Apple comes under pressure in China

06 July 2010

BEIJING: The iPhone, Apple's pioneering wireless handset, is facing increased competition in China as firms like Lenovo launch rival devices tailored for the needs of shoppers in the country.

Having established an exclusive tie-up with China Unicom last year to enter the Chinese market, Apple has expressed optimism about the iPhone's prospects.

By contrast, many analysts have suggested that high prices, the widespread availability of forgeries and the US multinational's comparatively limited distribution network are all barriers to success.

Apple hopes to be operating 25 branded retail outlets in China by the end of 2011, but critics warn this may be insufficient at a time when demand for technology products is surging.

Liu Chuanzhi, the founder of Lenovo, which retains a 30% share of the Chinese PC sector, said this business model would hamper Apple's performance in the short term at least.

In a bid to tap in to this opportunity, Lenovo has unveiled its own smartphone, the LePhone, which is designed specifically for the local audience.

"This is a very practical thing. The iPhone has more than 100,000 content providers, and we have no more than 1,000," Liu said.

"But our Chinese customers feel our applications are very convenient to use."

More broadly, Liu predicted China would eventually replace the US as a global trendsetter in the technology category.

This process will mean foreign companies will be forced to adapt their goods and services to meet the unique requirements of consumers in the world‘s most populous nation, he added.

Data sourced from Financial Times; additional content by Warc staff