Apple Inc. (NASDAQ:AAPL) is having a rather difficult time in safeguarding its iPhone market in China. Recently, the Chinese government banned Apple iPhone 6 sales in Beijing following a patent dispute. And, if that was not enough to distress Apple, meet the clone of the upcoming iPhone 7. A company in China has developed a clone of yet to be launched iPhone 7, thus adding salt to the wounds of Apple.
The external design of the cloned phone is quite similar to the rumours that flooded over the internet speculating next iteration of iPhone. The phone features a dual camera design and redesigned antenna bands near its top and bottom edges. The cloned iPhone houses rose gold colour, Apple logo and similar to Apple’s diction its written ‘Designed by TAIWAN, Made in China’ at the back of the phone.
This is not the first time Chinese firms have cloned an expensive smartphone, they have also targeted many other devices including Samsung’s Flagship Galaxy S6 device. A company named No.1 has its own website where it sells Samsung Galaxy Note 3, Galaxy S5, iPad Mini etc. Another firm named GooPhone has cloned Samsung’s Edge devices and HTC’s One M8. OrientPhone and HDC are also copying and cloning a number of flagship smartphones.
Difficult Times for Apple in China
The Cupertino giant is already going through a tough time as the company recorded below-than-expectations revenue and iPhone sales in the first quarter of 2016. Apple is also facing geographical challenges as the smartphone market in the world is moving towards saturation. That was the prime reason why CEO of Apple, Tim Cook visited India recently and invested a hefty sum there.
Apart from the latest patent dispute in China, Apple Services were banned by the Chinese government earlier as well. Cook has adopted a rather diplomatic approach to recapturing Chinese market but his efforts haven’t been much fruitful till now. Apple also invested a huge $1 billion sum into a Private taxi firm of China, DiDi Chuxing in order to better understand the Chinese ecosystem, widely known as the walled garden.
But, this is not the only incidents in China. The fake Apple Store have been mushrooming in the country for the last few years. Despite Apple taking all necessary measures possible, there is no stopping to counterfeit Apple products that have flooded the market. While it’s not known what could be the revenue loss Apple incur due to such products availability, but it’s safe to assume it’s sizable considering China as the biggest market for iPhone.
The rumoured Apple iPhone 7
The next version of the iPhone may be similar to its predecessor iPhone 6S in terms of external design with redesigned antenna bands on its back. The battery backup of the next iPhone could end the woes of Apple iPhone users as iPhone 7 may give a longer battery backup. A 21-megapixel camera, waterproof device and omitting the headphone jack and Apple’s flagship Home button are other ground-breaking rumours from analysts and some leaks.
Despite all such upgrades, the initial market feelers are not quite positive; According to analysts, iPhone 7 may not reach a milestone in terms of sales. A major design change, like going back to all glass iPhone model and edgeless display similar to Samsung’s edge series is rumoured to be housed only in the 10th anniversary iPhone, i.e iPhone 8.
Contrary to analysts, Apple seems quite composed and confident about the upcoming iPhone 7. The company has put up a huge order to its suppliers, around 72-78 million units of iPhone 7. Thus, it’s quite difficult to predict the future of iPhone 7 as of now. According to IDC, 2016 may remain an average year in terms of iPhone shipments and has estimated 2% slump in iPhone sales in 2016.
The major problem for Apple is its pricing strategy. A dollar is quite stronger than other currencies in the world and adding import duties and other taxes makes Apple’s already expensive iPhone more costly in many of the iPhone markets. For example, in India, iPhone 6S 16 GB variant is tagged with Rs. 48,699 ($717) while the price of the same variant in the USA is nearly 30% lesser, $521.
And to make the situation worse for Apple, Android is slowly eating into Apple’s market. As budget smartphones are carving a niche in the smartphone market, apparently it’s time for Apple to reconsider its global pricing strategy.