Source: 9to5mac.com --- Tuesday, January 26, 2016
With all eyes on Apple’s earnings report due later today , there is concern that the company will report its first ever year-on-year drop in iPhone sales, with the difficult Chinese economy a significant factor. The WSJ has put together a couple of pieces outlining reasons why Apple’s future in China may be rosier than some anticipate. The pessimistic view is that most people in China can’t afford iPhones, and that the premium end of the market which can is close to saturation. Couple that to a slowing economy, the argument goes, and you’re not seeing much expansion in the wealthier population in the country. Tim Cook has for some time been seeking to reassure investors that Apple remains well-placed to succeed in China, and I’ve argued in the past that there is reason to believe him. The WSJ builds on these arguments … The WSJ notes that the urban upper middle class – Apple’s core market in China – remains forecast to rise from 36M households in 2012 to 193M by 2020. An iPhone is a key status symbol for this demographic, and even when people cannot afford major purchases like a new car, they still buy premium smartphones. Apple has also been broadening its retail reach in the country, the rapid expansion of Apple Stores mostly taking place outside the so-called Tier 1 cities where the company is already well-established. The move into smaller cities, said Joseph Foudy, an economics professor at New York University’s Stern School ...
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