In America, it's easy to get a feel for Apple's success. Just go to any public place and look around at all the iPhones.
China is a different story; there, Apple remains a luxury brand, not a mainstream powerhouse. And even as China becomes a bigger source of Apple revenues, it is still in many ways a country of unrealized potential and unique challenges.
As Apple embarks on its 2014 fiscal year, we take a look at the company's past successes and failures there, as well as what to expect in the future.
The story so far
Apple's performance in China is tricky to measure. Until 2013, Apple didn't distinguish its sales in Greater China—that is, mainland China, Taiwan, and Hong Kong—from the rest of the Asia Pacific region. Still, we can get a sense of how Apple has performed by piecing together the company's sales figures, public statements, and milestones over the past few years.
For Apple, the real action began in late 2009, when the iPhone 3GS officially went on sale through China Unicom, which, despite an impressive 140 million subscribers, is only the country's second-largest wireless carrier. This was the first real foot in the door for Apple: The iPod and the Mac had never been strong sellers in China, and previous iPhone models were only imported or sold on the gray market.
In those early days, the iPhone had a few challenges working against it: It was an expensive and hard-to-find product, and it was crippled due to local regulations that prohibited it from using Wi-Fi. Sales were slow at first; it took over a month for China Unicom to sell 100,000 iPhones—that's compared to the 1 million units sold across eight other countries on the iPhone 3GS's opening weekend alone.
But sales ramped up quickly as Apple added more distribution points in China for its new iPhone, along with a second Apple Store in Shanghai in July 2010. (Apple's first store, in Beijing, had opened two years earlier.) In Apple's first two quarters of the 2010 fiscal year, its revenue in China more than doubled, to $1.3 billion. And when the iPhone 4 went on sale in October 2010, Apple hit the 100,000 sales mark in China within just four days.
Around the same time as the iPhone 4 launch, Apple also began selling the iPad in China, and the tablet quickly became a strong seller. According to IDC, the iPad had cornered nearly two-thirds of the tablet market in China in the first half of 2011. (It helped that Apple had launched an online store in China, along with a Chinese version of the App Store, during the previous fall.)
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