Apple opens new store in China

This forms part of its expansion plans of 25 stores over the next two years.

The company launched its ‘Westlake’ store, so named because of a body of water which can be found in the center of the capital. The launch included a video explaining their work with a local calligrapher and a Tweet from the company’s chief executive, Tim Cook, stating that something new is starting in Hangzhou, China.

The company’s expansion plans in ‘tier two’ cities in China is continuing regardless of the reported deal which will give Beijing officials permission to do ‘security checks’ on all Apple’s products sold in China. This may result in allowing officials to gain access to Apple’s operating system course code. A recent visit by the chief internet regulator in China to the company’s California campus indicates the importance placation of the regulators could have for the future growth of the company.

The recent quarterly growth of Apple in China has been hampered by product launch delays, which were caused by regulatory problems, competition from Xiaomi and others, and a delay in the link with China Mobile. Apple has changed the method used to break down its income. For now, ‘retail’ is categorized separately to other regional sales from third-party and online sellers.

Company officials and analysts are projecting that China could become Apple’s largest growth market, particularly in view of the slowing down of US and European sales, due to a saturated market. It is expected that Apple will announce that it has sold more iPhones in China than in the US over the past year. This would be a historical first for the company.

China is experience fast growth in the mobile market, but it is not alone. Ericsson has predicted that global mobile subscriptions will increase from 6.8 billion during 2014, to 9.2 billion during 2019, with a huge portion of the growth being from India and China. It is stated that the top five countries were responsible for 50% of all net mobile additions during 2014s first quarter, with India as the leader showing figures of 28 million, and China in second place with 19 million.

The strategy used by Apple in India has remained confused thus far. They opted to sell an older iPhone version, which is quite incompatible with its newest operating system. This resulted in frustration for the wealthy globe-trotting Indian users it was targeting. The laws in India related to purchasing materials from domestic manufacturers have hampered the opening of an Apple store in India. The country’s low per-capita income implies that most of the population cannot afford an iPhone or is unlikely to be able to do so in the future.

However, this does not apply to China. Smartphone sales are starting to ebb, but users are able to upgrade to iPhones.