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Tim Cook May Not Know Why, But Samsung Is Winning in China 327

An anonymous reader writes with this interesting snippet about the state of mobile tech in China: "Apple Chief Executive Tim Cook believes that 'over the arc of time' China is a huge opportunity for his pathbreaking company. But time looks to be on the side of rival Samsung Electronics, which has been around far longer and penetrated much deeper into the world's most populous country. Apple this week said its revenue in Greater China, which also includes Hong Kong and Taiwan, slumped 43 per cent to $4.65 billion from the previous quarter. That was also 14 per cent lower from the year-ago quarter. Sales were weighed down by a sharp drop in revenues from Hong Kong. "It's not totally clear why that occurred," Cook said on a conference call with analysts. Neither is it totally clear what Apple's strategy is to deal with Samsung – not to mention a host of smaller, nimbler Chinese challengers."
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Tim Cook May Not Know Why, But Samsung Is Winning in China

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  • by Spy Handler ( 822350 ) on Sunday July 28, 2013 @02:08AM (#44404343) Homepage Journal

    actually it is, Tim. The Chinese want cheaper phones, and they want phones you can put pirated warez on. Apple doesn't score well in either category.

    • actually it is, Tim. The Chinese want cheaper phones

      Ironically so do Americans it is why Apple are increasingly selling more old products like the 4 and 4S. They also don't want cheaper phones..they may want better value phones. The iphone is a cheap phone its why Apple charge a large mark-up.

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        Even if they offered a cheaper iPhone, they still wouldn't be able to install pirated software on it. It's beyond second nature's almost a pathological need to install unlicensed software. We have an off-shore team in China and we realized that they were using pirated versions of Windows, Office and a whole host of other very reasonably-priced applications, most of which we had enterprise-wide licenses for. We asked them to go through our IT department to get legitimate versions and they agreed.

        • Even if they offered a cheaper iPhone, they still wouldn't be able to install pirated software on it.

          Seriously [] this is my favourite post of a Developer attacking its customer by hijacking Twitter accounts, and posting false “confessions” of piracy.

          They simply do not want the iPhone, and piracy is not the reason. Although not being in control of your hardware will definitely have an effect in every market.

        • it's almost a pathological need

          No, it's not. It's normal maket behavior. There's nothing pathological about that.

        • by Clsid ( 564627 )

          I tried to get a Windows license for a machine I custom built here in China, and boy, they kind of looked at me like I was speaking klingon or something. I did find a store eventually that sells legal copies but it was like finding a specialty craft store in a large mall.

          The guys I got the computer from used a pen drive with Norton Ghost to clone a whole lot of stuff to the new machine, from QQ (think MSN Messenger) to Windows and Office.

    • by FRiC ( 416091 )

      It's easier than you think you put warez on iOS devices. Just go to any shop and pay like 10 bucks, and the shop will login using their App Store account, and you can then download anything you want, and these shops advertise openly that they don't sell warez and everything is "genuine". The shops don't give out their passwords, so you just go back once in a while and let them update the apps, for free.

    • by DigiShaman ( 671371 ) on Sunday July 28, 2013 @03:24AM (#44404665) Homepage

      Apple already tapped out the Chinese market that was in it for the social image and prestige. Besides, the Chinese iOS store sucks. Badly! Try it some time, it's not a pretty site to see just how limited the market options are and poor quality of apps.

      As for Samsung, they're lucky to have lasted this long. ZTE will mop the floor with both Apple and Samsung, combined. ZTE will be for China what LG is for S. Korea.

      • by Clsid ( 564627 )

        Nah man, maybe Xiaomi or Huawei, but ZTE is not well regarded among my Chinese friends, which are tech-saavy. But what the Chinese really crave right now, it's not even Samsung, it's actually the Sony Xperia Z. Lenovo is also doing pretty good, and after having an 820, I have to say they are pretty good phones. I have had ZTEs, Huaweis and Lenovos, and from all the Chinese brands I would buy today, I would choose either Xiaomi, Huawei or Lenovo.

  • It's price to some extent. However the fact that Samsung has had a larger presence in China for longer is pretty critical. Tim Cook doesn't seem very smart.
  • What somewhat surprises me is that Samsung's phones would be holding out against the torrent of slightly-to-substantially cheaper indigenous handsets in China. Sure, the quality can be somewhere between 'uneven' and 'totally fucking dire'; but Samsung's phones are also well known for being plasticky and horribly skinned, so they aren't competing that aggressively on quality.

    Am I being too harsh on Samsung? Are the local offerings Just That Dreadful?

    • Maybe a little harsh... FTFA

      Samsung launched a China-only luxury smartphone together with China Telecom marketed by actor Jackie Chan that retails for about 12,000 yuan ($2,000). The flip phone, named âoeheart to the world,â is encased in a slim black and rose gold metal body. The sleek look â" called âoeda qiâ (elegantly grand) â" is coveted by Chinese when they shop for cars, sofas or phones.

    • Re:My question... (Score:5, Insightful)

      by obarthelemy ( 160321 ) on Sunday July 28, 2013 @03:19AM (#44404647)
      You're mixing up "casing shininess" and "quality". I have a $200 cheap Chinese phone and a $600 (at the time) Galaxy Note (v1), and there's no doubt which is higher quality. The Samsung has a much better screen, camera, sound, buttons, touch reactivity and precision, extra apps. Both are wrapped in plastic though. Both do the job, though.
    • > What somewhat surprises me is that Samsung's phones would be holding out
      > against the torrent of slightly-to-substantially cheaper indigenous handsets in China.
      > Sure, the quality can be somewhere between 'uneven' and 'totally fucking dire';

      Thanks to short-sighted MBAs who've off-shored manufacturing to Asia, "quality American products" are manufactured at the same factories, by the same workers, that manufacture "cheap foreign junk". Check out Foxconn [] on Goog

    • by Clsid ( 564627 )

      They might look kind of the same, but the Chinese are wary of locally manufactured products since they rather trust a foreign brand with the good quality controls than a local one that who knows what will happen. This is all over the spectrum here in China, from baby formula to beef and whatnot.

  • Live in HK (Score:2, Interesting)

    by Anonymous Coward

    I live in HK and can pretty much afford any phone. I use Android base phone. More freedom, more options and customisation features and plenty of Android devices to chose from. Most HK people are smart enough to use Android. Hence, Android phones win over here.

  • by fullback ( 968784 ) on Sunday July 28, 2013 @02:16AM (#44404387)

    There's a shift in China. Some foreign goods/brands remain as status symbols, but some are losing their luster.

    The U.S. has been acting like a bigger dick than usual lately. Chinese consumers would rather not buy American (or Japanese) brands when there's a choice. It doesn't matter that the dick's product are made in China.

    That's not my opinion, so don't get mad at me. That's what I was told when I was there last month.

    • by Clsid ( 564627 )

      I agree with you with the Japanese part, but even if the Chinese hate the Japanese, they still buy a whole lot of their stuff, especially all kinds of food products and restaurants. As for them boycotting American products, I haven't seen that even once, maybe Apple at some point when they realized they were not getting the same treatment as other nations, but that is as far as it goes. And while this is my opinion, I have been living here for quite a while now and have a lot of tech-saavy Chinese friends.

  • Their "strategy" has been to position themselves as a high-end boutique brand. China (and most of the world) wants a solid affordably-priced workhorse. And in Asia Samsung almost certainly has a higher brand recognition than Apple just because they're relatively local (Korean vs. North American) and have been around a lot longer. To win, Apple would need to stop being Apple.

    • I don't know if I'd say "boutique".

      Apple prides itself on its engineering, and "deceptive simplicity". The "it just works" strategy is behind most all of their products. And in many ways, that is a really great thing. And if you have a Mac at home and an iPhone or iPad, everything "just works together", too.

      But sadly, they've seen fit to combine the "just works" philosophy with a good bit of corporate lock-in, which does nobody any good but Apple, and probably not even Apple in the long term. It is ea
      • Indeed. And there's a big difference between being locked in to an ecosystem with a single vendor, expensive on top of that (iPhones for the whole family, at $600 a pop, then $1k+ Macs and MacBooks, $300 iPods, $400+ iPads), versus a multivendor ecosystem where I can get a $600 GS4 or HTC One, but also $200 phones for the kids, $100-200 tablets, $50 Android desktops... Sure, the quality of the cheap stuff is not the same, but the big difference is between having the stuff or not having it; how good the stu
        • "... how good the stuff is comes a very distant second..."

          See, that statement needs a qualifier. Apple products are indeed well-engineered, but your typical everyday user may not appreciate that as much as, say a "developer". (Developer in quotes because these days it's a "politically correct" euphemism for programmer. I know, because I am one.)

          For a developer, an Apple machine is close to the best of all worlds. You get a very nice hardware platform, and the freedom to run everybody else's OS in a VM too. No other OS has as much flexibility in that particular

          • by RCL ( 891376 )
            I agree with that statement, but Macs come with a pretty hefty pricetag. In the country I currently reside (Poland) a Mac that can do all the aforementioned things costs you more than a typical monthly developer salary (which is averaging a bit below $2k/month). For the same price, you can get a monster PC here.

            What iOS developers normally do here is getting used hardware (particularly Mac minis) for development while keeping PCs as their main machines. I have seen people who could afford (in my opinion)
          • You're right, Apple products are very good for some specific uses. But Apple need broad markets to maintain their growth and profits, I doubt all Devs + all Musicians + half of all Graphics/Video Artists would be enough. For Joe Publics like me, buying Apple means getting luxury products at luxury prices, and getting locked into a system where there are *only* luxury products at luxury prices, even the apps and accessories/peripherals are more expensive. Add to that a few irritating drawbacks (I put the bi
      • by narcc ( 412956 )

        Apple prides itself on its engineering, and "deceptive simplicity". The "it just works" strategy is behind most all of their products. And in many ways, that is a really great thing. And if you have a Mac at home and an iPhone or iPad, everything "just works together", too.

        Not quite. Apple's strategy is to create the myth of "deceptive simplicity" and "it just works". As any honest iPhone user will tell you, neither of those things are true.

        (Just an example: Putting music on an iPhone can only be described as frustrating; particularly if you're using a computer that is not your own. On an Android or BlackBerry phone, you simply copy it over like it's a flash drive. No hassle, no "syncing", and no clunky software required. It just works.)

        It's a bit like the old myth "Macs

        • "Just an example: Putting music on an iPhone can only be described as frustrating; particularly if you're using a computer that is not your own. On an Android or BlackBerry phone, you simply copy it over like it's a flash drive. No hassle, no "syncing", and no clunky software required. It just works."

          Myth yourself. Yes, when it comes to iTunes, I agree with you. But that falls under the "corporate lock-in" category I already described; it isn't true of the products in general. (FYI, I very seldom use iTunes myself. Apple tried to stuff way too much into one program and as a result fucked up most of it. I use iTunes to play music, PERIOD. And it's not even my default program for doing most of that.) But my point is: that's a software issue, not hardware, and it's one of those Apple glitches, not the rule

        • by Clsid ( 564627 ) on Sunday July 28, 2013 @08:10AM (#44405391)

          Well if you are in China, you just fire up QQ Music and have all the music you want. If you are in the US you can use Spotify, or you can buy stuff from the iTunes store which I don't see as truly hard. Now if you want to pirate music and upload it to your device, you just copy that in iTunes and then sync, or where are you getting that flash drive music if it isn't from torrents or a physical CD?

          So really, drop the crap. Apple is overpriced and they like to lock you in, but saying that it is not simple to use is a flat out lie.

        • by Bongo ( 13261 )

          You can make some things simpler at the expence of others. Like sandboxing on OS X, it makes some security issues simpler for the user, but it is also harder for other things to work, such as key macro apps.

          The design decisions about how to get the balance right are not easy, also because you are setting a precedent which may work out ok down the line. So if apps no longer can rely on the user being able to do stuff via the filesystem, then app developers can focus on creating other, hopefully better ways o

  • Make as good a product as they can, and let profit follow.

    Marketshare is not a concern to Apple.

    Also, unless you have shut yourself off from the internet, you cannot help but see ENDLESS waves of rumors about some kind of cheaper Apple phone on the way, which would pretty obviously be another strategy to get more customers in China.

    It's funny how everyone frames it as a battle against Samsung, when over time Samsung is but one of many players in China that influence how Apple sells products.

    • "It's funny how everyone frames it as a battle against Samsung, when over time Samsung is but one of many players in China that influence how Apple sells products."

      Not entirely, because Apple and Samsung have had an on-again, off-again, love-hate relationship.

      The reason is that Apple has often contracted with Samsung for critical components of Apple products. However, they often compete with one another on finished products. That makes for strange bedfellows.

    • Make as good a product as they can, and let profit follow.

      Ironically Samsung now make more profits while Apples continue to shrink. The bottom line is the product is not that good. the iPhone5 has a 1.3 GHz dual core, 1GB of Memory, an 8MP and 1.2MP Camera, 640 × 1,136 pixels at 326 ppi. That compares badly to even mid-range phones let alone manufacturers flagship product. They need a new strategy, not marketing lingo.

    • Make as good a product as they can, and let profit follow.

      Marketshare is not a concern to Apple.

      Apple tried this before, and it nearly destroyed them. When market share is not a concern, it soon plummets to 0%.

  • If you got into an Apple store, its rows of the same generation of products. If you have not bought into the cult or are on the upgrade cycle, its a hard sell to convert a new user at the price point with the same old OS/look/feel/range.
    Samsung has products ranging from:
    low cost glossy colour clamshell phones with the basic functionality a user needs at the local price point.
    mid range tablet like products
    larger size tablets
    Buying Samsung feels good at any price and has a new feel about it.
    Now you als
    • "Buying Samsung feels good at any price and has a new feel about it."

      Definitely a matter of opinion. As another /.er has pointed out, to many people Samsung products have a "plasticky, cheap" feel to them.

      Case in point: I recently bought a used Samsung air conditioner. (I didn't buy it because it was Samsung; I bought it because somebody was selling a used air conditioner.) The basic mechanical (i.e., compressor, heat exchangers, etc.) are fine. But the fit and finish sucks. The whole faceplate with the air vanes etc. was cheaply made, and the internal plastic parts it mo

  • by Anonymous Coward on Sunday July 28, 2013 @02:39AM (#44404481)

    There are two reasons why people I know (myself included) have not bought Apple products.

    1. Give us a bigger screen. My wife loves her iPhone and is looking at upgrading to whatever comes next, but after using my Galaxy S3 she would rather lose her familiarity with iOS (and all the apps she has paid for) to get a screen she can actually read.

    2. Don't charge the $200 Apple premium. After being dicked around by Telcos, more and more people are buying their phones outright. It's not until you do this, that you suddenly see that an Apple iPhone is over $200 more expensive for a product (like the Galaxy S4, or the HTC One) which is better specced, but far cheaper.

    People buying outright is also the same reason people aren't upgrading as much any more. You used to get a new phone every 2 years for free on some contracts, but with the premium commonly being charged people are happy to hold on for three/four years - or until their phone goes bang.

    Not putting iOS 7 onto 3GS models is a smart move - it stops all those laggards from upgrading their OS, and forces them to start upgrading their hardware.

    • by Pecisk ( 688001 )

      1. But that's how it works. We love our old models, but...they just lose out to competition. That's how it works;
      2. Charging 200$ is all they got, hell, they cost much more in fact in US. That's their *business* model;
      3. Exactly - as soon as you get out of upgrading cycle via contracts, iPhone just doesn't cut it anymore.

      Not really - most of current 3GS users are people who don't care about newest iOS.

  • Emmmm....let me try....I can only guess, but...because your business model has no absolutely chance of winning in China? :)

    Ohhh, you afraid to said that loud. Ok, I will try again...BECAUSE YOUR BUSINESS MODEL HAS NO NO WAY TO WIN IN CHINA. How about that? :)

  • by tuppe666 ( 904118 ) on Sunday July 28, 2013 @03:09AM (#44404617)

    ...ok not America :)...but that is the point. Apples market share is the lowest in years sitting at 13% [] To focus on a market(admittedly a massive market) they always did bad is ridiculous. Russia's three major mobile phone operators have halted iPhone sales recently.

  • by XiaoMing ( 1574363 ) on Sunday July 28, 2013 @03:26AM (#44404669)

    The irony is, Samsung phones aren't marketed as "special" as iPhones, and that's why the Samsung phones are winning.

    To elaborate:
    Any relatively affluent Chinese national who's had the privilege of making a trip to the states and is returning to the motherland will most likely have a top-of-the-line Samsonite suitcase full of Coach purses and brand new unlocked apple iPhone 5's (and maybe a couple of iPads), but how many Samsung products will they be bringing? Likely none.

    The reason for this is that when quality is an issue, the Chinese have this adamant belief that anything created in China that is exported to be sold to Americans is, without question, of higher quality than the same item were it sold to Chinese consumers. This includes the same iPhone, made in the same factory, by the same people, the "better" one being shipped overseas.

    That's why in the mainland, the spoiled middle-class children (starting at around middle school) with re-imported U.S. iPhones will actually look down on those who are using a "domestic" iPhone.

    The fact that Samsung has been a major player in Chinese appliances still helps to set it apart from domestic (to China) brands such as Huawei in terms of overall quality, but because Samsung phones are marketed as largely being a different alternative to Apple phones (in terms of features, screen size, etc.), there's less of a need to re-import that je ne sais quoi from the U.S.

    But Apple? Those phones are claiming to be the epitome of fit-and-finish, and that's just shooting themselves in the foot in this case.

  • Its not just the price - Samsung understands the Asian market and makes the product that the market wants, Apple simply doesn't.

  • by kimvette ( 919543 ) on Sunday July 28, 2013 @03:29AM (#44404677) Homepage Journal

    I have a Chinese (LAVA-branded) Android tablet - it was a freebie from a vendor because I order so much from him (several years we were their largest account). He asked me for feedback on it after I had it for a few weeks. I felt bad but had not much good to say about it. It came with the Netflix preloaded (in their official firmware) and the Netflix app would not load movies. No update was available from Netflix at the time so I contacted lavatech. Their response was that they do not support it, that I should delete the app. WTF? Also, the manual clearly stated that the tablet charges via the mini-USB port. It doesn't. It only charges via the DC adapter port, and it uses a near impossible-to-find-size barrel connector.Lava Tech is uninterested in supporting their core products. Their response if something doesn't work according to their documentation, is to simply not use that feature, or they insist I'm doing it wrong (how can you plug in a mini-USB cable incorrectly?!).

    I have a GS1000 dashcam (orange menu, a genuine GS1000 not a clone) - another cheap Chinese product. It has all the features I wanted but I ran into a bug. They quickly turned around and gave me a firmware update that fixed the problem I reported but introduced another problem. I emailed them again and they sent me another update (which I still have yet to test because I have been in the middle of moving to New Hampshire). Excellent customer service for a cheap product.

    Support from Chinese companies ranges from completely sucktastic to fantastic. Unfortunately the former is far more common. I think the way Samsung and Apple actually stand behind their products, both will take the Chinese market by storm. I wouldn't buy a smartphone from a Chinese company because there is too much risk that the most basic features won't work (like, not being able to make phone calls) and the company will just say "don't use that feature then."

  • by Matias ( 172967 ) on Sunday July 28, 2013 @03:30AM (#44404681) Homepage

    Almost everyone I asked said that the iPhone screen was too small.

    They also said⦠"Why is the iPhone so expensive when it has such a small screen?"

    You can buy an Android phone with a gorgeous 5.7" display for half the cost of the iPhone in China. That was the biggest screen I found and it looked more vibrant than the screen on my iPhone 5.

    If Apple wants to keep selling phones in China, they need bigger screens. Therefore, you can expect there will be a big screen iPhone. The Chinese market is too big for them to ignore. There's lots of competition now and Chinese consumers have zero brand loyalty.

    • by waferbuster ( 580266 ) on Sunday July 28, 2013 @04:46AM (#44404873)

      I have to agree with this... When my girlfriend broke her iPhone 4, she tried to decide which phone to get. Basically, it came down to the iPhone 5 (with it's tiny screen) or the Samsung Galaxy Note 2 (with it's ginormous screen). She ended up with the Note and was happy, especially after all her friends were jealous. After all, creating envy in friends is one of the prime purposes of a premium phone!

    • Some people like smaller phones, some like larger ones. I understand that too much choice can get confusing to people, but most people want SOME choice. Apple has had a "You will do this our way," idea for a long time. Now that works when what you have is what people want, but not so much if people decide they want something else.

      Also in terms of China, Apple is at a disadvantage compared to America because it doesn't have the status symbol thing going on there. In the US it is very fashionable to have and

  • I've lived in China for the past nine years, and while I'm no expert, I can maybe shed a little light on the actual situation here. While most affluent Chinese own iProducts, and in particular have a bias iPhones, that's not where the market is going. Apple products are more expensive, and Apple has always had supply chain issues in China; most people prefer to buy from a vendor who goes through Hong Kong since you avoid taxes that way. I think the bigger issue is being locked in to Apple's systems. Look
  • Here's a big hint for Tim: on iOS, you can't write a custom keyboard. On Android you can. This is a really big deal in Hong Kong, because iOS has no support for Cantonese-based Chinese input. The best you can do is a kludgy app where you have to copy and paste the result (see []).

    Therefore, the Cantonese user is hamstrung by Apple's lack of support for the Cantonese-speaking market, together with their locked-down approach which prevent

    • by Anubis IV ( 1279820 ) on Sunday July 28, 2013 @09:55AM (#44405839)

      Not only does iOS have voice control and dictation in Cantonese [], but Siri even speaks Cantonese []. There's also the fact that iOS supports the traditional Chinese character set, which is used by Cantonese, as well as the extra characters that are specific to Cantonese. Did it ever occur to you to ask why that app you linked hasn't been updated for three years now? If you look back, you'll find that that Apple expanded its iOS efforts to include China around that time, along with adding input support for various forms of Chinese in iOS 4.

      But hey, dinging them using information that hasn't been true for about three years is a favorite pastime of many a nerd, so please, continue.

  • Apple managed to sell some stuff in China despite not having support for the languages and no effort in distribution. Meanwhile Samsung, and even Nokia in it's death throes, have made some effort at selling things in China, and guess what, they are doing better than Apple in that market. It's not hard to work out why.
  • In my experience iphones sold extremely well where they had the iPod bonus (that is, a non-negligible fraction of the population being on itunes).

    In china Apple never managed tyo catch the same stronghold.

    May also have to do with Apple fucking up on simple things in non-trivial (i.e. chinese) 2.5g network situations (when i traveled to China with my wife, her iphone3gs choked up on the chinese variant of GSM extension in a way that calls were impossible (neither my Nokia phones nor my galazy tab had that pr

    • by Clsid ( 564627 )

      China Unicom had phones with zero issues for a long time now. China Mobile might be the issue but that's more a problem of not knowing the local market more than the phone manufacturer itself. iPhones sold well here but nowadays people don't see the value of the iPhone 5 since they consider the 4/4S good enough still. But hop into any metro and count how many Apple devices you see. Nowadays you get to see more Android phones, but like a year ago it was crazy, I even saw people with two iPhones.

Can anyone remember when the times were not hard, and money not scarce?