Huawei ban Apple effect

The aftermaths of the trade ban imposed by the US government on Huawei has started appearing. While the debate on the smartphone companies that could be benefited most due to the suspension of Huawei’s Android license by Google is on, smartphone users in China have started reacting to show their support to homegrown Huawei. And guess who is on the receiving end – Apple!

A number of loyal iPhone users in China are reportedly switching to Huawei in protest against the ban imposed by the US government. Apple iPhone users in China are finding it very embarrassing to pull out their phone in public at the time when homegrown smartphone manufacturer is facing heat worldwide, all due to the US – the home market of iPhone maker Apple.

“There is a calling from my heart that I need to show support for Chinese brands, especially in the trade war climate,” said Wang Zhixin, Manager at one of China’s largest solar module manufacturers, who switched to Huawei after showing love for iPhone for over a decade.

Wang is not the only one in China who is jumping off the ship after being a die heart fan of the iPhone for a very long time. There are many other highly satisfied iPhone users who glued with iPhone for over years but ditching Apple only to show their support to the Chinese brand.

However, there are many who don’t agree that their decision is influenced only from the ban on Huawei. Along with sympathy, there is value for money which is playing a role here.

“The company has a reputation for better quality at a cheaper price,” Wang said.

To make the condition worst for US-based Apple in China, many local companies have also started lobbying against the iPhone maker. After Google revoked Huawei’s Android license, which has practically put Huawei in a tough situation, many local companies in China have started offering Huawei Discount under employee benefits program to encourage their employees to switch.

So, what do all these mean for Apple? And how bad the situation could turn out to be for iPhone maker?

China is the biggest market for Apple outside the US. Apple garnered $51.49 billion in revenue from the Greater China market in fiscal 2018, which is nearly 20% of the company’s total revenue. Considering that the US market has already saturated and the sales of iPhone in the US is highly dependent on the upgrades – which has started showing sign of slowdown – China is making a significant contribution in the growth of the company for years.

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For the last four fiscal years, Apple’s dependency on China market is quite evident from the above graph.

On the other hand, India, the world’s fastest-growing smartphone market is still not ready for the exaggerative priced iPhone. The contribution of India to Apple’s overall revenue is still minimal and the declining sales of the iPhone in the country is only making the conditions worst for Apple. Hence, India can’t be positioned as an alternative to China – at least for now.

The on-going trade war between China and the US is pushing Apple towards a tough situation. The uproar by Chinese users against Apple is quite visible on social media platforms as well.

Comments like “Switch to Huawei! Hate those hypocrites” and “Support Huawei” are quite visible on WeChat.

Apple has 728 million iPhone users worldwide and of those 243 million iPhone users are in Mainland China alone. This is a staggering figure that Apple can’t turn a blind eye to.

Apple has made many strategic investments in China. Besides donating a sizeable amount for children welfare, Apple has made investments in many local companies including Didi Chuxing.

Along with that, there are 5 million jobs in China Apple has a direct influence on.

Despite all of that If the table turns due to the ongoing agitation against Apple in China, and even 20% of iPhone users in Mainland China decide to jump off the ship, it’s going to be disastrous for the company that is already struggling to keep the worldwide sales of iPhone intact.

At this point, the situation looks bad for Apple considering the deep influence Huawei has got on the market, users, startups and organisations in China. Only time will tell how many iPhone users in Mainland China get carried away with sentiments and how many stay unfazed with it.

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