These traits can operate independently of market will be training their staff.
responsiveness, motivating adhocracy firms to make
The second sales channel is online store. In recent
product strategy changes as they fit. For example, over
years, online shopping APP is constantly developing and
the years Apple has introduced a range of radically
improving, the APP like Taobao and Jindong all have the
innovative products that, for the most part, have
apple store, customer can buy the products on the Apple
succeeded and set the trend for the industry to follow”
official website, which save the time on choosing mobile
phones in the store and the time travelling to the shop.
2.1. Product Ecological Chain After the release of iPhone 13, more than 3 million people
An ecosystem is defined as a biological community booked the iPhone 13 series on Tmall, and according to
of interacting organisms. In tech terms, this means a the Jindong, Chinese consumers have booked more than
group of devices with software to create one collaborative 2 million new Apple iPhone 13 series products on
network. Many companies use this to create a ‘family JD.com, because there are too many people want to buy
the iPhone 13 online, Apple's official website was unable
’ of products but no company have mastered it like
to connect to the apple store page or stuck.
Apple with the Apple Ecosystem.
The third sales channel is the agents, and those agents
Third-party products are not usually compatible with
are the controller of T2 dealer, T2 dealer cannot book the
Apple products and all products belonging to Apple
products from the Apple, they need to book the products
portfolio work well with each-other. At the same time,
from those agents.
the ecosystem of Apple is much more than just a
collection of more than 1,5 billion active devices or The other sales channel is the three major operators,
services that work seamlessly[5]. China Mobile Communications Group Co., Ltd, China
Telecom, and China Unicom, Apple will provide the
We all know the Apple's product ecosystem is one of
customize phone to the three major operators. Because
the best among all technology companies. iPad, iPhone,
these three companies, the Apple could become so
iMac, MacBook, iWatch… the user can use iClouds to
popular in China, at first the Apple only cooperate with
save the documents on one type of products and the user China Unicom, when Apple see the benefit, they choose
can see or use it on the other products, because the to cooperate with other two operators, so Apple use the
iClouds is a private cloud space makes it easy for Apple three major operators cultivated many loyal customers.
users to share personal data between different devices.
The consumer will consider the convenient and the
4. PRODUCT SALES
quality of the technology product, most Apple user are
students or office worker, so they can use the ecological According to the financial report released by Apple at
chain of Apple mobile phones to quickly transfer files and the end of October last year, in fiscal year 2020, the
data which can save the time to find the data line. For company's revenue was 274.515 billion U.S. dollars
example, airdrop, Apple TV, face time, iCloud, AirPlay (about 1.770 billion yuan), an increase of 5.51% from last
and other[6]. Air Drop can send the documents straight to year; net profit was 57.411 billion U.S. dollars (about
other Apple devices of others, steps such as copying and 370.3 billion yuan). RMB), an increase of 3.9% year-on-
mailing are omitted. Apple made a lot of things year. In terms of growth rate, Apple's business growth has
convenient for consumers, so consumers will be attracted been slow in the past two years, and the growth rate of
by the Apple products, and consumers will become Apple revenue and net profit has fallen to single digits.
fan.
From the perspective of the main business, the iPhone
3. SALES CHANNELS mobile phone is still Apple ’ s largest business,
accounting for 50.2%; followed by the service business,
According to the essay ‘ Research on Apple ’ s accounting for 19.6%, including advertising, AppleCare,
marketing strategy in China’ written by Wei Qingxian digital content, iCloud and other businesses; again,
there are five types sales channels 1[7]. Apple store, wearable devices, The household equipment and
Apple store is set up by the Apple American and in 2008 accessories business accounted for 11.2%; the rest were
the first Apple store was set up in Beijing. Until businesses such as Mac and iPad.
18/09/2021 there are 43 Apple store in China (mainland),
in the Apple store there are staffs help you and introduce 4.1. Price Strategy
the products to the customer, and sometimes there will be
1 to 1 training. Those service are all free. The price for Apple is different from other phones
companies in China in consumer markets, because the
Apple can set a higher price, but because the influence of

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Apple products, brand effect, there are still people to buy profit margin of the products[8]. When Apple want to
the Apple, especially the price-insensitive Apple fans. release a new product, they will promote early, as a result
But in the enterprise market, most of phone can satisfy the consumer will cannot wait to buy the products.
the needs for the customer, so the price will be elastic, as Generally, Apple will only pre-sell products on its
a result the cheaper smartphones are more competitive, official website or on Tmall and Taobao, after the
for example, the iPad market, iPad sales have been products release, it will sell out in half an hour or shorter,
declining, because there are Apple’s investment in the if this happens, the fans will wait for two or more week
iPad is lower than that of other Apple products. As a to purchase the new products. Maybe in some directly
result, the iPad’s innovation is also small, and there are operated store, you can see the fans tent in front of the
more and more competitors in the tablet market. The door, or seat in front of the door at 00:00 o’clock waiting
impact of other brands such as Samsung, Microsoft and to buy new products, Apple is the only one company who
Huawei are increased. So, Apple should adopt a price can do this. Because the Apple are doing great by using
strategy that can expand its market share. the hunger marketing, other company are following
Apple, such as Xiaomi and Huawei. As we know the
In 2021, at Apple's autumn conference on September word of mouth is important to a company especially for
15th, the price of the iPhone 13 series was announced, those big company that sales commodities. There are now
which attracted many fans who watched the live a large number of Apple fans, and they are the most
broadcast to cheer. While the machine is upgraded in excited and favorite people whenever Apple launches a
terms of chip and camera, the price of the iPhone 12 is new product. Because Apple has such a group of fans,
also reduced by 300 yuan to 800 yuan. Apple has never lacked a good reputation, nor is it afraid
Generally speaking, the iPhone is a smart phone that no one will promote its products, so fans will make
product with a higher retention rate. According to the their friends buy Apple phones. Therefore, when new
Manmanmai report, the iPhone 12 model lost an average products are released, Apple is always the hot spot of
of 34.5% of its value in the six months after it went on public opinion and the focus of the media.
the market. Compared with the iPhone 11, which lost In the Apple Store, people can try the real phones and
43.8% of its value within half a year, the value retention other product, they can touch the product and use the
rate of the iPhone 12 is particularly prominent. However, product, people can try the AirPods, take a photo by
after the release of iPhone13, the price of iPhone12 was iPhone, draw the picture by iPad. Apple are always tried
cut by thousands of dollars at every turn. According to to satisfy the consumer. In the Apple store consumer can
the slowly selling price comparison platform, on the understand Apple’s product philosophy, there will be
evening of September 16, the prices of iPhone12 series one-to-one staff to take customers to understand and
products such as the iPhone12 Pro 128G version on compare the differences between different models.
JD.com and the Vipshop iPhone12 Pro Max 256G Because of the interior decoration and the service attitude
version showed "historical lows". Among them, the of the clerk, customers will be very satisfied with their
iPhone12 Pro 128G version of Jingdong Mall maintained feelings and experiences in Apple's direct-operated
the original price of 8,499 yuan from the release date to stores.
the end of February this year. Until the release of the
iPhone13, the product price was still fluctuating near the Use new product launches to create marketing
original price. But on September 16, the product price fell opportunities, Apple has two launch events every year. In
to 6,999 yuan. From early July to September 14, the 15th Sep 2021, Apple release iPhone 13, new iWatch and
iPhone 12 in Taobao’s Apple Store’s official flagship iPad[10]. All the release conference are global live
store started at 6299 yuan, but on September 15, the broadcast, before the launch events, every media will
lowest price on this page fell to 5199 yuan. speculate on new products, after the launch events the
news and medias are all report the new products, and on
4.2. Other Strategy Instagram, WeChat and Twitter are all have the post
about new products. Promotion is a classic marketing
Apple will give discount to the students, student can model, in 1st January 2017, Apple launches promotional
use their student id to get a lower price, so the students activities, if consumer purchase the MAC or the iPhone,
become one of the most important customer population they can get a new Beats Solo 3 for free, it’s the first time
for the Apple[9]. . that Apple company make this decision in China market.
In 2020 the Apple launched a back-to-school campaign
Hunger Marketing is the common strategy that Apple for the university student, if students buy a designated
used, "Hunger marketing", applied to the commercial product, they will be awarding a new AirPods and the
promotion of goods or services, refers to the fact that the teachers can also join the event. This is also Apple's
supplier of goods intends to lower the output in order to purpose to give back to its users.
control the relationship between supply and demand,
create a "false appearance" that exceeds supply, maintain
the image of the product and maintain a higher price and

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5. CONCLUSION Academy of Marketing Science, 47(3), 532–550.

https://doi.org/10.1007/s11747-018-0604-7
From above analyses it can be said that Apple's
marketing model can be said to be a model in the [9] Data from Apple. Retrieved 2021, from
industry, under Apple’s marketing model, not only its https://www.apple.com.cn/cn-
own profits have increased, but Apple has also attracted edu/shop/browse/open/salespolicies/edu
a large number of loyal customers through marketing. In [10] Apple events in September 2021. (n.d.). Apple
the future if Apple keeps using its own marketing model, (Mainland China)-Official website. Retrieved 2021,
it will always be a leader in the mobile phone market. But from https://www.apple.com.cn/apple-
there are also somethings that Apple could improve. 1, events/september-2021/
accelerate the speed of innovation, because nowadays
most of the phone producer, they can release new phones
in a short period of time. 2, They need increase the
investment on iPad, because there are more and more
company want to challenge Apple. Apple's marketing
model is worth learning from all electronic equipment
companies.

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